Daily Times

Due to economic hardships, the Board of Directors (BoD) of Amreli Steels Limited (ASTL) has decided to temporarily suspend operations at the SITE Rolling Mill (SRM) in Karachi. The site represents 30% of the company’s production capacity, the listed company stated in its notice to the Pakistan Stock Exchange (PSX) on Tuesday. “In today’s meeting, the BoD discussed the significant economic challenges facing the documented steel sector. “These challenges have been aggravated by various economic and political factors, including declining demand for steel rebars, rising utility costs (particularly electricity), high interest rates, an unbalanced tariff structure, heavy tax burdens, smuggling, and increased undocumented activities, all of which contribute to unfair competition and severely disrupt market equilibrium,” read the notice. The company stated that considering macroeconomic conditions, the board has “decided to temporarily suspend operations at its oldest Karachi-based manufacturing facility, SITE Rolling Mill (SRM), which represents 30% of the company’s total production capacity”. “The situation will be reviewed in six months, and the facility may reopen if conditions improve,” Amreli Steel stated. During this period, ASTL will continue operating its Dhabeji facility, which accounts for 70% of its production capacity, to meet current and future steel demand, it informed. The development come a day after Amreli Steels reported a massive loss of Rs6.1 billion amid a drop in sales and high expenses during the year that ended June 30, 2024. As per the company’s latest financial results provided to the PSX, the steel maker saw its gross profit drop to Rs2.4 billion in FY24, down 60% as compared to Rs5.95 billion in the previous year.