Pakistan Steel

AN INTERNSHIP ON PAKISTAN STEEL

THE ISLAMIA UNIVERSITY BAHAWALPUR 1


P R E F A C E

The good name and fame associated with business graduates are attributed to the food high level of studies, both inside the classroom and in practical field environment. This aspect has made them prominent among other students. The students of business administration are not restricted to the bookish neither teaching nor they are required to become cramming parrots. They are made to observe how theory is transformed into practical and how bookish principal is applied to different situations. Our department faculty believes the saying “practice makes a man perfect”. It immense pleasure for me to compile a comprehensive report on the historical view. Establishment, objectives, financial analysis and ratio analysis of the big giant industry Pakistan Steel mills During MBA program, every student is provided opportunity for internship I variety of trading, manufacturing, social and service organizations.

I feel it privileges that my internship in-change and placement selected for me internship in the Pakistan Steel. For completion of my internship I stayed at head office of the company in Karachi. I made studies on different department of the organization. I conducted the financial and ration analysis of the organization of last five years. Company Staff cooperation with me was appreciable. They provided me all relevant information that helps me to complete the report successfully. I also study that how the different sections perform their activities. During my study I saw that the organization is making immense activities to meet the steel requirements of the country and to make good environment of competition in steel sector. The company has renders all type of services to satisfy its customers. I am not hesitating to say that I really learned a lot about the company during my assignment as internee.



Acknowledgement

I am very thankful from the core of my heart to honorable

chairman Pakistan steel Mr. Mueen Aftab Sheikh for providing me

opportunity for training and who’s intelligent, wise and sound

leadership has converted manpower in to wining combination by this

industry into a gold mine.

I wish to express my deep gratefulness to Qaisar Saleem PEO

(HRD) for his consideration and supervision. It was a memorable time

in Pakistan Steel due to his kind concern. I am also thankful to Mr.

NISAR A KHOWAJA/incharge HRD and Mr. YOUSAF AYOUB for his

precious advice and for the great encouragement and cooperation,

because of which I have successfully completed my internship

training at Pakistan Steel where I learned a lot.

Serial # Description Page #

01 Executive Summary 05

02 Introduction 06



03 History 07

04 Vision and mission 09

05 Objectives 10

06 Quality 11

07 Departments visited 12

08 Administration and Personnel 13

09 Industrial Relations Department 16

10 Marketing Department 19

11 Finance Department 23

12 Accounts Department 27

13 Purchase Department 29

14 Conclusion 31

15 Suggestions 32

TABLE OF CONTENTS



EXECUTIVE SUMMARY



Prior to detailed description, I am stating the summary of internship report. Basic purpose behind this is to give a clear view of the report and about the efforts that have been taken to complete the program. I were assigned Pakistan Steel to work there as internee for the practical exposure. My job was started from june17, 2009 to July28 2009 with aim to study each and every aspect of organizational setup departmental working and the working process and the documentation proceed by the giant organization. The multibillion-rupee project of Pakistan steel is not only fulfilling the steel requirements of the country but also offering different training programs to its employees but also the students from different universities of different subjects. I being the student MBA was deputed in Administration and personnel, Marketing, Audit, Industrial relation, Law, Finance and Account to observe the functioning of these departments.

The report in hand consists of my six weeks experience during internship. The report starts with introduction of the organization, which covers detailed history and background, production capacity and products downstream industry, organizational structure and some other important aspects. After there are functions performed by different departments working in the organization. Financial statements and financial analysis of Pakistan steel is also an important component, which reflect the performance of the organization.

As we all are aware that development and growth of any country is largely dependent upon the iron and steel industry. So the improvements and development of that industry is of much importance for any country and especially the developing countries like Pakistan. Pakistan steel is working well in less resource but due to our political structure is disturbing the strategies of Pakistan steel. Pakistan steel has a great beneficial effect on national economy. It has instrumental in creating new job opportunities. It is the base for downstream industry in the country. The Pakistan steel re cognize the staff welfare and gives it due importance as well. It has arranged the residence for its employees and introducing the new scheme for their welfare.

INTRODUCTION

The engineering goods industry is recognized world over as most critical for the development of a self reliant and vibrant economy. This industry, however, depends heavily on basic metals, especially Iron & Steel as resource inputs. The Iron & Steel industry, therefore holds the key for sustained growth of the engineering sector and hence for development of the economy as a whole.



As such the steel industry can be termed as “Mother industry” to all modern industries, being the basic source of metal for them. In this, prospective the importance of national assets such as Pakistan Steel which is determined on their strength and ability to sustain the national growth rate, need not to emphasized. Abundant steel sufficient power adequate transports are otherwise industrialization of developing countries today.

The construction of Pakistan steel was started from 1973 and completed at a cost of 24700million rupees. Pakistan Steel today is the biggest industrial undertaking having production of 1.1 million tons of steel. The management of Pakistan steel has taken serious decision to restructuring of Pakistan steel mills for increasing their savings. To serve they announced V.R.F to their employees. They do this because they want to reduce the strength of employees who are now at the end of their fobs. Pakistan now and all the time is the industry that can provide millions of rupees per month but by good way. So through new way they not only reduced production cost but also can increase the savings.

Located some 40 kilometers to the East of Karachi, Pakistan Steel and its related facilities are spread over an area of 18,600 acres, or about 29square miles. The construction of complex involved the use of 1.29 cubic meters of concrete, 330,000 tonnes of machinery, stee structure and electrical equipment, and the employment of over 40,000 workers at the peak of construction.

