Government of Pakistan
Privatization Commission

PC RECEIVES TWELVE SOQs FOR PRIVATISATION OF
PAKISTAN STEEL MILLS CORPORATION (PSMC)

Islamabad, November 01, 2005

The Privatisation Commission (PC) has received Twelve (12) Statements of Qualifications (SOQs) from potential investors for the privatisation of Pakistan Steel Mills Corporation (PSMC). Earlier Nineteen (19) parties had submitted Expression of Interest (EOI) in response to the invitation to qualified strategic Investors interested for acquiring 51-74% equity stake in Pakistan Steel Mills Corporation (Pvt.) Ltd. ("PSMC" or the "Company"), together with management control, on an 'as is, where is' basis. A consortium led by Citigroup Global Markets Limited is advising the PC on the sale

Statements of Qualifications (SOQs) documents were issued to all the parties who had submitted EOIs. However, SOQs from Twelve (12) parties have been received. The parties submitting SOQ include 1.Al-Tuwairqi Group Of Companies, Kingdom of Saudi Arabia, with Arif Habib Group of Companies, Pakistan, 2.Magnitogorsk Iron & Steel Works, Russia, 3.Noor Financial Investment Company, Kuwait, 4.Shanghai BaoSteel Group Corporation, China, 5.Investment & Development Office of Government of Ras Al Khaimah, United Arab Emirates, 6.International Mineral Resources, Switzerland, 7.Aljomaih Holding Company, Kingdom of Saudi Arabia 8.International Industries Ltd, Karachi, 9.Hassan Associates (Pvt) Ltd, Karachi, with Med-europe Commodities International s.a.l, 10.Privilege Developers (Pvt) Ltd with SEKYRA a.s, Czechoslovakia, 11.Aqeel Karim Dhedhi Securities (Pvt) Ltd, Karachi, and  12.Nishat Mills Limited, Lahore.

PSMC is the country's largest and only integrated steel manufacturing plant, with an annual designed production capacity of 1.1 million tonnes. It was incorporated as a private limited company in 1968 and commenced full-scale commercial operations in 1984. PSMC complex includes coke oven batteries, a sintering plant, blast furnaces, steel converters, bloom and slab casters, billet mill, hot and cold rolling mills, galvanizing unit and 165MW of own power generation units, supported by various other ancillary units.  It is located 30km south east of the coastal city of Karachi, in close proximity to Port Bin Qasim, with access to a dedicated jetty, which facilitates import of raw materials. PSMC manufactures a wide mix of products, which includes both flat and long products. PSMC effectively enjoys a captive domestic market due to the prevalent demand-supply imbalance in the country's steel industry, where demand has historically exceeded local supply.

At the back of sustained improvements in Pakistan's macroeconomic environment, the demand for steel in the country is expected to grow further. PSMC is uniquely positioned to take advantage of the expected demand growth as adequate infrastructure is already in place to cater to capacity expansion. PSMC also strives to maintain high quality and environmental standards and in this regard has received ISO 9001, ISO 1400-1 and SA 8000 certifications, along with the Environmental Excellence Award 2005.

The process of pre-qualification has already been commenced. The privatisation process is proceeding on fast track basis as per directive of the Prime Minister.

Source: http://www.privatisation.gov.pk/Handout/HO-AR-05/Nov-05/Handout%20November%202005.htm