CHAUDHRY STEEL RE-ROLLING MILLS LIMITED CONSULTANT TO THE ISSUE CHAUDHRY STEEL RE-ROLLING MILLS LIMITED

INSTALLED ANNUAL CAPACITY (MTs) COMPANY PROFILE COMPANY OVERVIEW Chaudhry Steel Re-Rolling Mills Limited is an endeavor of well reputed Chaudhry Mohammad Shafique a seasoned second-generation steel manufacturer. CSRML was established and incorporated on February 1992 under provision of Companies Ordinance, 1984 as a Private Limited Company with its registered office at Badami Bagh, Lahore. Since then the Company has grown to become one of Pakistan’s leading steel rebar manufacturers and commands high reputation for providing highest quality steel products known for strength, stability and durability. The Company is an integrated steel producer with Billet and Re-Rolling Mill Units along with 10 furnaces, melt shops, quality testing facilities, raw-material storage facility, finished product ware houses and has a network of sales depots across Lahore. The Company currently operates at combined annual production capacity of 348,480 MT per annum (Melting and Re-Rolling). The plant is located at Badami Bagh, Lahore, which is the heart of Pakistan’s steel industry. The mid country location allows the Company to cater to both Central and Northern Pakistan and also facilitates export to Afghanistan. The establishment of unit dose Badami bagh has led to higher efficiency keeping in consideration future growth, the company has established a new plant site duster at Mehmood Booti, Ring Road Lahore. The company is further expanding its combined Melting and Re-Rolling production capacity to 618,480 MT per annum. SNAPSHOT INSTALLED ANNUAL CAPACITY (MTs) Company Chaudhry Steel Re-Rolling Mills Limited Country of Operations Pakistan Industry Construction and Steel Establishment February 1992 CEO and Chairman Chaudhry Muhammad Shafique Installed Capacity Melting:164,160 MT Re-Rolling:184,320 MT Revenue-FY17 PKR 12,350 Million

5 YEARS AT A GLANCE FINANCIAL SNAPSHOT CAGR: 8.89% 2017 2016 2015 2014 (Amounts in PKR millions) 2017 2016 2015 2014 2013 Revenue 12,350 11,494 11,423 9,626 8,784 Gross Profit 1,083 960 796 612 408 Profit after Taxation 512 404 331 214 191 Total Assets 3,339 3,345 2,878 2,493 2,154 Shareholders' Equity 3,000 2,441 2,038 1,707 1,493 CAGR: 8.89%

PRODUCT PORTFOLIO GIRDERS FLAT STEEL CHANNEL BAR SQUARE STEEL Girder are large iron or steel beam used for building bridges and the framework of large buildings. The Company produces girder ranging from 75x125mm to 100x200 mm. Flats steel is used for general purposes including automotive, heavy machinery, pipes and tubes, construction, packaging and appliances. CHANNEL BAR SQUARE STEEL Channel bar is used in Railings, Fencing, Trailers, Bracing, Structural support. The Company produces channel bar from 16mm to 89 mm. Square steel bar is a shape of steel bars that has industrial application. The Company produces steel bars in the range of 16mm to 89mm. T-IRON BARS TWISTED BARS T-Iron bars are used as connectors in steel structures in addition to being used in the automobile industry. Company’s product portfolio includes T-Iron from 16mm to 89mm. . The Company produces the finest twisted steel bars for grade 40 and grade 60 ranging from 10 mm to 40mm used in large infrastructure projects ANGLE BARS ROUNDED STEEL BARS Angle Bars are used for strengthening cross sections or horizontal support to structures. The Company produces a range of Angle bars from 3x32x32mm to 9.5x100x100mm Rounded steel bars are used in industrial maintenance, agricultural implement, transport equipment, fencing etc. CSRRL produces rounded steel bar between 16mm and 89mm BILLETS DEFORMED STEEL BARS Billets are used as raw material for rolling, forging and other metal processing operation. CSRRL produces billets from 80x80mm to 150x150mm. Deformed steel bars are used in residential, commercial & infrastructure application in the form of beam, columns and cages. CSRRL produces deformed steel bar between 12.5mm-44mm.

MAJOR CUSTOMERS & PROJECTS SWOT ANALYSIS AND MAJOR CUSTOMERS & PROJECTS SWOT ANALYSIS MAJOR CUSTOMERS & PROJECTS STRENGHTS The Company has developed a wide range of clientele over the years spread across Pakistan owing to the quality of its products. Continuous availability of raw material, i.e. high-quality scrap. Fully automated plant (CCM), hence less labor involved. Availability of low cost labor. Product affordability. Wide range of target market. WEAKNESSES Strict controls over labor efficiency need to be observed to reduce the waste production to a minimum level. Expected loss at the initial stages of the operation as a result of sales return from the distributors. Inexperienced technical staff as compared to the units currently in operation. OPPORTUNITIES As per demand 6 million MT p.a. and current local production is 2.9 MT p.a., so there is a huge gap still to fulfill the demand. A large number of people that are not brand loyal can be targeted through marketing campaign. About 40% of the Steel Market share comprises of un-branded steel products. This share can be gained through heavy marketing campaign. Local demand. ARFA SOFTWARE TECHNOLOGY PARK THREATS Already established businesses in same industry. Fluctuation in the price of international steel. Quality of the steel is to be monitored very closely as people are more directed towards health and safety issues. Strong competition and high promotional activity by the competitors

SECTOR OVERVIEW STEEL PRODUCTION AND CONSUMTPION-CRUDE STEEL Pakistan’s steel consumption grew at a 6 year CAGR of 24.8% whereas production only grew by 17% over the same period leading to a shortfall which was met through imports. The demand and supply gap of steel products grew by 5.6x from 0.77 million tons in 2010 to 4.3 million tons in 2016. Although Pakistan is the 6th most populous nation in the world, it has one of the lowest per capita consumptions of steel with per capita crude steel consumption of only 37.5 Kgs as compared to regional average of 266.1 Kgs and a world average of 224.4 Kgs Pakistan stands at the most structurally under penetrated market for steel production. If Pakistan’s per capita consumption rises over the next 5 years to equal the regional average i.e. 266.1 Kgs, Pakistan will require an additional 55 million tons of steel with an average of 11 million tons of steel per annum. The State Bank of Pakistan and the World Bank recently noted that housing shortage in Pakistan has reached 12 million housing units and according to a conservative estimate almost 0.4 million housing units are added to this shortfall every year. STEEL PRODUCTION AND CONSUMTPION-CRUDE STEEL PER CAPITA STEEL CONSUMTPION-FINISHED GOODS LISTED PEERS IN THE SECTOR

PEER BENCHMARKING FINANCIAL SNAPSHOT CHAUDHRY STEEL MUGHAL AMRELI (Amounts in PKR millions) CHAUDHRY STEEL MUGHAL AMRELI ITTEFAQ Revenue 12,350 18,803 13,284 4,442 Gross Profit 1,083 1,942 2,468 358 Profit after Taxation 512 991 1,074 141 Total Assets 3,853 16,024 18,209 5,143 Shareholders' Equity 3,000 6,637 9,391 2,934 Installed Capacity - Re-Rolling (MTs) 184,320 446,2241 180,000 120,000 Production - Re-Rolling (MTs) 155,952 241,773 158,206 53,323 Installed Capacity - Melting (MTs) 164,160 340,6881 200,000 Production - Melting (MTs) 116,207 163,778 N/A

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