In January 1971 the government of Pakistan and USSR signed an agreement, the latter undertaking to provide technological and financial assistance for the construction of a coastal based integrated steel complex. The total capital cost ot project is estimated at about Rs. 1407 billion.

Designed to yield an annual production capacity of 1.1 million tones of steel, the Pakistan steel which was the outcome of collaboration between former USSR, and Pakistan signed a historic agreement under the terms of which the former agreed to provide techno financial assistance for the construction of a coastal based integrated steel complex.

It took some time for a follow-up action after the signing of the agreement that did not come up till 1976. but once the spade work had taken shape, the auxiliary work was completed in record time.

The first coke oven battery was commissioned in April, 1981, the Billet Mill in October, 1982,, the tow converters, one bloom caster and two slab casters of steel making plant between December, 1982 and November 1983 the hot strip mill in December 83, the second blast furnace in August 84, the cold rolling mill in December 84, and the Galvanizing unit in August85 another unit, Billet caster was added in November 1989.



For a person of modest qualification in earth science, computer, electronics and metallurgy it is not easy to understand the complex nature of the function of the Pakistan steel. One has to be an in-person, totally absorbed with the process of the mill to understand the complexities of the job. And for some valid reason, in more than one ways, the Pakistan Steel is a next century venture that is being constantly modernized to keep steps ahead of its time.

Some of the main products of Pakistan steel are coke(215000 tones per year) cast billets (135000tonnes per year) rolled billets (260000 tones per year) pig iron (135000 tons) hot rolled sheets/coils (445,000 tones per year) cold rolled sheets (90000tonnes per year) galvanized sheets/coil (100,000tonnes per year) and formed section (120000tonnes per year).

Since Pakistan steel is based on imported raw materials, a special jetty has been commissioned by the port Muhammad Bin Qasim Authority for Pakistan steel. All imported raw material, viz. iron ore, coking coal and manganese, is transported to the main plant 4.3 kilometers away through a conveyor belt. The same job if done through conventional methods would have taken hundreds of trucks and many thousands of man-hours. For unloading of the4 raw material from ships, two unloaders of 1000 tones an hour capacity each has been installed at the jetty by Pakistan Steel.

The multi-billion rupee Pakistan steel has opened a new vista of opportunities for a long line of dealers, sub dealers and agents who operate as outlets of Pakistan steel throughout the country.

A number of the products of Pakistan Steel have sprung up in its vicinity and in many parts of the country.

Abundant steel, sufficient power and adequate transport are absolute necessities for rapid industrialization of developing countries. If one desires to find out what Pakistan steel or for that matter Tarbela Dam, has done for country, one will have to venture back into time, into the early 70s when Pakistan steel was only a sketch on the drawing board.

It took Pakistan steel just a couple of year to overcome the teething problems. Its recently improved qualitative performance is now a matter serious discussion beyond Pakistan. The quality durability and fineness of its wide range of products has been acknowledged in the region, so much so that the production of the mill has been soaring at a rapid rate, achieving 100% level successively in March, April and May, 1996.



HISTORY

After independence in 1947, it did not take long for Pakistan to would be impossible without the possession of a self reliant iron and steel making plant. The dependence on imports would cause serious setbacks to the country along with an extortionately high import bill which would be impossible to support.

The initial idea for a domestic iron and steel mill was put forward in the first five year plan of Pakistan (1955 - 1960). Debates over the manufacturing process, supply sources of the requisite machinery and raw materials, plant site, domestic ore versus imported ore, ownership pattern, product mix and above all foreign financing credit kept the project on hold for a considerable time.

In 1968 besides other factors, it was considered by the Government of Pakistan that a basic steel industry should be established in the public sector, as public sponsorship of the project would enable integrated development of the steel industry in the country. In light of this, the government decided that the Karachi Steel Project should be sponsored in the public sector for which a separate Corporation under the Companies Act be formed. As a result on the 2nd of July, 1968 Pakistan Steel Mills Corporation was setup as a private limited company in the public sector in accordance to the Companies Act of 1913, with the objective to establish and run steel mills at Karachi and other places in Pakistan.

In January, 1969, Pakistan Steel concluded an agreement with V/O Tiajproexport of the then USSR for the preparation of a feasibility report into the establishment of a steel mill at Karachi. Subsequently in January, 1971 Pakistan and the USSR signed an agreement under which the latter agreed to provide



techno-financial assistance for the construction of a coastal based integrated steel mill at Karachi.

The foundation stone for this gigantic project was laid on the 30th of December, 1973 by the then Prime Minister Mr. Zulfiqar Ali Bhutto. The mammoth construction and erection work of the integrated steel mill, never experienced before in the country, was carried out by a consortium of Pakistani construction companies under the supervision of Soviet experts.

................................................................ Pakistan Steel did not only have to construct the main production units but

a host of infrastructure facilities involving unprecedented volumes of work and expertise. Component units of the steel mill numbering over twenty and each a big enough factory in its own right were commissioned as they were completed between April, 1981 to August, 1985 with the Coke Ovens and By Products Plant coming online first and the Galvanizing Unit last. Commissioning of Blast Furnace Number 1 on the 14th of August, 1981 marked Pakistan's entry into the elite club of iron and steel producing nations. The project was completed at a capital cost of Rs. 24,700 million. The completion of the steel mill was formally launched by General Zia-Ul-Haq the then President of Pakistan on the 15th of January 1985.

