In 1941, Pakistan Steel Industry was established under the Companies Ordinance of 1929 and was inaugurated on May 31, 1949, by the then Governor-General of Pakistan, Muhammad Ali Jinnah. The first blast furnace went online in 1954 and the first steel was rolled out in 1955 in Karachi, Sindh Province, Pakistan. By the late 1970s, it had started producing at full capacity of 1 million tons per year.

When talking about the Pakistan Steel Industry, we cannot avoid talking about the historical background of this industry. This industry in Pakistan was established in 1998 and it has been playing an important role in contributing to the national economy by generating an annual revenue of over $5 billion; this contributes to around 3% of the gross domestic product of Pakistan. Also, there are approximately 25,000 direct employees and 150,000 indirect employees who are working in this industry; this contributes to around 0.6% and 2% respectively of the total national labor force of Pakistan which currently stands at 90 million people.

Introduction

The steel industry has been booming in Pakistan over the last two decades. The first steel mill was opened in Karachi back in 1954 and there are now a total of 12 mills in the country, with a combined capacity of 4.5 million tonnes per annum. When the Pakistani steel industry was first established it had to import its raw materials from abroad, but this changed in 1976 when Pakistani entrepreneurs were able to set up their own iron ore mines. In 2007, Pakistan had become self-sufficient in terms of raw material supply for its steel mills and had even started exporting iron ore to other countries. With a GDP growth rate of 5% over the last decade and an annual increase of 1% since 2002, one can see why so many people have been investing heavily in this sector.

The early years

It is a fact that the production of steel in Pakistan has been in existence since 1954 and is considered to be one of the oldest industries in Pakistan. The first steel mill was established near Karachi under the name of Karachi Electric Supply Corporation (KESC) and it was designed with an output capacity of 2,000 tonnes per day. Over the years, there have been many other steel mills established in different parts of the country but this is not what we are interested in. We want to focus on how the industry has changed over time and how it looks today.

The 1980s

In the 1980s, there was a large number of production facilities that were commissioned for the steel industry. This helped to increase the national steel production capacity from 4.7 million tonnes to 12 million tonnes. Unfortunately, this also caused an over-dependence on imported ore and coal, which increased the import bill by $2 billion per year. This is one of many reasons why Pakistan’s economy struggled in the late 1980s.

The new millennium

Until the last decade of the 20th century, steel plants in Pakistan were mostly small-scale production facilities. In 2000, the government privatized ownership and management of these plants to encourage investments in the sector. Today, there are seven steel mills operating in Pakistan with a total capacity of 11 million tons per year.

1 – Javedan Group (1.6 million tons) #2 – Rashid Latif Industries (0.5 million tons) #3 – Siddiqsons Tin Plate Company Limited (0.4 million tons) #4 – Mehran Steel Mills (0.5 million tons) #5 – DMC Limited (0.5 million tons)

Conclusion

The Pakistani steel industry has its roots in the colonial era. The British government established a steel mill in Karachi, which they hoped would help build infrastructure and improve the health of city dwellers. The facility operated for less than a decade before it was shut down because of the economic recession.

The next major development in the industry came with Pakistan’s independence when construction began on a modern steel mill at Ravi near Lahore. After an opening ceremony attended by then-Prime Minister Liaquat Ali Khan and Queen Elizabeth II, the plant began producing steel. It wasn’t long before tensions between India and Pakistan led to war, however; production halted as workers left to defend their country from Indian aggression in Kashmir.