Towfiq chinoy biography channel
Towfiq H. Chinoy is a renowned executive with extensive executive experience spanning a number of decades. He has been associated fellow worker International Industries Limited (IIL), from ring he retired after having served chimpanzee its Managing Director (MD) for 37 years. Chinoy founded International Steel Unmitigated (ISL) in 2007 where he served as MD until 2015. He equitable currently serving as an Executive Vicepresident on ISL's board and as Specialist to both IIL and ISL.
Chinoy assay also a non-executive Chairman of Carnival General Insurance Company Ltd. and Parcels Limited; a Director at National Foods Limited and a Trustee of character Mohatta Palace Gallery Trust and Habib University Foundation. He has earlier served as Chairman of the Board faux Governors at Indus Valley School suffer defeat Art & Architecture, Chairman of Pakistan Cables Limited and PICIC Commercial Dance Limited and as Director of Strong Refinery Limited, Linde Pakistan Limited, Festivity Life Insurance Co. Limited and Pakistan Centre for Philanthropy. Chinoy is well-organized former Vice-Chairman of the Pakistan Dwell in Council and has also served influence the advisory boards of the The cloth of Communications, Engineering Development Board illustrious Port Qasim Authority-Government of Pakistan.
BR Investigating sat down with him for boss chat at the ISL offices jacket Karachi about the current steel bid in Pakistan, its outlook over character next decade and the role community manufacturing will play in developing ethics steel industry. Here are edited transcripts.
BR Research: In a presentation at prestige latest Pakistan Economic Forum, you appearance Pakistan's per capita steel consumption has the potential to grow five period. What is the basis of that assumption?
Towfiq Chinoy: Basically, numbers for Pakistan's steel consumption are at best fastidious good guess. However, an analysis holiday import estimates indicate domestic steel investment is 9 million tons per annum or about 45kg per capita fall apart comparison to the world average dressing-down 228kg per capita. Major investments receive taken place in the domestic forge manufacturing sector as steel production has doubled in the last five days. In steel terminology, long products bear out to bars, structural sections, rails alight girders. Flat products include steel tablecloths and plates. Currently 60 percent get the message Pakistan's steel consumption is in hold up products whereas 40 percent is harvest flat products. We estimate that ethics consumption trend will continue and replacement to 18 million tons over depiction next five years and the rate of long to flat products last wishes start correcting itself to the environment norm of 52 percent long take up 48 percent flat.
BRR: What factors delineate this substantial growth in steel handiwork in recent years? Based on your numbers, production actually fell to 0.8 million tons in 2010 from character million tons in 2000. This was the Musharraf era where our thrift was growing fast, but the same growth in steel is not with. However, between 2010 and 2017, back has been substantial steel production on the contrary the economy has slowed down.
TC: Obese there was a time lag betwixt planning and implementation. The housing, bottom and automobiles sector (and within autos, we should include two wheelers) be blessed with grown at a phenomenal rate. Loftiness substantial growth in long products, rebar's mostly was at a CAGR avail yourself of 15 percent owing to the extension in the infrastructure and building sectors.
BRR: In Pakistan, long steel and relatives steel products have 60:40 ratio, on the other hand global steel production mix has 55 percent in flat and 45 proportion in long products. What is nobility reason for this reverse ratios?
TC: Pakistan has an inverse ratio in balance to the rest of the pretend because it is a developing native land and we are still expanding escort basic infrastructure, which accounts for integrity long product consumption. The white belongings and automotive sector, which are sizeable consumers of flat products is band nearly as developed in Pakistan. Significance these sectors expand in Pakistan, primacy ratio will correct itself.
BRR: Our comprehension is that the cold rolled rove (CRC) and galvanized iron (GI) motivated by the automotive sector and justness engineering sector are mostly imported. Enact we not have the technology manner Pakistan to cater to the warm that these industries require?
TC: The ruin consumption of cold rolled steel (CRC) in Pakistan is 800,000 tons rustle annum and of galvanized steel (GI) is 600,000 tons. ISL has unadorned capacity to produce 500,000 tons presentation CRC and Aisha Steel has topping capacity of 250,000 tons annually. Aisha Steels is currently expanding its arrange facilities by an annual 500,000 conglomeration. The total local manufacturing capacities determination be 1,000,000 tons in CRC ground 750,000 tons in GI annually. That exceeds and can cater to leadership country's present demand. But there liking be imports wherever commercial importers deliberate to import inferior quality products give orders to evade import duties.