Today Pakistan Steel is the country's largest industrial undertaking having a production capacity of 1.1 million tones of steel. The enormous dimensions of the project can be visualized from the construction inputs which involved the use of 1.29 million cubic meters of concrete, 5.70 million cubic meters of earth work (second to Tarbela Dam), 330,000 tones of machinery, steel structures and electrical equipment. It’s unloading and conveyor system at Port Qasim is the third largest in the world and its industrial water reservoir with a capacity of 110 million gallons per day is the largest in Asia. A 2.5km long sea water channel



connects the sea water circulation system to the plant site with a consumption of 216 million gallons of sea water per day.

Pakistan Steel did not only have to construct the main production units but a host of infrastructure facilities involving unprecedented volumes of work and expertise. Component units of the steel mill numbering over twenty and each a gig enough factory in its own right were commissioned as they were completed between 1981 to 1985 with coke oven and By product plant coming on stream the first and the Galvanizing unit the last. Commissioning of blast furnace No. 1 on 14 august 1981 marked Pakistan’s entry into the elite club of iron and steel producing nations. The project was completed at a capital cost of Rs. 24700 million. The completion of the Steel Mills was formally launched by the president of Pakistan on 15 January 1985. Pakistan Steel today is the country’s largest industrial under-taking having production capacity of 1.1 million tones of steel.

The above figures illustrate the massive civil works, intricate erections, installations of sophisticated electrical and mechanical equipment. With the completion of Pakistan Steel, the local contractors gained the technical ability till then unknown, which they utilized later to undertake million dollar projects both within the country and abroad especially the Middle East.



Our vision

To become a leading steel company in south Asia committed to serving stake holders by offering quality products through an innovative and cost effective manner in accordance to environmentally friendly conditions.

Our Mission

Pakistan Steel is committed to be a leadering steel industry by:

1 Greater response to customer's present & future needs.

2 Focus on productivity and Quality.

3 Facing Challenges of free Market Economy.

4 Ensuring higher rate of return on invested capital.

5Developing Human resource and motivating employees’ .through .empowerment and hard consequences.

6 Safe Working and Environment friendly conditions.

7 Minimizing process wastages, rejections and recycling .wastes.

8 Good Governance.

9 Fulfilling Social Obligations.

10 Improving Corporate Image.



OBJECTIVES

1. Development of corporate culture and good governance characterized by

participation, consensus, orientation, accountable accountancy,

responsiveness, effectiveness, and efficient observance of rules of law.

2. Keeping a constant eye on bottom lone to maximize profit and race.

3. Acquiring and employing technology through research and development for

increasing productivity and quality to reach DPR levels in 3 to 5 years.

4. Aiming at TQM system by 2010 by making quality.

5. Ensuring cost competitiveness by offering 1% annual investment I yield

wherever required.

6. 10% annual reduction of inventory till achieving level of 4-6 weak productions.

7. ISO certification by December 2002.

8. Orientation and commitment of employees to the mission by 2002.

9. Promoting indignation by facilitating use of 5% raw material by 2003.

10.10% increase in recycling of wastes by 2003.

11.Eliminate goods in transit by following better procurement policies by 2003.

12.Attaining designed values of consumptions of utilities by December 2003.

13. Introduction of next level of automation by 2005.

14.Diversification of product mix through BMR by 2006.

15.Phase wise expansion up to 3.0 million tones of raw steel by 2012



LOCATION AND SITE

PAKISTAN STEEL is located at a distance of 40km South East of Karachi at Bin Qasim in close vicinity of Port Muhammad Bin Qasim. It was found to be an ecologically preferable location, alongside a tidal creek and having wind direction away from the city of Karachi. PAKISTAN STEEL is spread over an area of 18,660 acres (about 29 squares miles) including 10,390 acres for the main plant, 8070 acres for township and 200 acres for 110 MG water reservoir. In addition it has leasehold rights over an area of 7520 acres for the quarries of limestone and dolomite in Makli and Jhimpir areas of district Thatta.

EMPLOYMENT OPPORTUNITYPAKISTAN STEEL provides employment to more than 14,500 person on regular

basis whereas about 3000 daily wage workers and retainers are engaged on

piece job basis including capital repair and emergency works etc, at different

complex of PAKISTAN STEEL. During the construction phase about 40,000

persons were engaged. With the establishment of down stream project about

25,000 persons were provided job opportunities while an equal number of

persons obtained employment indirectly.



QUALITY

We at Pak Steel, strictly adhere to the ASTM and BSI international

standards. For this purpose we have established most modern laboratories to

maintain the highest quality precision standard. The perfection of our work has

captured the sharp eyes of discerning clients, in the public and private sector

including some of the top multinational construction firms. To produce high

quality steel according to the requires specification, Pak Steel is equipped with

both chemical and physical laboratories at our site in Islamabad. Prime Quality

M.S billets are processed through semi-automatic re-rolling plants, which are

designed to manufacture standardized products of exact and international

specifications; special attention is paid to the custom requirements instruction of

each particular client. Various holding concerns of this group, led by M.S Pak

Steel Re-Rolling Mills are prominently known for quality and dependable

manufacturer of steel products like: Mild Steel Round – Plain Bars, Deformed

Bars, Square bars, and High Tensile Cold Twisted Bars, Angles, T-Iron,

Channel, Flat and other sections. Beside these we have potential to meet special

requirements of our customers.

The melting plant used for casting & ingot manufacture, is a high

frequency, totally computerized electric furnace, manufactured by world re-

owned “Inductotherm” U.S.A. However, our main source remains prime quality

billets manufactured by Pakistan Steel Mills Corporation, Karachi and Heavy

Mechanical Complex, Texila.



