Etihad Alloys (Private) Limited (“EAPL” or “the Company”) was incorporated on March 16, 2021, as a private limited company under the Companies Act, 2017. The Company’s registered office is located at 4-Bawa Park, Upper Mall Scheme, Lahore, while its production facility is based in District Rahim Yar Khan.

Etihad Group is in the process of setting up a new industrial unit in Rahim Yar Khan, Punjab. The project will comprise a steel melting as well as re-rolling mill designed to achieve an annual melting capacity of around 250,000 tons, and rolling capacity of around 200,000 tons. Additionally, a 37.2 MW bagasse-based renewable energy captive power plant is also under construction. The Company holds about 73 acres of land for its Steel and Power Projects.

In the first year of operations, the Company will start manufacturing steel billets from scrap, as billets serve as a critical input for various value-added steel products. Target industries for billet consumption include: i) wire rods, ii) steel pipes and tubes, iii) GI pipes, and iv) rebar mills. Upon completion of Re-rolling Mill, it will immediately move to rebar production, primarily using its own Billet. EAPL will gain a competitive advantage through access to cost-effective electricity from its aforementioned captive power plant.

The ownership structure of EAPL comprises two parties: Mr. Mohammad Munir, who holds a majority stake of 51%, and Etihad Sugar Mills Limited, which owns the remaining 49%.

Mr. Muhammad Munir, the major shareholder of EAPL, also holds substantial shares in Etihad Sugar Mills, Etihad Town, and Technical Associates. This arrangement positively contributes to the stability of the ownership structure.

The sponsor, Mr. Mohammad Munir, brings a wealth of experience in successfully managing businesses across diverse sectors, including sugar, real estate, hospitality, and construction. His firm commitment enables him to navigate complex market dynamics and effectively drive growth.

The financial strength of the sponsor, Mr. Mohammad Munir, is considered strong. His commitment to the Company is evident from the upfront equity injection at inception and the continued financial support extended as needed. Moreover, repayments of the project loans have been made by the sponsor, with 11 installments paid to date in a timely manner, further demonstrating his sustained commitment to the Company.

Overall control of the board vests with a two-member board of directors, both from the sponsoring family. This includes the Chairman/CEO, Mr. Zahid Jamil, who has a long-standing association with the group. The other board member is Mr. Ashfaq Ahmed. Both board members hold executive roles within the Company’s management.

Mr. Zahid Jamil possesses experience in multiple domains, such as planning, setup, equipment installation, deployment, and operational management across multiple industrial projects within the group. He actively oversees procurement activities for all group entities. Mr. Ashfaq Ahmed, with 23 years of experience in the banking industry, has been associated with the group for over a decade.

With only two members, EAPL’s board has a relatively limited governance framework compared to larger, more established corporations.

Yousaf Adil Chartered Accountants is the external auditor of the Company. They have expressed an unqualified opinion on the Company’s financial statements as of June 30, 2025.

EAPL has a well-defined organizational structure where both Steel and Power projects have respective Technical Directors while the Operational and commercial matters are overseen by the Chief Operating Officer. Jointly they form a Project Committee who reports to the CEO/Board. The structure is expected to evolve further as the Company approaches commissioning.

Mr. Zahid Jamil serves as the CEO of the Company. Mr. Sakhawat Qureshi holds the position of steel Project Director, while Mr. Asad Ullah Khan holds the positions of Power Project Director. Mr. Qureshi previously worked with various steel projects inside and outside Pakistan. Similarly, Mr. Asad Ullah Khan as worked with various Power Plants within and outside Pakistan. Mr. Saqib Riaz, FCA, is the Chief Operating Officer and the Chief Financial Officer, bringing over fifteen years of experience in managing operations, finances, financial reporting, legal and tax. Prior to this role, he served as the CFO of Nishat (Chunian) Limited. He is associated with Etihad Group since 2016.

The management team is actively involved in managing multiple aspects, such as strategic business planning, financial decision-making, and human resources management. EAPL is supported by a group of experienced professionals who possess the necessary technical expertise.

The Company is in the process of implementing a cloud based ERP solution developed by a reputable software provider. This ERP software will include all basic standard operational modules. This system will enable faster and more detailed reporting of operations.

The Company is currently in the process of developing and formalizing its internal control systems and procedures aimed at enhancing operational efficiency, ensuring compliance, and safeguarding its assets.

During FY24, demand for long steel remained subdued due to high borrowing costs, inflationary pressures, and reduced public spending under fiscal constraints.  Steel demand in Pakistan is closely linked to construction activity, infrastructure development, and other cyclical industries such as automotive and appliances. Macroeconomic conditions play a pivotal role in shaping consumption trends. Demand for rebar is closely tied to construction and infrastructure cycles, making it highly sensitive to economic conditions. Sluggish economic growth in FY24 led to reduced construction and infrastructure activity, directly dampening steel consumption. Domestic steel demand saw only a marginal uptick (~1.8% YoY in FY24). High interest rates and inflation during FY24 curtailed financing for private projects, further suppressing steel bar uptake. Entering FY25, early signs of recovery have emerged: the central bank’s monetary easing (policy rate cut to 11% by May 2025) has contributed to about 6.61% growth in construction sector output during 3QFY25. However, the combined construction & real estate sector grew only by 3.8%. Looking forward, with interest rates declining, overall net profit margins are expected to improve. However, the extent of recovery will remain dependent on demand dynamics, scrap price trends, and energy costs.

EAPL’s access to low-cost electricity from its captive bagasse-based power plant is expected to lower production costs and enhance competitiveness. Further, its mid-country presence adds strategic advantage to tap both southern and northern markets.

Etihad Alloys primary revere in the long run, will focus on sale of rebar, specialized alloys and export of non-ferrous metals.The Company’s competitive advantage will lie in its SEZ status, mid-country presence and lower production costs, supported by renewable energy from its captive power plant. The Company is currently in the pre-COD phase and will begin generating revenue after it commences operations. The plant’s full-fledged COD with Re-rollig Mill is expected in CY26.

EAPL will gain a strategic advantage from lower electricity costs through its captive bagasse-based power plant, supported by a steady bagasse supply from the adjacent group-owned sugar mill. This is expected to enhance competitiveness and margins once operations commence.

Going forward, demand is expected to be supported by PSDP-funded government projects, including flood rehabilitation programs. Furthermore, spending in the private sector is also expected to increase considering the downward trend of interest rate. The Company is currently in the construction phase; therefore, its sustainability will remain contingent on the timely and successful commissioning of its operations.

The Company is currently in the construction phase; therefore, as at 30 June 2025 there is no immediate need for working capital. However, management projections indicate the necessity for short-term borrowings from banks, as the major raw material, iron scrap, is imported from the European, Middle Eastern and American markets. The projections further suggest that working capital will be managed through a mix of internal cash flow generation and bank borrowings

Financial metrics will materialize once EAPL commences operations following its COD. Projections, however, indicate that operational cash flows will be sufficient to meet obligations in a timely manner.

The overall project is expected to be completed at a total cost of PKR 20,000 million with ultimate debt-to-equity ratio of 50:50. The debt financing includes a TERF facility of PKR 1,000 million at a fixed rate of 3.75% pa and Renewable Energy Refinance of PKR 340 million at a fixed rate of 5.75% pa, while non-TERF/non-RE facility at an interest rate of 3MKIBOR + 2.75%.