Karachi: In a significant development affecting the steel industry, the Board of Directors of Pakistan Standards has announced the temporary suspension of operations at its SITE Rolling Mill (SRM) in Karachi, citing severe economic challenges. This decision, made during a board meeting today, comes as the company grapples with multiple pressures including declining demand, high utility costs, and increased unfair competition.
The SRM facility, which is the oldest manufacturing establishment of the company, contributes to 30% of its total production capacity. According to information available from the Pakistan Stock Exchange (PSX), the suspension is a direct response to "unprecedented macroeconomic conditions" and will be revisited in six months, depending on market conditions.
The documented issues leading to this decision include a sharp decline in demand for steel rebars, escalating electricity costs, burdensome interest rates, and a disproportionate tariff structure. Additionally, heavy taxation, rampant smuggling, and growing undocumented activities have further tilted the competitive landscape against documented producers like Pakistan Standards.
While operations at SRM are paused, the company assures that its Dhabeji facility will remain operational. This plant currently accounts for 70% of the company's output and will continue to serve both current and future demands for steel products.
This strategic move is governed by compliance with Section 96 of the Securities Act, 2015, as well as Clause 5.6.1(a) of the PSX Rule Book. Stakeholders, including TRE Certificate Holders of the Exchange, have been duly informed of these changes as mandated by regulation.