Pak Steel is the first steel industry in the region to operate Cooling Beds in its

factory, thus ensuring precision and quality in the finished product. This

enhanced technological feature guarantees the optimum straight, shaft like finish

of our products. Similar unique innovations & automation in the manufacturing

process enable us a present production capacity of 45,000 MT per year. Adding

additional shifts may increase thin.

DEPARTMENTS VISITED

Industrial Relations Department



Administration and personnel

Marketing Department

Purchase Department

Accounts department

Finance department

Numbers of Main Products List of By Products

1. Pig Iron. 1. Oxygen

2. Billets products. 2. Tar Cool

3. Galvanized products. 3. Granulated Slag

4. Hot rolled products. 4. Boulder Slag

5. Cold rolled products 5. Refractory Bricks

6. Coke 6. AMMONIUM

SULPHATE

7. Formed Section 7. Nitrogen

Administration and personnel department is responsible for overall

administrative and personnel matters in accordance with the policies, rules



and regulations including welfare of employees. The following are the

various section of A & P Department.

A. Personnel ‘A’ Section:

This section deals with maintenance of personal files of all officers

from deputy Manager to general managers grade including the personal

files of the officers of those departments who have not been delegated the

administrative powers, issuance of NOCs / Leave enhancement /

Coverage of insurance claims, etc.

B. Personnel ‘B’ Section:

This section deals with maintenance of personal files of employees

in workers from pay group-I to pay group-V and of those departments who

are not having admin. Powers. All others functions are same like the

section ‘A’.

C. Leave and complaint Section:

This section deals with maintenance of leave records of all the

officers and issues leave advices of the officers from the level of

managers to deputy general managers grade including of those

departments who have not been given authority. Also deals the files of

employees posted in A&P department and coordinates with FIA with

regard to different corruption cases under investigation and to computerize

the data statements in this connection.

D. P & C Section:

Policy and Coordination section is the main part of A&P department

where policies and rules and regulations of officers & workers including

DPC promotion list are maintained. All management policies are

implemented in Pakistan steel through this section. It also deals with top

management cases as well as routine matters.

E. Establishment Section:



This section deals with issuance of sanctioned strength of the

departments complexes and maintains up to date organizational charts,

transfer, posting of employees according to the manpower requirements.

Grant of house building, house purchase conveyance loans. This section

also deals with outside agencies like national assembly questions senate

questions correspondence with ministry president of Pakistan.

F. ACR Section:

This section is the custodian of the ACRs of the officers with

declaration of assets submitted by them during the year. Also

communicates the adverse remarks endorsed by the reporting officers to

the concerned employees.

G. Enquiry Cell:

Enquiry cell deals with initiating necessary disciplinary actions

against the officers involved in misconduct corruption cases, carrying out

investigation and examination of enquiry reports of the completion of

disciplinary cases as per Pakistan steel officers service rules and

regulations.

H. Dues Settlement and Verification Cell:

This cell is established to facilitate the ex-employees as well as

dependents of deceased employees for settlement of their final dues

through accounts departments / provident fund gratuity fund.

I. EOBI Section:

This section deals with extending EOBI coverage to our entitled ex-

employees and payments of monthly EOBI contribution to concerned

authorities.

J. Reprographic Center:

Reporting center arranges all types of printing for Pakistan steel. It

also arranges printing of Al-Hadeed Khabarnama as and when required.



Quality Policy of Administration & Personnel

Administration and Personnel department commits to: Manage and care the employees for better productivity, organizational

growth. Appropriate staffing according to work requirements. Maintain quality of work life. Strive for corporate culture improvement.

The general function of industrial relations department is to create healthy and harmonious relationship between the management and employees to maintain industrial peace. I.R department is basically Welfare department, which has been administratively divided into six sections. Each section is performing its functions very well.

1. Trade Union:



Its specific function is to deal with the trade union and associations working in Pakistan Steel. This section conducts union referendums and negotiates with CBA on CBA charter of demand. There are 12 registered trade unions and 03 officers associations functioning in Pakistan Steel. Now a days PPP Pakistan peoples party’s recommended party PEOPLES WORKER UNION in power. After 12 years a referendum held in Pakistan steel in which PWU gets 4700 votes out of 5100. According to law if a party not get one third votes in referendum it will be freeze so all other parties are freeze now days and only one party is in working and that party win the hearts of workers a charter approved by Pak steel is only for workers welfare after the approval of that charter even some officers are getting less or equal salaries than workers.

2. Compensation:

This section deals with group insurance, workers compensation and workers welfare loan cases. During last 06 months 15 deaths 10 accidents and 1773 loans and hire purchase from Pak steel were deals with. Further Rs 70000 is given to worker on the wedding of his daughter from Pak steel which is allowed twice in his service. More Pakistan steel offer the scholarships for the sons of workers which is Class AmountIntermediate 12000/yearGraduation 18000/yearPost Graduate 24000 /year02 Uniform, two pars of Shoes a set of books and school bag is also provided by Pakistan Steel. A sewing machine is also gifted to worker once in his experience.

3. Welfare Section:

This section has 05 SubsectionsA. Catering

It is obligatory to provide canteens facility to the employees at their working places. The employees are provided food on subsidized rate which is one sixth Pakistan Steel has established 19 canteens at different complexes keeping in view requirement of the employees and Rs 1300 laces are recommended annually for this purpose.

B. Welfare loanRs 60000 are given to workers as a loan only on the basis of

his identity card of Pakistan steel which is deducted from their salaries in 60 equal installments without any interest.

C. Hire purchase



House appliances are also offered to employees on installments basis. Pak steel sign contracts with different dealers and shopkeepers to provide the facility of hire purchase to workers at minimum interest rate. For example 0% interest for 06monts 04% 12months 08% more than 12months.