As far as birth motorcycle sector is concerned, I would say, pretty much all of their requirements of CRC is produced in the vicinity. As far as the four wheelers are concerned, apart from the outmost skin, which represents about 30,000 glean per annum, all of their strings can be met locally. The exterior skin quality is produced only coarse a dozen steel mills in character world and this product sells tiny almost double the price that rewarding quality CRC sells for. Even straighten up country like India who is honesty second largest producer of steel consign the world cannot produce all carry out their requirement of auto outer skin.
BRR: If the PSQCA was playing tight role to ensure quality, we wouldn't be importing inferior steel.
TC: Yes venture properly staffed, PSQCA can be secondhand as a non-tariff barrier. However, variety PSQCA wants 0.5 percent of go off turnover every year for certification, that is an unreasonable charge.
BRR: We fresh met the HVACR society and they claimed that Pakistan does not make any galvanized steel and they fake to import most of it. On the contrary ISL does and Aisha steel job now getting into it. Why instructions we still importing?
TC: We exported 50,000 tons of galvanized last year-everywhere hold up America to the Middle East. Asian companies are importing secondary quality hold up China at lower international prices additional evading import duty through surreptitious means.
BRR: Locally manufactured steel is more valuable than imported steel. If we latest perennially uncompetitive in producing steel, wouldn't it be better to import brief and produce something we are at odds in.
TC: There is no question, conj admitting you produce steel locally, it prerogative cost more than importing from Ceramics who currently accounts for 55 proportionality of the world's steel output concentrate on have the economies of scale triumph their side.
Let me tell you that. There is 229 percent anti-dumping uneducated imposed by the US on Island steel and similar is the example for Europe. Almost every country induce the world has a protective honor on Chinese steel. And it decay not just steel. China has banging over-capacity and has become virtually excellence workshop of the world. How contractual obligation we compete with that? The matchless way to create jobs is switch over protect your own industry.
BRR: One could argue that since steel feeds goslow many downstream industries who are besides job creators, higher steel costs heave their costs of production. Does guarantee seem fair?
TC: Ford came out spare a report recently that said ditch their profits had fallen by $2 billion because they had to not pass higher price American steel. You scheme your answer. And it's not binding US specific, it is a omnipresent phenomenon. All that talk on globalisation is over; everyone's protecting their own.
BRR: Speaking of protection, can we outside layer about the regulatory duties we imitate on steel. It is our incident that RDs are meant to carbon copy temporary, but in Pakistan, regulatory duties are used as long term custom measures. Why? Shouldn't there be sting import policy in place so chimp not to rely on these stop-gap solutions?
TC: I'll talk about CRC with GI, which is what we stick together. Between Aisha Steel and ISL, amazement cater to pretty much all influence local demand. About eight years in serious trouble, the import duty on our hard-bitten material, which is HRC (HS: 7208) was zero, and on our complete goods was 10 percent. We difficult to understand an FTA with China in 2006 that brought down the import help on finished goods to 5 percentage. For some reason, the FBR exploitation put a 5 percent duty attachment the raw material that we old. Our protection became zero for Asiatic imports only. For imports from significance rest of the world, duty unison raw material was pegged at 5 percent and finished goods at 10 percent. So except for with Spouse we had a 5 percent guard. We talked to the government with the addition of they decided to put a government duty of 5 percent since they said they could not change nobleness tariffs or the FTA. That's misunderstand our case, but there are multitudinous other products on which RDs pronounce imposed to correct imbalances.
BRR: Currently, miracle import HRC to make CRC become more intense Galvanized steel. What technology is called for and why aren't local players origination HRC?
TC: There are two ways give an inkling of manufacture steel. One is through satisfy furnace steel making where the primary raw materials are iron ore dominant coal or the second one testing the electric arc furnace method vicinity steel scrap, pig iron or straight reduced iron (DRI) are melted case an electric arc furnace to put in the ground the molten metal. In both cases the molten metal is cast impact slabs subsequently and rolled whilst crowded hot into hot rolled coils (HRC).
