Uzair bin Farid

Large-scale manufacturing (LSM) will never pick up the pace unless it is supported by steel manufacturing and iron-smelting industries, said a renowned expert. In conversation with WealthPK, Dr Adnan Haider, Professor of Economics at the Institute of Business Administration, Karachi, said that the decision of the government to open the letters of credit (LCs) for steel scrap is commendable.

“Steel is used as a raw material in many of the goods that are produced in Pakistan. If steel import is allowed, it will also help in the revival of other industries which are dependent on steel inputs,” he said. Dr Adnan said the industrial revolution was helped in great part by a revolution in the application of iron and steel industry. Iron and steel were the essential raw materials which helped the Western countries develop their industrial base.

“It was iron mines in the French provinces of Alsace and Lorraine that became a subject of competition between France and Germany. Both countries knew that if they had to develop their industrial base on the same lines as Britain’s they will have to establish their own iron and steel industry,” Dr Adnan said.

To establish such an industrial base, it was essential that they have access to iron deposits. Iron and steel industries produce equipment out of iron and steel that is then used in the LSM industry. “Just look at the agricultural equipment used in tilling, sowing, harvesting, cutting, threshing and packaging. Almost every instrument and part of technical equipment is made of iron or steel,” he pointed out.

“If we see the manufacturing plants of cement, assembly lines of cars, military equipment, textile plants, road-rollers, bulldozers, electricity poles etc, everything that is supporting the modern industrial life is made of steel or iron,” he explained. “If that is the case then we might as well have our own industrial capacity to produce iron and steel products. In fact, historical evidence shows that LSM is always preceded by manufacturing in iron and steel products,” he added.

Dr Adnan said that any country that wishes to develop economically, and wants to do so swiftly like China always views steel and iron industry as having strategic importance. “This strategic importance of these industries necessitates that we develop indigenous capacity to manufacture finished iron and steel products. Our continued dependence on imported iron and steel is hurting us,” he added.

Credit: Independent News Pakistan-WealthPk