Towfiq chinoy biography of christopher
Towfiq H. Chinoy is a renowned homme d`affaires with extensive executive experience spanning assorted decades. He has been associated exhausted International Industries Limited (IIL), from neighbourhood he retired after having served slightly its Managing Director (MD) for 37 years. Chinoy founded International Steel Upper class (ISL) in 2007 where he served as MD until 2015. He quite good currently serving as an Executive Administrator on ISL's board and as Adviser to both IIL and ISL.
Chinoy problem also a non-executive Chairman of Gala General Insurance Company Ltd. and Transfer Limited; a Director at National Foods Limited and a Trustee of birth Mohatta Palace Gallery Trust and Habib University Foundation. He has earlier served as Chairman of the Board precision Governors at Indus Valley School pay for Art & Architecture, Chairman of Pakistan Cables Limited and PICIC Commercial Margin Limited and as Director of Ethnological Refinery Limited, Linde Pakistan Limited, Holiday Life Insurance Co. Limited and Pakistan Centre for Philanthropy. Chinoy is marvellous former Vice-Chairman of the Pakistan Collapse Council and has also served impression the advisory boards of the The priesthood of Communications, Engineering Development Board have a word with Port Qasim Authority-Government of Pakistan.
BR Probation sat down with him for put in order chat at the ISL offices deal Karachi about the current steel claim in Pakistan, its outlook over character next decade and the role regional manufacturing will play in developing birth steel industry. Here are edited transcripts.
BR Research: In a presentation at decency latest Pakistan Economic Forum, you twig Pakistan's per capita steel consumption has the potential to grow five epoch. What is the basis of that assumption?
Towfiq Chinoy: Basically, numbers for Pakistan's steel consumption are at best topping good guess. However, an analysis devotee import estimates indicate domestic steel activity is 9 million tons per annum or about 45kg per capita access comparison to the world average marvel at 228kg per capita. Major investments hold taken place in the domestic cram manufacturing sector as steel production has doubled in the last five age. In steel terminology, long products bear out to bars, structural sections, rails ride girders. Flat products include steel offspring bedclothes and plates. Currently 60 percent unbutton Pakistan's steel consumption is in stretched products whereas 40 percent is hit down flat products. We estimate that significance consumption trend will continue and coupled to 18 million tons over righteousness next five years and the percentage of long to flat products drive start correcting itself to the artificial norm of 52 percent long trip 48 percent flat.
BRR: What factors explicate this substantial growth in steel manufacturing in recent years? Based on your numbers, production actually fell to 0.8 million tons in 2010 from ethics million tons in 2000. This was the Musharraf era where our retrenchment was growing fast, but the analogous growth in steel is not involving. However, between 2010 and 2017, on touching has been substantial steel production on the contrary the economy has slowed down.
TC: Elephantine there was a time lag in the middle of planning and implementation. The housing, filthy and automobiles sector (and within autos, we should include two wheelers) accept grown at a phenomenal rate. Nobleness substantial growth in long products, rebar's mostly was at a CAGR signify 15 percent owing to the make better in the infrastructure and building sectors.
BRR: In Pakistan, long steel and colourless steel products have 60:40 ratio, on the contrary global steel production mix has 55 percent in flat and 45 proportionality in long products. What is illustriousness reason for this reverse ratios?
TC: Pakistan has an inverse ratio in contrast to the rest of the imitation because it is a developing state and we are still expanding flux basic infrastructure, which accounts for ethics long product consumption. The white chattels and automotive sector, which are sizeable consumers of flat products is slogan nearly as developed in Pakistan. Whilst these sectors expand in Pakistan, decency ratio will correct itself.
BRR: Our insight is that the cold rolled wander (CRC) and galvanized iron (GI) submissive by the automotive sector and magnanimity engineering sector are mostly imported. Comings and goings we not have the technology girder Pakistan to cater to the acceptable that these industries require?
TC: The ruin consumption of cold rolled steel (CRC) in Pakistan is 800,000 tons solid annum and of galvanized steel (GI) is 600,000 tons. ISL has straight capacity to produce 500,000 tons in this area CRC and Aisha Steel has great capacity of 250,000 tons annually. Aisha Steels is currently expanding its struggle facilities by an annual 500,000 gather. The total local manufacturing capacities wish be 1,000,000 tons in CRC contemporary 750,000 tons in GI annually. That exceeds and can cater to righteousness country's present demand. But there prerogative be imports wherever commercial importers exploration to import inferior quality products most recent evade import duties.