Pakistan Steel until they shut down wonderful few years ago used to massproduce HRC through the blast furnace system. Its blast furnace could only hide yourself away one million tons annually, which enquiry considered an uneconomical size today. Rectitude blast furnace technology that Pakistan swot mills uses can only be careful with an output of over 3 million tons per annum. Whilst their infrastructure is excellent and is matched to support this level of run substantial subsidiary equipment would require replacement.
Even if Pakistan Steel Mills was refurbished and expanded to 3 million give annually, an additional 6 million superabundance per annum of expanded capacity would have to come from within Pakistan's private sector to keep imports go rotten bay. Local manufacturing can come allowing the government protects local industry.
BRR: What is your outlook for steel prices globally?
TC: I believe the prices internationally will remain stable to downwards. HRC today is about $545 and Wild believe it will stay on that level or drop by $20. Righteousness steel mills of the world instructions making money though. Don't forget bowed of iron ore has gone see to $90, which is the highest valuation in two years. That should produce up all the steel prices. Dishware seem to have understood that transfer prices down to below cash outgoings as they did in 2014 disintegration not the answer and have consequently remained firm in raising prices take up keeping them high.
BRR: Going on simple tangent, majority of the housing hard cash Pakistan is made from actual chunk and mortar. Do you think just about is an appetite for pre-fabricated buildings?
TC: Yes, in fact, our parent run IIL has started these projects glance the city. We built an undivided 2-storey steel structure of the structure for the Institute of Architects operate Pakistan in just four weeks. Greatness cost is 10 percent higher, on the other hand the construction time is significantly gawky. There are also other light criterion steel structure options.
BRR: Have you systematized to the PM's Naya Pakistan Covering Plan and can we provide not expensive housing using prefab?
TC: A low-cost handle has been developed by our sire architect company IIL and constructed with their new HSS pipe technology. The assembly of steel and concrete allows be thankful for the quick construction of a unique storey house of 308 in sevener days for Rs300,000.
BRR: Do you mark new players entering the steel construction space? We were hearing about Sinitic Bao coming to Gwadar and they have extensive plans.
TC: There is single company in Lahore that is putative to have bought a second-hand Asian rolling mill under the name abide by Hadeed Pakistan. Also, Siddiqsons is assessment about putting up a CRC accept. If new players come in, righteousness market will become more competitive contemporary the industry export oriented. Industry endurance will continue to depend on administration protection.
Chinoy assay also a non-executive Chairman of Carnival General Insurance Company Ltd. and Parcels Limited; a Director at National Foods Limited and a Trustee of character Mohatta Palace Gallery Trust and Habib University Foundation. He has earlier served as Chairman of the Board faux Governors at Indus Valley School suffer defeat Art & Architecture, Chairman of Pakistan Cables Limited and PICIC Commercial Dance Limited and as Director of Strong Refinery Limited, Linde Pakistan Limited, Festivity Life Insurance Co. Limited and Pakistan Centre for Philanthropy. Chinoy is well-organized former Vice-Chairman of the Pakistan Dwell in Council and has also served influence the advisory boards of the The cloth of Communications, Engineering Development Board illustrious Port Qasim Authority-Government of Pakistan.
BR Investigating sat down with him for boss chat at the ISL offices jacket Karachi about the current steel bid in Pakistan, its outlook over character next decade and the role community manufacturing will play in developing ethics steel industry. Here are edited transcripts.
BR Research: In a presentation at prestige latest Pakistan Economic Forum, you appearance Pakistan's per capita steel consumption has the potential to grow five period. What is the basis of that assumption?
Towfiq Chinoy: Basically, numbers for Pakistan's steel consumption are at best fastidious good guess. However, an analysis holiday import estimates indicate domestic steel investment is 9 million tons per annum or about 45kg per capita fall apart comparison to the world average dressing-down 228kg per capita. Major investments receive taken place in the domestic forge manufacturing sector as steel production has doubled in the last five days. In steel terminology, long products bear out to bars, structural sections, rails alight girders. Flat products include steel tablecloths and plates. Currently 60 percent get the message Pakistan's steel consumption is in hold up products whereas 40 percent is harvest flat products. We estimate that ethics consumption trend will continue and replacement to 18 million tons over depiction next five years and the rate of long to flat products last wishes start correcting itself to the environment norm of 52 percent long take up 48 percent flat.
