Economics Analysis of Amreli Steels Pvt Ltd. #SZABIST #Karachi

1. Economic
Analysis of
Amreeli Steel
By Yasir Ahmed
M. Adeel
Yousif Solangi
Ali Javed

2. Introduction
• Amreli Steels Limited is one of the largest
manufacturers of Steel Reinforcement
Bars in Pakistan.
• 35 tons per hour, 150,000 metric tons
annually.
• Steel industry is like power industry,
production is low and demand is high.
• Amreeli steels is family business since 50
years

3. Products
• Amreli Steels products are manufactured
from prime quality steel billets.
• High strength Xtreme bars
• Xtreme G-500
• Hot rolled deformed bars
• steel bars Grade 60
• Many more.

4. Economic Analysis
• The Company type is, (Sole Trader, Partnership,
Corporation), Corporation Limited Liability
• Pakistan’s steel bar industry is doing well because of
the construction boom the country is witnessing.
• The market for steel bars has grown over the past few
years with rising steel requirement from the
infrastructure, retail and corporate sectors.
• There are 56 Sellers or Producers who are operating
in that industry

5. Economic Analysis
• Demand Determinants are simple, income
increasing, Pakistan Steel failing to
provide, no other strong competitor. Black
money in real state market, boom in
building infrastructure.
• Determinants of supply, less number of
sellers in market for durable products.
Technology shift, price expectations.

6. Economic Analysis
• The products are normal and luxury in nature
• The complimentary goods, could be cement.
• Substitute products are Pakistan steel, Faiz,
Adam, mughal etc.
• Income Group is Middle and High
• Total number of employees at year end are 327
and on year end 2014 were 311
• Both white and blue color employees

7. Economic Analysis
• Demand is increasing, Share price data suggest, The
price should be increased for revenue maximization.
• Demand is elastic around 32%, but market parameters
suggest that steel market is not elastic, but inelastic in
nature
• Opportunity cost as per CEO and BOD
• Chief Executive Director 7,428,000-1,000,000=6,428,000
• Directors 6,911,250-3,500,000=3,411,250
• Government want’s to bring steel industry on it’s feet, so
taxes are not aggressive in nature.

8. Economic Analysis
• Through HHI, market operates under,
Oligopolistic Market, monopolistic.
• Many Major Clients are their, Meezan bank,
MCB, Aga khan hospital, DHA, MES, Saima
Builders, Lucky Cement etc.
• Demand is increasing day by day, due to
different factors, keeping the price constant.
Income, sustainability, target market trust,
Government’s help, and strong development
projects.

9. Economic Analysis

10. Economic Analysis

11. Economic Analysis

12. Conclusion
• Pakistan’s economy is the 27m largest economy
in the world according to Purchasing Power
Parity and is rapidly growing.
• With a record Public Sector Development
Program outlay of PKR 700 billion, FY16 will see
a further push in infrastructure projects
• The “China Pakistan Economic Corridor
(CPEC)“ is also expected to kick off this year
and like everyone we are just waiting for miracle
to happen.