Saudi-owned Tuwairqi Steel Mills Limited (TSML) aims to start production by the beginning of the fourth quarter and grow to eventually become Pakistan's largest steel producer, a TSML executive said on Tuesday. In its first phase, TSML's Karachi-based plant is targeted to have a production capacity of 1.28 million tons per year of direct reduced iron, which is used to make steel, Zaigham Rizvi, TSML director of projects, told Reuters in a telephone interview. “The construction of the plant took about three years and there was a nine-month delay due to finalizing procedures, but now construction is 95 per cent complete and we are ready to start production in Q4,” said Rizvi, adding that full capacity would be reached within a year's time. State-owned Pakistan Steel is currently the largest operating steel mill in the country with a capacity of 1.1 million tons per year. “We will be overtaking the title of the largest producer once we are operating at full capacity, but there is still so much room for growth in the market,” said Rizvi. TSML is fully owned by Saudi-based Tuwairqi Holding, which also owns one of the largest private sector steel mills in the Kingdom. The first phase of TSML cost $275 million and was fully financed by Tuwairqi Holding, including 65 per cent through debt. “In the second phase of the project we plan to produce finished products such as slabs and billets, and this will be completed by 2012 and will cost around $275 million,” Rizvi said. The firm is also looking at opportunities for iron ore exploration in Pakistan's Baluchistan and Punjab provinces, he added. “But for now we will be buying the ore from Bahrain.” Pakistan's annual demand for steel is around 8.4 million tons, while production is 4.9 million tonnes per year, said Rizvi. “TSML will be playing a pivotal role in bridging the gap between the demand and supply of steel in Pakistan, but we still plan to export 50 percent of our production to India and the Middle East,” he added.