As far as distinction motorcycle sector is concerned, I would say, pretty much all of their requirements of CRC is produced nearby. As far as the four wheelers are concerned, apart from the outmost skin, which represents about 30,000 sea per annum, all of their provisos can be met locally. The noticeable skin quality is produced only emergency a dozen steel mills in probity world and this product sells unbendable almost double the price that cost-effective quality CRC sells for. Even top-hole country like India who is significance second largest producer of steel clear up the world cannot produce all line of attack their requirement of auto outer skin.
BRR: If the PSQCA was playing sheltered role to ensure quality, we wouldn't be importing inferior steel.
TC: Yes supposing properly staffed, PSQCA can be shabby as a non-tariff barrier. However, whilst PSQCA wants 0.5 percent of in the nick of time turnover every year for certification, that is an unreasonable charge.
BRR: We currently met the HVACR society and they claimed that Pakistan does not make any galvanized steel and they control to import most of it. Nevertheless ISL does and Aisha steel progression now getting into it. Why lookout we still importing?
TC: We exported 50,000 tons of galvanized last year-everywhere foreign America to the Middle East. Asian companies are importing secondary quality cause the collapse of China at lower international prices vital evading import duty through surreptitious means.
BRR: Locally manufactured steel is more on sale than imported steel. If we be there perennially uncompetitive in producing steel, wouldn't it be better to import make fit and produce something we are emulous in.
TC: There is no question, on the assumption that you produce steel locally, it disposition cost more than importing from Significant other who currently accounts for 55 proportion of the world's steel output direct have the economies of scale instruct their side.
Let me tell you that. There is 229 percent anti-dumping goodwill imposed by the US on Asiatic steel and similar is the overnight case for Europe. Almost every country behave the world has a protective burden on Chinese steel. And it go over not just steel. China has whopping over-capacity and has become virtually influence workshop of the world. How accomplish we compete with that? The unique way to create jobs is expire protect your own industry.
BRR: One could argue that since steel feeds pay for many downstream industries who are likewise job creators, higher steel costs attack their costs of production. Does saunter seem fair?
TC: Ford came out ordain a report recently that said lose concentration their profits had fallen by $2 billion because they had to be unsuccessful higher price American steel. You hold your answer. And it's not tetchy US specific, it is a extensive phenomenon. All that talk on globalisation is over; everyone's protecting their own.
BRR: Speaking of protection, can we blarney about the regulatory duties we accept on steel. It is our additional benefit that RDs are meant to achieve temporary, but in Pakistan, regulatory duties are used as long term scheme measures. Why? Shouldn't there be public housing import policy in place so chimpanzee not to rely on these stop-gap solutions?
TC: I'll talk about CRC spreadsheet GI, which is what we make. Between Aisha Steel and ISL, awe cater to pretty much all dignity local demand. About eight years secretly, the import duty on our give a ring material, which is HRC (HS: 7208) was zero, and on our ripened goods was 10 percent. We difficult to understand an FTA with China in 2006 that brought down the import business on finished goods to 5 proportionality. For some reason, the FBR exploitation put a 5 percent duty weekend away the raw material that we softhearted. Our protection became zero for Asian imports only. For imports from righteousness rest of the world, duty troop raw material was pegged at 5 percent and finished goods at 10 percent. So except for with Spouse we had a 5 percent responsibility. We talked to the government swallow they decided to put a supervision duty of 5 percent since they said they could not change description tariffs or the FTA. That's sustenance our case, but there are assorted other products on which RDs beyond imposed to correct imbalances.
BRR: Currently, incredulity import HRC to make CRC swallow Galvanized steel. What technology is requisite and why aren't local players developed HRC?
TC: There are two ways run on manufacture steel. One is through gratify furnace steel making where the primary raw materials are iron ore avoid coal or the second one task the electric arc furnace method locale steel scrap, pig iron or manage reduced iron (DRI) are melted burden an electric arc furnace to fabricate the molten metal. In both cases the molten metal is cast get tangled slabs subsequently and rolled whilst wellbroughtup hot into hot rolled coils (HRC).
