Crescent Steel may add one more furnace to increase melting capacity

March 17, 2022 (MLN): Crescent Steel & Allied Products Limited (PSX: CSAP) may add one more furnace to increase the melting capacity, the management of the company informed during its latest corporate briefing session.

Within two to three-year time the company has a view for forward integration of adding re-rolling mill depending on the economic situation and upcoming business demand and supply dynamic in future, briefing takeaways covered by Darson Securities noted.

Hadeed Billet Division operates a state of the art melt shop with two induction furnaces with an annual production capacity of 85,000 metric tons of steel billets with different sizes start from 100mn to 150mm and a stander length of 6 meters.

The total power requirement for this segment is 11MW billet production slows down due to lack of grid connection but they are in process and soon they will get the connection and be able to utilize their own capacity throughout the year.

In addition, the company has a few different projects that are around 30,000 metric tons steel requirement has been purpose in last 2–3 years but yet to be executed. Due to energy crises, the pressure has been built on the execution of these projects and currently are in the final stage of ordering/tendering.

The management of the company also discussed the K-IV project, also known as the Greater Karachi Water Supply Scheme. The project is roughly 209 kilometres with a steel requirement of 158,000 metric tons with 84-inch inch pipe.

CSAP has a capacity to manufacture pipes with a range of 8’’–120’’ diameter with a thickness between 4mm to 25mm whereas the capacity to produce (based on a single shift) up to 66,667 tons annually, it added.

During the period, the company was able to sell these products with American Petroleum Institute (API) monogram along with this they are the leader in Pakistan for large diameter Submerged Arc Welded Helical steel pipes.

Apprising investors pertaining to the financial performance, the management stated that net profits of the company for the half-year ended on December 31, 2021, stood at Rs932 million (EPS: PKR12.01) as compared to Rs172mn in 1HFY21.

Along with the steel segment, CSAP has a diversified business in textiles and spinning, capital markets and power.

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