D. Public LibraryA public library under IR has been established in steel town

for the employees residing in steel town and Gulshan e Hadeed. There are 3000 books in that library.

E. Workers CampsWorkers camp is consists of 31 barracks and each barrack is

consists of 4 rooms. Total accommodation is 700 beds.

04: Administration Section

This section deals with overall administration of IR. Department. Imprested account is also dealt with this section.

05: Religious Affairs Section

It is functioning under Chairman Communication. The employee’s contribution is in the form of mosque funds. Rs.100 by officers and Rs 50 by the workers every month. All religious affairs are dealt with mosque committee. It is consists of 04 members of CBA and 04 members of administration. It deals with the following matters.

Arrangements of religious functions Repairs and maintenance of 30 mosques. Annually procurement of mosques items. Arrangements of Taravih, Eid prayers.



SIMPLIFICATION OF PORCEDURE

The function of Marketing Department is to optimize the sale revenue in order to achieve the organizational objectives by adopting affective Marketing system to sell Pakistan steel main products and by-products at the best achievable competitive prices.

To achieve targeted sales directed towards attaining organizational objectives, a board based sales policy is adopted which provides the guideline for the Marketing department as well as the customers. The sales policy, by implementing the standard terms and conditions of sales contracts safeguards the interests of Pakistan steel as well as its customers in a balanced way. Customers i.e. traders and consumers (especially industrial consumers) play a pivotal role in the sale of Pakistan steel products.

PREPARATION OF SALES POLICY

The sales policy of Pakistan Steel is prepared with immense care and vigor on the basis of past experience and achievements keeping in view the customers demand and market conditions. It reflects the plus points of the previous Sales policies and maturity of policy makers. Sales policy is the result of hectic efforts of marketing personnel who carryout in depth survey/study of the market and keep vigilant eyes on the changing domestic as well as international Iron & Steel markets. While making the sales policy, due care is taken to the future need of Pakistan Steel and its relations with its customers.



Sales policy is placed before the Price Fixation and implemented after due approval.

PRICING The prices of Pakistan steel products are fixed by a price Fixation/review

committee comprising: Chairman Director (Finance) Director (Marketing)

Since the production of Pakistan steel products are based on imported raw materials, the prices are subject to change without notice. While reviewing the prices of products, following factors are taking into consideration:

Market conditions Market Acceptance Protection against imports Competitors Landed cost of imported materials Government fiscal policies Production & Quality range Cost of production

DEALERSHIP SECTION

This section is assigned following jobs:i. Entertain various dealership applications.ii. Point out deficiencies in respect of each application.iii. Prepare the summary of case for the approval of GM/in charge (Sale),

Director (Marketing) and the Chairman.iv. Maintain close liaison with Sales Accounts department for the issuance of

official receipts of security amount received on account of dealership.v. Liaise with PSPS Department for obtaining the final clearance of any

dealer, who at any time request for cancellation of his dealership.vi. Coordination with various Zonal Sales Offices fro refund of Security

deposit in respect of dealers.vii. Maintain up-to-date record of Traders & consumers/Dealers (Zone wise).

Reply the queries received from customers, Government agencies Internal and External Auditors and Ministry of Industries and Production.



DATA COORDINATION SECTION

This section perform the following functions

i. Maintain up-to-date record of computerized stocks of weighted and outweighed

ii. Maintain up-to-date record of commercial dispatches of Pakistan Steel products

iii. Prepare NORs for Zonal Sales Offices, after getting request for issuance of NORs from respective product in charge.

iv. Maintain the price history of Pakistan Steel products.v. Maintain up-to-date zone wise dealership list.

ON-LINE COMPUTER SALES

The Zonal Sales Offices, organized on modern lines using computer Facilities to promote Sales, provide one window operation to Customers.

Available computer facilities have been utilized to develop “ON-LINE COMPUTER SYSTEM” for the Production and Marketing & Sales activities.

The existing System has been made to work trouble free in the next millennium.

ADMINISTRATION SECTION

This section is responsible for overall administrative functions of marketing department and to perform following jobs:

i. Maintain the personal files in respect of officers, Staff, Retainer and Daily wage Workers.

ii. Prepare the daily attendance.iii. Prepare the monthly attendance of Officers Staff, Retainers and Daily

wage Workers.iv. Liaise with Central administration in connection with issue of leave advice

leave balance and other administrative matters.v. Look after the general maintenance of sale department i.e. Lighting,

Electric Fans, Air conditioners, White wash, Fixture and Fitting etc.vi. Preparation of annual departmental budget including Zonal Sales Offices.vii. Take care, of the stationary requirement of entire Sales department.viii. Receipt and Dispatches of Letters/Dak.ix. Correspondence with other department/Zonal Sales Offices of Pakistan

Steel.



RESEARCH, INTELLIGENCE & REBATE SECTION

This section is responsible to perform the following functions.

Market intelligencei. Study various steel Journals and Newspapers to find out useful

data, information related to Iron and Steel Industries, their gradual development and Marketing strategies.

ii. Determine demand of Iron and Steel products in the domestic as well as international markets and fluctuation of prices thereof.

iii. Find out prospective/new buyers of Iron and Steel products.iv. Keep record of international prices.v. Keep track history of prices of Pakistan steel products.vi. Keep record of domestic prices of Iron & Steel products.vii. Keep record of ITP (Import Trade Price) value.viii. Determination of landed cost of international prices.ix. Submit papers/materials for review meeting.x. Perform any official job assigned from time to time by the GM/ in

charge.