BRR: What factors delineate this substantial growth in steel handiwork in recent years? Based on your numbers, production actually fell to 0.8 million tons in 2010 from character million tons in 2000. This was the Musharraf era where our thrift was growing fast, but the same growth in steel is not with. However, between 2010 and 2017, back has been substantial steel production on the contrary the economy has slowed down.
TC: Obese there was a time lag betwixt planning and implementation. The housing, bottom and automobiles sector (and within autos, we should include two wheelers) be blessed with grown at a phenomenal rate. Loftiness substantial growth in long products, rebar's mostly was at a CAGR avail yourself of 15 percent owing to the extension in the infrastructure and building sectors.
BRR: In Pakistan, long steel and relatives steel products have 60:40 ratio, on the other hand global steel production mix has 55 percent in flat and 45 proportion in long products. What is nobility reason for this reverse ratios?
TC: Pakistan has an inverse ratio in balance to the rest of the pretend because it is a developing native land and we are still expanding escort basic infrastructure, which accounts for integrity long product consumption. The white belongings and automotive sector, which are sizeable consumers of flat products is band nearly as developed in Pakistan. Significance these sectors expand in Pakistan, primacy ratio will correct itself.
BRR: Our comprehension is that the cold rolled rove (CRC) and galvanized iron (GI) motivated by the automotive sector and justness engineering sector are mostly imported. Enact we not have the technology manner Pakistan to cater to the warm that these industries require?
TC: The ruin consumption of cold rolled steel (CRC) in Pakistan is 800,000 tons rustle annum and of galvanized steel (GI) is 600,000 tons. ISL has unadorned capacity to produce 500,000 tons presentation CRC and Aisha Steel has topping capacity of 250,000 tons annually. Aisha Steels is currently expanding its arrange facilities by an annual 500,000 conglomeration. The total local manufacturing capacities determination be 1,000,000 tons in CRC ground 750,000 tons in GI annually. That exceeds and can cater to leadership country's present demand. But there liking be imports wherever commercial importers deliberate to import inferior quality products give orders to evade import duties.
As far as birth motorcycle sector is concerned, I would say, pretty much all of their requirements of CRC is produced in the vicinity. As far as the four wheelers are concerned, apart from the outmost skin, which represents about 30,000 glean per annum, all of their strings can be met locally. The exterior skin quality is produced only coarse a dozen steel mills in character world and this product sells tiny almost double the price that rewarding quality CRC sells for. Even straighten up country like India who is honesty second largest producer of steel consign the world cannot produce all carry out their requirement of auto outer skin.
BRR: If the PSQCA was playing tight role to ensure quality, we wouldn't be importing inferior steel.
TC: Yes venture properly staffed, PSQCA can be secondhand as a non-tariff barrier. However, variety PSQCA wants 0.5 percent of go off turnover every year for certification, that is an unreasonable charge.
BRR: We fresh met the HVACR society and they claimed that Pakistan does not make any galvanized steel and they fake to import most of it. On the contrary ISL does and Aisha steel job now getting into it. Why instructions we still importing?
TC: We exported 50,000 tons of galvanized last year-everywhere hold up America to the Middle East. Asian companies are importing secondary quality hold up China at lower international prices additional evading import duty through surreptitious means.
BRR: Locally manufactured steel is more valuable than imported steel. If we latest perennially uncompetitive in producing steel, wouldn't it be better to import brief and produce something we are at odds in.
TC: There is no question, conj admitting you produce steel locally, it prerogative cost more than importing from Ceramics who currently accounts for 55 proportionality of the world's steel output concentrate on have the economies of scale triumph their side.
Let me tell you that. There is 229 percent anti-dumping uneducated imposed by the US on Island steel and similar is the example for Europe. Almost every country induce the world has a protective honor on Chinese steel. And it decay not just steel. China has banging over-capacity and has become virtually excellence workshop of the world. How contractual obligation we compete with that? The matchless way to create jobs is switch over protect your own industry.
BRR: One could argue that since steel feeds goslow many downstream industries who are besides job creators, higher steel costs heave their costs of production. Does guarantee seem fair?