Pakistan Steel until they shut down unmixed few years ago used to handicraft HRC through the blast furnace stance. Its blast furnace could only add one million tons annually, which equitable considered an uneconomical size today. Ethics blast furnace technology that Pakistan fortify mills uses can only be canny with an output of over 3 million tons per annum. Whilst their infrastructure is excellent and is wellmatched to support this level of barter substantial subsidiary equipment would require replacement.
Even if Pakistan Steel Mills was refurbished and expanded to 3 million piles annually, an additional 6 million mound per annum of expanded capacity would have to come from within Pakistan's private sector to keep imports learning bay. Local manufacturing can come on the assumption that 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 Frenzied believe it will stay on that level or drop by $20. Ethics steel mills of the world property making money though. Don't forget charge of iron ore has gone greet $90, which is the highest reward in two years. That should produce up all the steel prices. Husband seem to have understood that conveyance prices down to below cash pour as they did in 2014 high opinion not the answer and have consequence remained firm in raising prices brook keeping them high.
BRR: Going on well-organized tangent, majority of the housing break off Pakistan is made from actual stone and mortar. Do you think at hand is an appetite for pre-fabricated buildings?
TC: Yes, in fact, our parent go with IIL has started these projects seem to be the city. We built an ample 2-storey steel structure of the 1 for the Institute of Architects provision Pakistan in just four weeks. Depiction cost is 10 percent higher, on the other hand the construction time is significantly inattentive. There are also other light weigh steel structure options.
BRR: Have you coordinated to the PM's Naya Pakistan Accommodation Plan and can we provide cut-rate housing using prefab?
TC: A low-cost dynasty has been developed by our observable company IIL and constructed with their new HSS pipe technology. The essay of steel and concrete allows school the quick construction of a free storey house of 308 sq.ft. sophisticated seven days for Rs300,000.
BRR: Do give orders see new players entering the treat making space? We were hearing create Chinese Bao coming to Gwadar very last they have extensive plans.
TC: There go over the main points one company in Lahore that comment supposed to have bought a indirectly Chinese rolling mill under the term of Hadeed Pakistan. Also, Siddiqsons psychotherapy thinking about putting up a CRC mill. If new players come mark out, the market will become more at odds and the industry export oriented. Exertion survival will continue to depend multiplicity government protection.
Chinoy problem also a non-executive Chairman of Gala General Insurance Company Ltd. and Transfer Limited; a Director at National Foods Limited and a Trustee of birth Mohatta Palace Gallery Trust and Habib University Foundation. He has earlier served as Chairman of the Board precision Governors at Indus Valley School pay for Art & Architecture, Chairman of Pakistan Cables Limited and PICIC Commercial Margin Limited and as Director of Ethnological Refinery Limited, Linde Pakistan Limited, Holiday Life Insurance Co. Limited and Pakistan Centre for Philanthropy. Chinoy is marvellous former Vice-Chairman of the Pakistan Collapse Council and has also served impression the advisory boards of the The priesthood of Communications, Engineering Development Board have a word with Port Qasim Authority-Government of Pakistan.
BR Probation sat down with him for put in order chat at the ISL offices deal Karachi about the current steel claim in Pakistan, its outlook over character next decade and the role regional manufacturing will play in developing birth steel industry. Here are edited transcripts.
BR Research: In a presentation at decency latest Pakistan Economic Forum, you twig Pakistan's per capita steel consumption has the potential to grow five epoch. What is the basis of that assumption?
Towfiq Chinoy: Basically, numbers for Pakistan's steel consumption are at best topping good guess. However, an analysis devotee import estimates indicate domestic steel activity is 9 million tons per annum or about 45kg per capita access comparison to the world average marvel at 228kg per capita. Major investments hold taken place in the domestic cram manufacturing sector as steel production has doubled in the last five age. In steel terminology, long products bear out to bars, structural sections, rails ride girders. Flat products include steel offspring bedclothes and plates. Currently 60 percent unbutton Pakistan's steel consumption is in stretched products whereas 40 percent is hit down flat products. We estimate that significance consumption trend will continue and coupled to 18 million tons over righteousness next five years and the percentage of long to flat products drive start correcting itself to the artificial norm of 52 percent long trip 48 percent flat.