RESEARCH WORK

i. Provide timely and quality information to make timely and fruitful decisions.

ii. To enabling Sales Department to achieve the sales target in line with the general objectives of organization.

iii. Provide information concerning to ways and means to integrate the resources and activities of the organization focusing on the need and wants of customers as well as the organization.

iv. Monitor the needs of the market and anticipate the future demand.v. Formalize systems for acquiring information for providing

assistance in understanding the market place and for the decision making.

vi. Prepare replies to technical inquires from buyers and the Govt. vii. Coordinate with Planning and PP&C department.viii. Prepare replies to the inquires from Down Stream Projects. Prepare

replies to the news clipping related to Sales Department.



Finance is the lifeblood of economy and every business carefully manages its departments to “Raise the funds at lower rates” and “and application of funds to get maximum funds.” The finance department performs following functions.

i. Preparation and control of the budgetii. Mobilization and procurement of funds both in rupees and foreign

exchange. Liaison with commercial banks, banking council, state bank and ministries of productions, industries, finance and economic affairs divisions.

iii. Arrangements of imports, letter of credit and forging remittances.iv. Control on utilization of foreign and local credits and arranging repayments

f loan and payment of markupv. Scrutiny and payments of soviet experts and other consultant’s

remuneration after obtaining S.B.P. approval.vi. Financial scrutiny of estimates, awards, approval and negotiation

whenever directed.vii. Financial scrutiny of all cases after finalization of the purchase proposal

letter of award whenever directed.viii. All financial matters relating to operational activities.ix. All financial matters relating to the purchase both local and foreign.x. Submission of periodical returns to Govt. in respect of foreign loans

utilization.xi. Development and review of procedure for financial and budgetary control.xii. Correspondence with the lead bank in respect of running finance, medium

term loans and participation term loan.xiii. Preparation of complex wise budget and allocation of funds.xiv. Any other exercise connected with finance department from time to time

assigned by the management on the directives of the POI&P/ finance division.

xv. Submission of periodical reports to Govt.

Cash section



Cash section management starts when order for purchase of raw material or other goods is placed and ends when payment is realized from sales. All these activities between these events fall when within the realm of cash management. Cash management is the process whereby the cash inflows and outflows are balanced so that current obligation is met in time and any excess cash is invested to earn income. It also includes ability to obtain credit so that the corporation can have access to cash to finance temporary cash deficits.Rules and Regulations of Cash Section

The function of handling receipts and payments is completely separated under cash section. All transaction of receipts and payments are accounted for in the books by other concerned department.

All disbursement is made by cheques on the instruction of dealing department.

Cheques are signed on the basis of approved invoices and vouchers.

Cheques are counter signed by the person outside cash section. After preparation of cheques supporting documents are endorsed

for this effect. Daily report of receipt, disbursement and balances available in the

banks is prepared. Cumulative receipts and payments for the month are also shown.

BUDGET AND BUDJETARY CONTROL SECTION

This section contains different cells which are performing there duties separately these cells are following.

A. Preparation of budgeti. Consolidation of demands received from all production and service

units of Pakistan steel.ii. Collection, compilation of latest rates of material from concerned

departments iii. Firming up of expenditures based on estimated actual basis.iv. Finalization of foreign exchange requirements.v. Calculation of working capital requirements.vi. Inventory position of raw material, spares, finished goods work in

process.

B. Import cell

i. Establishment of foreign and local letter of credit through nationalized commercial banks.

ii. Scrutiny of purchase orders/ contracts /letters of awards received for establishment of L/C specially its financial approval by competent authority.



iii. Request the ministry of finance for release of foreign exchange on monthly basis against total approved foreign exchange.

iv. Classification of code numbers according to import policyv. Obtaining approval for the opening of L/C from state bank against

the suggested account.vi. Submission of LC opening application from to bank.vii. Checking of LC established by concerned bank.viii. Arranging confirmation of LC from foreign banks.ix. Preparation of cash voucher in respect of opening of LC.

C. Financial Scrutiny Celli. Scrutiny and examination of import cases received daily in finance

department for financial concurrence.ii. The case so scrutinized needs through and active examination of

indent and its approval stock position based on record maintained by our stores.

iii. Participation in tender opening in different departments.iv. Checking of earned money in shape of pay order of bank guarantee

issued by approved banks.v. Participation in meetings regarding prequalification of contractors.vi. Participation of negotiation meeting with the suppliersvii. Checking the authenticity of local agents in case the tenders are on

C&F basis.

Tow types of Budgets are prepared under finance department observation.

Capital Budget. Revenue Budget.

Capital BudgetCapital budget is the necessary one and is made for the

expenditures like, requirement of transport vehicle, Furniture and fixture, office equipment, lab. And medical facilities, fire fighting, equipment, land, plant and machinery, computers and the things like these essential items. This budget is basically made for the expensive items and these are basically development items for any organization.

Revenue BudgetThe revenue budget is made for the routine things that should be

used to run any organization following heads comes under this budget like, purchasing of local raw material, Gas, Electricity, labor salaries and allowances and as well as foreign experts, items of production and related material and services, administrative expenses, advertisement, rent taxes. Traveling expenses, the items directly or indirectly or indirectly related with



production. Expenses on repair of rail, road, building and bridge. Production, sales, cost of sales, profit and loss of each main complex to arrive at the total profit of the organization.

