ISL plans to raise Rs 3.0b through public offering

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KARACHI – International Steels Limited (ISL) plans to raise around Rs 3.0 billion rupees through public offering. This was stated by the Managing Director Towfiq Habib Chinoy at ISL’s inauguration ceremony, held on Friday. Earlier, the Rs. 8.7 billion steel mill was inaugurated by Almas Chinoy, wife of the late Amir Chinoy – founder of the International Industries. The inauguration ceremony was also attended by Sumitomo Corporation Senior Managing Director Kazuhisa Togashi, JFE Steel Japan Executive Assistant and General Manager Takashi Okabe, Senior Specialist at SMS-Siemag Kluas Grimm and representatives from the International Finance Corporation (IFC).
International Finance Corporation and Sumitomo Corporation of Japan have already invested in ISL, underlining the strategic importance of ISL in the steel industry. In addition, ISL will benefit from Sumitomo’s participation by getting expertise in the areas of maintaining highest quality standards, cost management, inventory procurement and resource management. International Industries Limited (IIL), sponsor of ISL, is a premium producer of steel tubing and galvanised pipes in the country. Pakistan Cables is part of the group that is a prominent manufacturer of cables and wires.
ISL is the most recent addition to the family and has been established to engage in the business of manufacturing Cold Rolled Coils (CRC) and Hot Dipped Galvanised Coils (HDGC). The facility spread over an area of 32 acres in Landhi, Karachi is equipped with state-of-the-art technology to manufacture CRC and HDGC. The Company has achieved commercial operations in January 2011. ISL is the largest private investment in the value-added flat-rolled and coated steel industry in Pakistan. The project will unlock the dormant potential for developing the country’s engineering and hi-tech manufacturing industries. This bold investment will create numerous jobs, both as direct employment by ISL and related job opportunities in associated support industries.
Pakistan’s demand for cold rolled coils is estimated at over 500,000 tonnes per annum. Local production for cold rolled coil is estimated at 70,000 tonnes by Pakistan Steel Mills and 40,000 by IIL, catering to 14 percent of the domestic demand. The balance requirement is currently being met through imports. Similarly demand for HDG Coils in the country, during 2009-10, was estimated at 300,000 tonnes. Out of this, Pakistan Steel Mills supplies a meager 30,000 tonnes, while the balance is imported.
Products, manufactured by ISL, will be sold to wholesalers and directly to the Industrial customers. Furthermore, one of the major users of the product is International Industries, which is expected to off-take up to 40,000 tonnes of CRC produced by ISL i.e. 40 percent of its capacity. ISL offers an opportunity to provide raw materials for the infrastructure development and add value to the Pakistan’s economic growth through the steel sector which is currently in its infancy stage. Pakistan’s per capita steel consumption, which is largely unorganised, is estimated at 38-40 kg, significantly lower than regional average of 207.8 kg per capita (World Steel Association, 2010).
ISL puts strong emphasis on recruiting and retaining the best professionals who are central to its business model. The management team boosts exemplary industrial backgrounds from top tier institutions across the world. Moreover, the company’s sponsors i.e. IIL have a record of more than 45 years in the steel industry, enabling it to better navigate through the business.