Sumitomo Corp. to Get Share in Pakistan Flat Steel Maker

Sumitomo Corporation invests steel business in Pakistan. The firm has share in cold rolled and galvanizing steel maker, International Steels. Sumitomo Corporation provides the materials steel band and management support for the maker to follow growing demand for construction materials in Pakistan as a part of NEXT11, which are countries with high growth rate after BRICs.

International Steels held opening ceremony in Kalach on March 4. Sumitomo Corporation sent officials for the ceremony.

Pakistan steel demand is only around 6 million tonnes per year. However, the demand is expected to grow more when economy of the country with 160 million population grows annualized 4-6%. The country depends the steel supply on import when the country’s largest integrated steel maker of state owned Pakistan Steel Mills has annual 1 million tonnes of raw steel output capacity.

International Steels started the history in August 2010 when International Industries, which is Pakistan largest steel pipe maker with more than 50% share, established the arm as subsidiary. International Steels built new plant for around 12 billion yen. The plant already started operation of hot dip galvanizing line with annual 150,000 tonnes of output capacity in June 2010. The plant also started test operation of cold rolling mill with annual 250,000 tonnes of capacity. The plant will reach full capacity operation in the year under the strong demand for construction materials.

International Steels apparently expects Sumitomo Corporation to provide stable sourcing service of the material band and technical support from flat steel makers with Sumitomo Corporation’s equity.

International Steels plans initial public offering at local exchange in late March. The parent company of International Industries will keep 55% share in International Steels while Sumitomo Corporation will purchase 500 million yen share in International Steels, which is estimated to be around 8.5% share in the new public company. International Finance Corporation also plans to purchase 10% share in International Steels.