The account department is working under the supervision of Director (finance & Accounts). The accounts section of any organization is called the base point for the provision of data. This department basically works for the preparation of financial statements of the corporation, disbursement of the salary to employees. Payments to suppliers/ contractors/ service provider and cash management. All financial transactions are recorded, summarized and consolidated in accounts department in form of:



A. Journals B. Ledgers C. Trial Balance D. Income statement E. Balance sheetThe department is divided to four sections for its smooth working those are:

1) Final Accounts

The main function of this section as appears from its name is to finalize annual accounts of Pakistan steel. In addition to finalization of annual accounts, monthly and quarterly are also compiled provisionally. However few working groups in this section carry out other functions like maintenance of fixed assets. Annual finalization of accounts is very important because annual audit is based on the accounts for the year. Final account section coordinates with external auditors to complete statuary audit within stipulated time specified by the securities.Following books of accounts are maintained by final account section.

A. General ledgerB. Trial BalanceC. Financial StatementD. Balance SheetE. Cash flow statement

2) Bills Section

This section handle the all payment which are made by the Pakistan steel mill to the contractors, dealers, suppliers, service provider, transportation charges, Hadeed Welfare Foundation, and also for the purchase of Raw material even from inside or outside of the country. All the payments are made by this section.

3) Payroll Section

About 14000 regular 3000 contract and 2500 daily wages employees are working in Pakistan steel. In order to control disbursement of salaries and wages to them a full-fledged section is established. The function of this section is,

Allotment of personal numbers to employees to maintain employees wise database on computers.

Preparation of payroll as per attendance report received from cash department.

Crediting the salaries in the account of employees with banks. Maintenance of employees loan and advances accounts Issuance of instruction to release or stop the salaries. Preparing vouchers for any payment or deduction to and from

employees like final settlement etc.



Deduction if income taxes at source and deposition on govt. treasury.

4) Gratuity and Advances

Maintenance of Pakistan steel gratuity funds trust accounts. Payments of gratuity of officers and staff on their final settlement. Cash management of funds available with gratuity fund trust and audit of accounts.

Advances Release of funds to imprested holders, special advances and adjustments thereof on receipt of accounts. TA/DA advances and reimbursement of officers proceeding on official tour.

Purchase department deals the all functions of purchasing of all material which is need to any department of Pakistan steel for the purpose of production or any other expense which is required by the department. The needy department send the indent to the Material Management Department (MMD) and after approval and necessary requirements they send the demand to



purchase department and than the duty of purchase department is start if the required purchasing is less than one lack than purchasing function is so easy one person go to the market and received three price descriptions and select the lower one for purchasing. On the other hand if the purchasing is more than one lack a proper procedure of tender is adopted.

Purchase department consist on five sections which are named by CP1 to CP5 different types of products are dealt with different CP and also has some other sections i.e. tender and import section is also held in purchase department. All the procedure of purchasing is almost same in all CP’s but products allotted to each Central Purchase are different. Descriptions of all Sections are following.

Central Purchase 01It deals all the electric items which are purchased by the steel mill for any

purpose i.e for plant or establishment.

Central Purchase 02It deals all the Chemical products and vehicle which are need to any

department of Pakistan steel mill

Central Purchase 03It deals for the purchase of hardware and wires, ropes when need.

Central Purchase 04It deals with boring pipes purchasing and central fitting.

Central Purchase 05Petrol, oil and lubricants are purchased under this section.

Spot Purchasing SectionSometimes spare part of plant is needed urgently for which other

documentary is not necessary because it may delay the purchasing and that delay may be loss of unbelievable accident or stop of production etc. So if production plant need any plant material it will be purchase with in twelve hours after the indent.

Purchasing Procedure

First of all needy department sent the indent to MMD and show the requirement of material.

MMD sent the requirement to purchase department. Purchase department allot the number to that case and sent to

news release department for the tender advertisement. They publish this advertisement in minimum tow newspapers as

per government rule. Than purchase distribute the tender form to all wiling parties. Tow types of envelops are required from the bidder person first is

Technical and second is Commercial.



2% Bid Bond Security in shape of security is received with the commercial envelop.

Fist technical offer is opened if the tender is less than ten lack both offers are opened at the same time.

If the rate is too high than last purchase than rate reasonable committee RRC will handle the case in shape of market research and market survey and put the decision about pricing.

When first lowest is selected 2% BBS is returned back to the supplier and 10% Guaranty is required to submit inform of pay order or bank challan to the account of Pakistan Steel’s account.

All the terms and conditions mentioned in tender notice and also in agreement if the supplier supply the material according to agreement than his payment is released and also bank guaranty otherwise payment or guaranty may be stopped.

STRENGTH

1. Pakistan Steel has unloading and conveyers system at port Qasim is the 3rd largest in the world. All the imported raw material, viz, iron core coking coal and manganese is transported to the main plant 3.4 kilometers away through this conveyer’s belt. The conveyer’s belts have a width of 1200mm and a capacity of transporting 1200 tones raw material per hour.

2. Pakistan steel has its own thermal power plant in which a by product coke oven gas is used for generating electricity is the thermal power plant, each having a capacity of 55 megawatts over and beyond its own need Pakistan steel supplies electricity to the KESC.

3. Pakistan steel has its own two energy plant for producing gas liquid oxygen and Nitrogen. Each unit has a daily capacity of 250 tones of Nitrogen oxygen is sold to outside parties when it becomes surplus to requirement of Pakistan steel.



4. Pakistan steel has made arrangement for its scientific quality control test at every stage of production to maintain the high quality of its products.

5. Pakistan steel has Pakistan ‘s largest mainframe computer to keep the record of whole type of data and other in formations of Pakistan Steel.

