KARACHI: Agha Steel Industries has agreed to sell 100,000 metric tons of low-carbon billets worth approximately Rs10.5 billion per annum to Horizon Steel, the company said on Monday.
The two companies have signed a memorandum of understanding, according to a statement. Agha Steel will supply the intermediate steel product that the downstream steel industry uses as raw material.
“Thanks to product innovation and heavy investments in research and development, Agha Steel is able to manufacture for the first time in Pakistan refined low-carbon quality billets that are used in the wire rod industry,” said Suleman Lakhani, chief marketing officer of Agha Steel. “Until now, the downstream industry heavily relied on expensive imported raw material. That’s going to result in huge import substitution and big benefit for our national kitty.”
The company uses the latest European electric arc furnace technology supplied to produce billets, a transitional steel product that can either be turned into steel bars used in construction or transformed into wire rods to manufacture many high value engineering products.
“With the realization of this MoU, Agha Steel’s sales are going to grow by 68 percent from the current level within a year,” said Lakhani. “We foresee many such contracts with companies operating in the downstream industry. The availability of good quality raw materials is going to enlarge this industry to its true potential.”
Agha Steel has invested in a high-efficiency and environment-friendly electric arc furnace. It recently increased its billet-making capacity from 250,000 tons to 450,000 tons a year. Horizon Steel CEO Shoaib Sultan said it was encouraging to witness that steel products can now be made end-to-end within Pakistan. “I expect the downstream industry will see tremendous growth in coming years and the future looks very bright,” he said.