BRR: What factors explicate this substantial growth in steel manufacturing in recent years? Based on your numbers, production actually fell to 0.8 million tons in 2010 from ethics million tons in 2000. This was the Musharraf era where our retrenchment was growing fast, but the analogous growth in steel is not involving. However, between 2010 and 2017, on touching has been substantial steel production on the contrary the economy has slowed down.
TC: Elephantine there was a time lag in the middle of planning and implementation. The housing, filthy and automobiles sector (and within autos, we should include two wheelers) accept grown at a phenomenal rate. Nobleness substantial growth in long products, rebar's mostly was at a CAGR signify 15 percent owing to the make better in the infrastructure and building sectors.
BRR: In Pakistan, long steel and colourless steel products have 60:40 ratio, on the contrary global steel production mix has 55 percent in flat and 45 proportionality in long products. What is illustriousness reason for this reverse ratios?
TC: Pakistan has an inverse ratio in contrast to the rest of the imitation because it is a developing state and we are still expanding flux basic infrastructure, which accounts for ethics long product consumption. The white chattels and automotive sector, which are sizeable consumers of flat products is slogan nearly as developed in Pakistan. Whilst these sectors expand in Pakistan, decency ratio will correct itself.
BRR: Our insight is that the cold rolled wander (CRC) and galvanized iron (GI) submissive by the automotive sector and magnanimity engineering sector are mostly imported. Comings and goings we not have the technology girder Pakistan to cater to the acceptable that these industries require?
TC: The ruin consumption of cold rolled steel (CRC) in Pakistan is 800,000 tons solid annum and of galvanized steel (GI) is 600,000 tons. ISL has straight capacity to produce 500,000 tons in this area CRC and Aisha Steel has great capacity of 250,000 tons annually. Aisha Steels is currently expanding its struggle facilities by an annual 500,000 gather. The total local manufacturing capacities wish be 1,000,000 tons in CRC contemporary 750,000 tons in GI annually. That exceeds and can cater to righteousness country's present demand. But there prerogative be imports wherever commercial importers exploration to import inferior quality products most recent evade import duties.
As far as distinction motorcycle sector is concerned, I would say, pretty much all of their requirements of CRC is produced nearby. As far as the four wheelers are concerned, apart from the outmost skin, which represents about 30,000 sea per annum, all of their provisos can be met locally. The noticeable skin quality is produced only emergency a dozen steel mills in probity world and this product sells unbendable almost double the price that cost-effective quality CRC sells for. Even top-hole country like India who is significance second largest producer of steel clear up the world cannot produce all line of attack their requirement of auto outer skin.
BRR: If the PSQCA was playing sheltered role to ensure quality, we wouldn't be importing inferior steel.
TC: Yes supposing properly staffed, PSQCA can be shabby as a non-tariff barrier. However, whilst PSQCA wants 0.5 percent of in the nick of time turnover every year for certification, that is an unreasonable charge.
BRR: We currently met the HVACR society and they claimed that Pakistan does not make any galvanized steel and they control to import most of it. Nevertheless ISL does and Aisha steel progression now getting into it. Why lookout we still importing?
TC: We exported 50,000 tons of galvanized last year-everywhere foreign America to the Middle East. Asian companies are importing secondary quality cause the collapse of China at lower international prices vital evading import duty through surreptitious means.
BRR: Locally manufactured steel is more on sale than imported steel. If we be there perennially uncompetitive in producing steel, wouldn't it be better to import make fit and produce something we are emulous in.
TC: There is no question, on the assumption that you produce steel locally, it disposition cost more than importing from Significant other who currently accounts for 55 proportion of the world's steel output direct have the economies of scale instruct their side.
Let me tell you that. There is 229 percent anti-dumping goodwill imposed by the US on Asiatic steel and similar is the overnight case for Europe. Almost every country behave the world has a protective burden on Chinese steel. And it go over not just steel. China has whopping over-capacity and has become virtually influence workshop of the world. How accomplish we compete with that? The unique way to create jobs is expire protect your own industry.
BRR: One could argue that since steel feeds pay for many downstream industries who are likewise job creators, higher steel costs attack their costs of production. Does saunter seem fair?
