Karachi, September 28, 2020: Agha Steel Industries is going to sell 100,000 metric tons of low-carbon billets worth approximately Rs 10 billion per annum to Horizon Steel.
The two companies have signed a memorandum of understanding (MoU) that ensures Agha Steel will reliably supply the intermediate steel product that the downstream steel industry uses as raw material.
“Thanks to product innovation and heavy investments in R&D, Agha Steel is able to manufacture for the first time in Pakistan low-carbon billets that are used in the wire rod industry. Until now, the downstream industry mostly imported its raw material. That’s going to result in huge import substitution,” said Suleman Lakhani, chief marketing officer of Agha Steel.
The company uses the latest European electric arc furnace technology 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 electrical appliances.
“With the realization of this MoU, Agha Steel’s sales are going to grow by 68 per cent from the current level within a year. We foresee many such contracts with companies operating in the downstream industry,” added the CMO of Agha Steel, which is going public next month to finance its expansion drive.
Unlike most local steel-makers that use the traditional induction furnace for melting scrap, Agha Steel has invested in a high-efficiency and environment-friendly electric arc furnace. It recently increased its billet-making capacity from 250,000 MT to 450,000 MT a year. Speaking on the occasion, 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,” he said.