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FTA with China costs us heavily, must be revised-Hussain Agha - Steel industry in Pakistan needs level-playing field.

Mr. Hussain Agha is playing a prominent role in transforming Pakistan's Steel Industry by spearheading Agha Steel Industries to become leading steel manufacturer of the country.

Hussain Agha attended Bentley University, which is ranked amongst the top 15 Business Schools in North America. He excelled to complete his undergraduate degree with a Bachelors of Management, ranking in the top 10 percentile in his graduating class. Further pursuing to complete his MBA, he graduated with Honors from McCallum Graduate School of Business at Bentley University. After attaining an exceptional education, the focus grew towards attaining the knowledge of steel making with an aim to redefine the steel industry of Pakistan.

The innovative idea's of Mr. Hussain Agha, such as focusing on quality products by manufacturing through an Electric Arc Furnace, coupled with the passion for steel making allowed the group to effectively launch the largest steel project of the decade in the private sector of Pakistan in a record-breaking time of only 14.5 months from inception. Mr. Hussain Agha's management skills and technical knowledge of steel making has enabled the Group to effectively expand and penetrate Pakistan's infrastructural development by providing quality steel rebar's and wire rods to many key development projects.

Energy Update: What is the role of your company in development in steel industry in Pakistan?

Hussain Agha: The steel industry plays a vital role in the development of a nation. It is the foremost indicator to accelerate the pace of economic growth and to bring financial stability. Focusing on the steel industry in Pakistan, the total production capacity of the industry stands at approximately 5-6 Million tons per annum against the estimated market demand, with respect to CPEC, is 10 million tons per annum. Contributing in development of steel industry, we are in the process of expanding our production capacity by utilizing the most advanced state of art technology. This will ensure maximum benefits for Agha Steel and all its respective stakeholders.

Furthermore, development of steel industry is associated with clear and consistent policy; without it, steel industry in Pakistan can never be developed. Government has to come upfront in making consistent strategies. However, Agha Steel Industries (ASI) is participating to develop and devise firm policies and viable strategies respectively.

We are also focusing on developing and training talent for the future. They are our backbone and we strive to develop leaders for tomorrow. Our engineers get exposure to the latest steel making technologies at Agha Steel as we are the only steel manfuacturer in Pakistan utilizing an EBT Electric Arc Furnace to make its exclusive Rebars.

EU: Please share the challenges faced for the development in steel industry?

HA: The utmost challenges are being faced by steel industry are: Unavailability and price of electricity, low cost and dumped Chinese import.

Unavailability and Price of Electricity:

Presently, demand of electricity is 20,000 MW against generation of 15,500 MW. Pakistan has been facing severe electricity short fall since last two decades. Demand and supply gap causes power outage and load-shedding which curtail and hinder the development of our domestic steel industry. Moreover, Pakistan is land of natural resources; but in fact, they are not adequately being used to generate electricity. Oddly, electricity generation in Pakistan is based on thermal energy; therefore, it costs too much. Pakistan has the highest energy cost in the region, perhaps one could say our energy tarrif's are amongst the highest in the world! This is a very severe concern for us but we are hopeful of a better future as many new efficient energy projects have been announced.

Low cost and dumped Chinese import: Chinese steel sector is highly subsidized; such as export rebate, subsidies on scrap, and inexpensive; such as cheap electricity. These factors are enough for Chinese steel products to get competitive edge over Pakistani steel products. In addition, Chinese traders/exporters get involved in under invoicing, misdeclaration and dumping of steel products. These unprincipled demeanors adversely affect our national steel industry, as our industry can be coined as an infant industry. An average size steel mill in Pakistan produces 50,000 tons per year, whereas in China the average steel mill manufactures over 4 million tons per year! Pakistan only produces 0.3% of the steel in the world, whereas China produces more than 51% of total steel production.

Evidently, a level playing field is the need of the hour and a positive road map needs to be planned out so we can move our local industry towards world standards. We hope that our issues are addressed amicably by the government of Pakistan.

EU: Your views about the energy crises in the country? And its solution?

HA:Energy plays vital role for socio-economic development of a nation and it is considered as a lifeline for industrial growth. Owing to increase in population, demographic changes and industrialization, an enormous increase in energy demand has been witnessed. Undoubtedly, electricity is an important source of energy and consistently; every time, there is shortfall of approximately 4,500 MW. Therefore, it is essential for government to narrow down the electricity shortfall up to breakeven or in surplus. Simply put, we have an easy solution for resolving energy crisis; "when there's a will there's a way". Let us hope for a better future and a brighter Pakistan. This nation is the gem of Asia and we are on the path of becoming the roaring Asian Tiger if our energy projects are executed efficiently. Pakistan has the best resources in the world available.