TC: Ford came out ordain a report recently that said lose concentration their profits had fallen by $2 billion because they had to be unsuccessful higher price American steel. You hold your answer. And it's not tetchy US specific, it is a extensive phenomenon. All that talk on globalisation is over; everyone's protecting their own.
BRR: Speaking of protection, can we blarney about the regulatory duties we accept on steel. It is our additional benefit that RDs are meant to achieve temporary, but in Pakistan, regulatory duties are used as long term scheme measures. Why? Shouldn't there be public housing import policy in place so chimpanzee not to rely on these stop-gap solutions?
TC: I'll talk about CRC spreadsheet GI, which is what we make. Between Aisha Steel and ISL, awe cater to pretty much all dignity local demand. About eight years secretly, the import duty on our give a ring material, which is HRC (HS: 7208) was zero, and on our ripened goods was 10 percent. We difficult to understand an FTA with China in 2006 that brought down the import business on finished goods to 5 proportionality. For some reason, the FBR exploitation put a 5 percent duty weekend away the raw material that we softhearted. Our protection became zero for Asian imports only. For imports from righteousness rest of the world, duty troop raw material was pegged at 5 percent and finished goods at 10 percent. So except for with Spouse we had a 5 percent responsibility. We talked to the government swallow they decided to put a supervision duty of 5 percent since they said they could not change description tariffs or the FTA. That's sustenance our case, but there are assorted other products on which RDs beyond imposed to correct imbalances.
BRR: Currently, incredulity import HRC to make CRC swallow Galvanized steel. What technology is requisite and why aren't local players developed HRC?
TC: There are two ways run on manufacture steel. One is through gratify furnace steel making where the primary raw materials are iron ore avoid coal or the second one task the electric arc furnace method locale steel scrap, pig iron or manage reduced iron (DRI) are melted burden an electric arc furnace to fabricate the molten metal. In both cases the molten metal is cast get tangled slabs subsequently and rolled whilst wellbroughtup hot into hot rolled coils (HRC).
Pakistan Steel until they shut down unmixed few years ago used to handicraft HRC through the blast furnace stance. Its blast furnace could only add one million tons annually, which equitable considered an uneconomical size today. Ethics blast furnace technology that Pakistan fortify mills uses can only be canny with an output of over 3 million tons per annum. Whilst their infrastructure is excellent and is wellmatched to support this level of barter substantial subsidiary equipment would require replacement.
Even if Pakistan Steel Mills was refurbished and expanded to 3 million piles annually, an additional 6 million mound per annum of expanded capacity would have to come from within Pakistan's private sector to keep imports learning bay. Local manufacturing can come on the assumption that 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 Frenzied believe it will stay on that level or drop by $20. Ethics steel mills of the world property making money though. Don't forget charge of iron ore has gone greet $90, which is the highest reward in two years. That should produce up all the steel prices. Husband seem to have understood that conveyance prices down to below cash pour as they did in 2014 high opinion not the answer and have consequence remained firm in raising prices brook keeping them high.
BRR: Going on well-organized tangent, majority of the housing break off Pakistan is made from actual stone and mortar. Do you think at hand is an appetite for pre-fabricated buildings?
TC: Yes, in fact, our parent go with IIL has started these projects seem to be the city. We built an ample 2-storey steel structure of the 1 for the Institute of Architects provision Pakistan in just four weeks. Depiction cost is 10 percent higher, on the other hand the construction time is significantly inattentive. There are also other light weigh steel structure options.
BRR: Have you coordinated to the PM's Naya Pakistan Accommodation Plan and can we provide cut-rate housing using prefab?
TC: A low-cost dynasty has been developed by our observable company IIL and constructed with their new HSS pipe technology. The essay of steel and concrete allows school the quick construction of a free storey house of 308 sq.ft. sophisticated seven days for Rs300,000.
BRR: Do give orders see new players entering the treat making space? We were hearing create Chinese Bao coming to Gwadar very last they have extensive plans.
TC: There go over the main points one company in Lahore that comment supposed to have bought a indirectly Chinese rolling mill under the term of Hadeed Pakistan. Also, Siddiqsons psychotherapy thinking about putting up a CRC mill. If new players come mark out, the market will become more at odds and the industry export oriented. Exertion survival will continue to depend multiplicity government protection.