Pak-China joint venture in Steel sector set to restart production

A joint venture firm in Pakistan’s steel sector is prepared to resume production after overcoming initial difficulties. Alhaj Steel is the largest private sector joint venture in the steel industry and the ownership is shared between HEBEI Xingang Iron and Steel Group of China and Alhaj Group of Pakistan.

The joint venture has set up a high-quality 60-grade steel manufacturing unit at Gadoon Industrial Estate in Swabi district of Khyber Pakhtunkhwa province with an installed capacity of 1,500 tons per day or 0.5 million tons per year. Alhaj Steel started commercial operations in late 2020 and suspended production after a few months in early 2021. “We faced hurdles due to specific dynamics of Pakistani market and the economic uncertainty, triggered by Covid-19 pandemic, forced us to shut down the plant,” said Alhaj Asia Star Steel Company Deputy Chairman Zubair Khan.

“However, we are all set now with a renewed marketing strategy and our Chinese partner is determined to resume production soon.” The joint venture aims to enhance the capacity to 2 million tons per annum in the second phase to become the largest steel manufacturer in Pakistan after the state-run Pakistan Steel Mills, which is non-operational at present. Alhaj Steel has employed over 500 Pakistani and Chinese workers and it is known for giving a big boost to the Gadoon Industrial Estate.

A senior official of the Gadoon Industrial Estate, on the condition of anonymity, said that Alhaj Steel had to cease operations due to volatility in rupee value. While citing his conversation with the management of Alhaj Steel, he added that the firm had finalised its arrangements for restarting steel production, procurement of raw material and calling staff back to work.

Khan said that the Gadoon Industrial Estate could attract more Chinese investors if linked with the M-1 Motorway and Swat Expressway. The government of KhyberPakhtunkhwa has started paperwork for linking the M-1 Motorway which will further boost the zone, he said. The zone is spread over an area of 1,116 acres and has all necessary facilities for industrialisation, according to Khyber-Pakhtunkhwa Economic Zones Development and Management Company.