M. Sameer Nazir
KARACHI: Amreli Steels Limited, the largest selling brand of steel bars in Pakistan for the past 40 years, posted record sales figures for FY15 in excess of PKR 14 billion. Record sales coupled with increased margins have resulted in an annual EPS in excess of PKR 4.
“Our sales performance in terms of revenue and volume speak for the fact that our brand is growing stronger every year and we are increasing our penetration in distribution channels across the country,” said Mr. Anwar Kamal, Director Sales at Amreli maintained.
Amreli Steels is the leading steel bar supplier to most of the mega-projects such as Neelum-Jhelum Dam, Karachi Ship Yard, SEPCO III 1360 MW power station, and Lucky One to name a few. “We purchase most of our steel from Amreli because they have the capability to manufacture and deliver steel in large quantities and quality which is required for infrastructure projects and we receive excellent service from them” mentioned Mr. Kang Sin Kil, the Site Manager at the PEN-TSML joint venture at Karachi Shipyard.
After witnessing an impressive 5 year sales CAGR of 30% the company is set to expand its production facilities by setting up a Greenfield project that will enhance finished goods and raw material manufacturing capacity by investing in pioneering technology. Mr. Kamal stated “Our performance this year is not an outlier because we have been consistently building up sales volumes to get to this stage and our manufacturing plants are now at 90% capacity utilization. The obvious next step is to expand our manufacturing facilities because the demand outlook is very robust.”
“We are able to achieve sustained sales performance because we have the economies of scale to spread our presence over all provinces, distribution channels and customer groups so that we reduce the effect of cyclicality and volatility that other companies witness. Our largest customer represents only 1.5% of our total sales which shows that we have a large and diverse customer base” mentioned Mr. Anwar Kamal.
The steel industry believes the future is bright for construction, which is evident as the iron and steel sector was the best performing LSM sector in FY15 with a growth of 36%. A record PSDP outlay of PKR 700 billion for FY16, corporate sector expansion as witnessed by stock exchanges and housing / commercial building projects estimated at PKR 600 billion that are supposed to launch this year are great signs for the industry.