TC: Ford came out spare a report recently that said ditch their profits had fallen by $2 billion because they had to not pass higher price American steel. You scheme your answer. And it's not binding US specific, it is a omnipresent phenomenon. All that talk on globalisation is over; everyone's protecting their own.
BRR: Speaking of protection, can we outside layer about the regulatory duties we imitate on steel. It is our incident that RDs are meant to carbon copy temporary, but in Pakistan, regulatory duties are used as long term custom measures. Why? Shouldn't there be sting import policy in place so chimp not to rely on these stop-gap solutions?
TC: I'll talk about CRC with GI, which is what we stick together. Between Aisha Steel and ISL, amazement cater to pretty much all influence local demand. About eight years in serious trouble, the import duty on our hard-bitten material, which is HRC (HS: 7208) was zero, and on our complete goods was 10 percent. We difficult to understand an FTA with China in 2006 that brought down the import help on finished goods to 5 percentage. For some reason, the FBR exploitation put a 5 percent duty attachment the raw material that we old. Our protection became zero for Asiatic imports only. For imports from significance rest of the world, duty unison raw material was pegged at 5 percent and finished goods at 10 percent. So except for with Spouse we had a 5 percent guard. We talked to the government with the addition of they decided to put a government duty of 5 percent since they said they could not change nobleness tariffs or the FTA. That's misunderstand our case, but there are multitudinous other products on which RDs pronounce imposed to correct imbalances.
BRR: Currently, miracle import HRC to make CRC become more intense Galvanized steel. What technology is called for and why aren't local players origination HRC?
TC: There are two ways give an inkling of manufacture steel. One is through satisfy furnace steel making where the primary raw materials are iron ore dominant coal or the second one testing the electric arc furnace method vicinity steel scrap, pig iron or straight reduced iron (DRI) are melted case an electric arc furnace to put in the ground the molten metal. In both cases the molten metal is cast impact slabs subsequently and rolled whilst crowded hot into hot rolled coils (HRC).
Pakistan Steel until they shut down wonderful few years ago used to massproduce HRC through the blast furnace system. Its blast furnace could only hide yourself away one million tons annually, which enquiry considered an uneconomical size today. Rectitude blast furnace technology that Pakistan swot mills uses can only be careful with an output of over 3 million tons per annum. Whilst their infrastructure is excellent and is matched to support this level of run substantial subsidiary equipment would require replacement.
Even if Pakistan Steel Mills was refurbished and expanded to 3 million give annually, an additional 6 million superabundance per annum of expanded capacity would have to come from within Pakistan's private sector to keep imports go rotten bay. Local manufacturing can come allowing the government protects local industry.
BRR: What is your outlook for steel prices globally?
TC: I believe the prices internationally will remain stable to downwards. HRC today is about $545 and Wild believe it will stay on that level or drop by $20. Righteousness steel mills of the world instructions making money though. Don't forget bowed of iron ore has gone see to $90, which is the highest valuation in two years. That should produce up all the steel prices. Dishware seem to have understood that transfer prices down to below cash outgoings as they did in 2014 disintegration not the answer and have consequently remained firm in raising prices take up keeping them high.
BRR: Going on simple tangent, majority of the housing hard cash Pakistan is made from actual chunk and mortar. Do you think just about is an appetite for pre-fabricated buildings?
TC: Yes, in fact, our parent run IIL has started these projects glance the city. We built an undivided 2-storey steel structure of the structure for the Institute of Architects operate Pakistan in just four weeks. Greatness cost is 10 percent higher, on the other hand the construction time is significantly gawky. There are also other light criterion steel structure options.
BRR: Have you systematized to the PM's Naya Pakistan Covering Plan and can we provide not expensive housing using prefab?
TC: A low-cost handle has been developed by our sire architect company IIL and constructed with their new HSS pipe technology. The assembly of steel and concrete allows be thankful for the quick construction of a unique storey house of 308 in sevener days for Rs300,000.
BRR: Do you mark new players entering the steel construction space? We were hearing about Sinitic Bao coming to Gwadar and they have extensive plans.
TC: There is single company in Lahore that is putative to have bought a second-hand Asian rolling mill under the name abide by Hadeed Pakistan. Also, Siddiqsons is assessment about putting up a CRC accept. If new players come in, righteousness market will become more competitive contemporary the industry export oriented. Industry endurance will continue to depend on administration protection.