6. Pakistan Steel has education and research facilities for the students. The institutes of material sciences and research (IMRSR)is preparing expertise and research engineer equipped with sound knowledge.

7. The institute of environment sciences and research (IERSR) is responding for under standing of and certification of ISO 14000 environmental management standards and to meet the future requirement of environment experts. IESSR is the first loading research institute in the country with back up of well equipped research laborites and computer centre.

8. Metallurgical training centre (MTC) is designed to impart training in 64 trades to 1600 students/workers annually relating to mechanized chemical electrical and metallurgical. So for about 10,000 persons have been provided training and skill development services at MTC.

9. the major strength that Pakistan steel has is its leadership chairman of Pakistan steel who with his strong and personal commitment has managed to transform Pakistan steel into a world class company General Abdul Qayyum khan has dedicated him self to development of Pakistan steel which has shown remarkable results under their leadership specially in the field of outstanding sales records significant profits moulding the environment condition and welfare work.

10.Pakistan steel has received ISO 9001 (quality certificate) ISO 14001 (certification of environmental science management system) and SA 8000 (certification for improvement of working condition of and organization)

11.Pakistan steel has a industrial water reservoir with a capacity of 110million gallons per day is the largest concrete reservoir in Asia.

12.The planet’s 2 kilometers long fly over which connect the steel mills the largest when built.

13.Pakistan steel is provided with modern techniques such as dry-quenching of coke, oxygen enrichment of the plants high top pressure and high blast temperature in the blast finance.

14.Apart from the various facilities, utilities and services like water system, steam system gas services , compressed air services, lubricants and fuel oil services, weigh bridge, roads internal railway system and training services are also provided to Pakistan steel.



WEAKNESS

1. Under the previous sale policy the Pakistan steel had been a paradise for the plunders and looters. The steel dealers enjoyed monopoly in lifting the products at their own terms and condition. Misuse of power of Chairman regarding quota, and parchi system had given birth to large number of fake, dishonest and bogus dealers.

2. The major weakness of Pakistan steel is the more administration cost due to the overstaffing and large number of experience employees. The Russians who gave the plant had proposed that PS would require 15000 regular workers during the operational stage. By end 1981 when one coke-oven battery and blast furnace had barely gone into production, the manpower had touched the level of 24,000 regular employees. It is surprise to know that in Pakistan steel the number of officers is more than the number of worker.

3. The demand of Pakistan steels products is ever-increasing but due to its lower capacity of production which 1.1 million ton per year Pakistan steel is fail to fulfill the demand for its products the total demand of steels products in Pakistan is about 4.5 million ton per year and the capacity of Pakistan steel is only 1.1mtpy.

4. The Non-Development charges of Pakistan steel were touching as high as Rs. 1.2 billion per year. It will be interesting to not e that such high amount was spent to produce only 14% of capacity.

5. A large number of vehicles were being misused by unauthorized worker and officers.

6. The standard of the foods in the canteen of workers is not better that resulted in de-motivation of Pakistan steel‘s employees. The main reason is that the contractors of these canteens misuse the subsidies given by top management.



7. Pakistan steel has no efficient research and development department which is key to product innovation and process innovation.

8. Due to no repair and maintenance of equipment and machinery for last many years, there is always danger for the losses of precious lives of employees, which resulted in dissatisfaction in the labor force even in engineers.

9. Capital repair has not been made from last many years, which affect the quality of products and speed of production.

10.Due to no proper maintenance and capital repair of plant, the rate of rejection is increasing.

11.Pakistan steel has highly centralized system of decision making, due to this delay in work does occur. Lengthy procedure and too much documents resulted in delays of many urgent in many urgent policies to implement.

12.PAKISTAN STEEL has stopped the recruitment process for last many years that resulted in no availability of fresh blood. Most of the employees are on the age of retirement and having qualification of graduation level.

13.The focus of Pakistan steel is on cost accounting rather than cost control.14.Too many departments of Pakistan steel contributing very less profit to

Pakistan Steel, as compare to the cost.

Conclusion

During the course of my internship, I found that Pakistan steel was

set up with on objective to achieve a self reliant and vibrant economy. Up to

some extent it has been successfully in achieving this goal. It has highly

beneficial impact on Pakistan’s economy. It has been instrumental in creating

new hob opportunities, promoting advancement its technological know, how

enlargement of wide range and variety of production, opening of new vistas of

technical and economical and economic cooperation internationally and giving

the start of the research and development activities in the field of metallurgy

specifically and in other technological fields.



Pakistan steel has a potential to provide a sound base for

industrialization and can provide stimuli for setting up of down stream industries.

It can also play a significant role in up gradation of technology and acquisition of

new technologies. It is also contributing billions of rupees to govt. of Pakistan by

way duties and taxes, but unfortunately this biggest industrial unit is suffering

from various problems like lake of strategic direction, weak financial position, and

govt. positive attitude towards imports, due capital repair, lake of cost control,

corruption and inefficient use of resources. After overcoming of these problems, it

can make its operations more efficient and take the advantage of expansion

opportunity in order to exploit the future market for iron and steel.

Suggestions

1. Management must be pay attention to the capital repair of plant which

otherwise will prove costly for organization.

2. Old conservative and costly employees should be replaced with young

intelligent, qualified and cheap generation.

3. The persons who are trained from abroad should not to allow taking

VRF at any time.

4. Pakistan steel should free from any political pressure.

5. Proper orientation should be given to the market and sales promotion

activities.



6. There are always need to improve working condition and safety

measures in the production unit.

7. Pakistan steel can increase its profitability and efficiency by promoting

its down stream industries.


Documents

Pakistan Steel