We have abundant natural resources and our workforce has brilliant engineers, minds, and talent. We just need to learn to mobilize and effectively utilize all our resources in an efficient manner to realize the strength that lies within. We can easily become a world class economy, and the energy sector must become the catalyst to spark the growth potential downstream. Based on researches, household and industrial sectors consume electricity 45.6% and 28.4% of total electricity respectively. If we shift household sector on solar energy we cannot only reduce the electricity shortfall but we will have electricity in excess. For reference one should go through Chinese project Green peace's 5-kilowatt pilot rooftop project. We must utilize Pakistan's promising natural resources such as wind, hydro, waves and solar energy. In modern world they call it "renewable energy," I like to call it the future!

EU: What's your edge in steel industry?

HA: "Quality" gives us a competitive edge in steel industry. In addition, we own state of-art-technology such as Electric Arc Furnace and 25 Strand Automated Rolling mill. Complemented by our innovativeness in manufacturing steel, coupled with competent engineering team, Agha Steel Industries takes pride to win the Consumer Choice Awards 2014- 2015 for being the "Manufacturer of First Earthquake Resistance Rebar" in steel industry of Pakistan. This is testament to the potential of our engineering sector and Agha Steel's vision to redefine the local steel industry of Pakistan. We even had steel companies from the United Kingdom congratulating us on such a wondrous feat. Our Rebar's offer unparallel quality that can ensure upto 15% savings in consumption when compared to commercial grade rebars. Its truly a technological breakthrough for our steel industry.

EU: What is your suggestion to develop steel industry in Pakistan?

HA: The steel industry has been facing severe threats due to inexpensive dumped Chinese imports. A level playing field is required to ensure a conducive environment for growth. Officially, Pakistan signed an FTA with China in 2007, however this turned out to be a tragedy for our economy. According to statistics, trade deficit with China during the nine months (July-March) was $3.398 bn which was 200% more than Pakistan's exports to China. Exports to China during nine months were $1.694 billion compared to imports of $5.092 billion. This is very alarming and our government must address these trade related issues positively. Government is the key player to develop steel industry in Pakistan. Steel industry in Pakistan needs firm policies for survival and stability of itself. Government should review FTA with China and provide level playing field for our Domestic steel industry.

Furthermore, the government should effectively implement policies to curb under invoicing, misdeclaration and dumping of Chinese steel products. . Efficient and substantial investments can easily be made if the government sets a transparent roadmap and investment friendly policy for the next 10 years.

EU: Would you like to say something about Corporate Ethics and CSR?

HA: Corporate ethics are very essential and as company evolves, the emphasis on corporate ethics grows alongside with corporate social responsibility. At ASI, it is at the very heart of our core business and we must play a positive role for our communities. Aligned with our focus on CSR, we have envisioned Agha Dialysis Center (ADC), which is a free of cost Dialysis Center. At ADC, we firmly believe that nobody should die just because they cannot afford to live. In Paksitan too, many people have died just because they could not afford a dialysis treatment. This is unacceptable and we hope to serve the needy. Over 20 million people have Chronic Kidney Disease (CKD) in Pakistan.Diabetes and hypertension are the two main reasons for CKD. Shockingly, the figure of people with diabetes is expected to grow by over 200% in the next three decades.

This is highly alarming and leaders of our society must work to reverse this trend. Corporate ethics are very important and I firmly believe that for a company to grow, corporate ethics must be part of the fundamental pillars.

Moreover, we are going to consider numerous new projects to provide free food and education under the banner of "Agha Food Recovery" and "Agha Technical Institute". We believe society will be healthier, if we provide them opportunities to fulfill basic necessities. In fact food, education and health are basic needs for which we live on.

EU: Agha Steel Industries is heading to the new era of steel-making, what are the secrets behind this great success?

HA:While many factors are involved for success, the greatest is the guidance and support we have bestowed upon is from the Almighty Allah. Additionally, our constant focus on ensuring quality above profits enables us to provide superior products and customer savings to our end users. Customer service is the principal focus of our organization and we view them as our business partners, aiming to always create a win-win situation. It's all about team work and creating a positive environment for all stakeholders.
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Publication:Energy Update
Geographic Code:9PAKI
Date:May 31, 2016
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