Etihad Alloys (Private) Limited ('EAPL' or 'the Company') was incorporated on 16 March 2021 as a private limited company under the Companies Act, 2017. Its registered office is at 4-Bawa Park, Upper Mall Scheme, Lahore, and its production complex is at Village Karamabad, District Rahim Yar Khan, adjacent to Etihad Sugar Mills Limited. EAPL was granted Special Economic Zone (SEZ) status in CY25, carrying a income tax holiday as per applicable laws, from the start of commercial operations.

The Company belongs to the Etihad Group, a family-controlled industrial house with interests spanning sugar, construction, real estate, hospitality and new ventures, including steel. EAPL was established as a greenfield, project-led venture to develop an integrated long steel complex in phases. The steel melting plant was the initial project, followed by the captive bagasse-fired power plant and, most recently, the rolling mill to support downstream integration from merchant billets into rebar. The steel melting plant reached financial close through a syndicated term finance facility, supported by full upfront sponsor equity, with debt repayment commencing in March 2023, well ahead of operations. The power plant was subsequently brought under EAPL through the amalgamation of Etihad Power Generation Limited (EPGL), previously a wholly owned subsidiary, effective July 2023 under an order of the Lahore High Court. It reached financial close on 5 August 2024, with drawdowns linked to project milestones. The rolling mill was added subsequently, with its debt package led by Bank Alfalah and Bank of Punjab, which has been sanctioned and partly drawn. Growth has remained entirely organic and project-led, with sponsors consistently front-loading equity ahead of debt drawdowns across the projects. Further, the sizeable related-party balance outstanding at FY23 was converted into permanent capital, strengthening the Company's capital base.

The Company’s ~73-acre site comprises a ~66-acre industrial complex and ~7 acres of residential colony and other ancillary facilities. The industrial complex includes a steel melting plant with a designed capacity of ~250,000 MT per annum of billets, a rolling mill with capacity of ~200,000 MT per annum of rebar, and a 37.2 MW bagasse-fired captive power plant. The integrated complex is being developed in phases, with trial runs having commenced at the melting and power plants in September 2026. Trial runs at the melting shop have commenced with one of its three furnaces, while the remaining furnaces are expected to be brought into trial operation progressively as the process stabilises. The rolling mill is near completion and targeted for completion by December 2026, enabling the Company to move downstream from billet production into rebar manufacturing. Imported ferrous scrap will be the primary raw material, with LCs established with four banks to support initial procurement. The captive power plant will utilise bagasse sourced from the adjacent group sugar mill. The Company remained in the pre-commercial stage during the review period, with no commercial sales recorded up to June 2026.

Project Status (PKR mln)

Control rests with the sponsoring family of the Etihad Group. Mr. Mohammad Munir holds 51% of the shares in his individual capacity, and Etihad Sugar Mills Limited, an associated group company, holds the remaining 49%. Strategic direction is exercised by the Chairman and Chief Executive, Mr. Zahid Jamil, the group's principal decision-maker across its industrial ventures.

The shareholding has remained unchanged since inception. The Company is part of the broader business interests of Mian Muhammad Munir, who also owns Etihad Sugar Mills and has interests in other group concerns. The common ownership provides strong alignment at the sponsor level and supports continuity in the Company’s strategic direction.

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.

Sponsor support remains a key strength of EAPL’s financial profile. Equity, including the sponsors’ loan, increased from PKR 4,775mln at FY23 to PKR 11,099mln at FY26 (audited). During FY26, the sponsors’ loan increased by PKR 1,880mln to PKR 5,302mln. Debt service obligations to date have been met through sponsor resources. Etihad Sugar Mills, through its 49% direct stake in EAPL, provides an established cash-generating business within the broader group and supports the sponsors’ capacity to provide funding. It has also extended corporate guarantees on the Company’s long-term and short-term facilities. Continued sponsor support during the transition to commercial operations remains important, particularly until the Company’s operating cash flows become sufficient to support its financial obligations.

The Board comprises two directors, both representing the sponsoring family and both holding executive roles: Mr. Zahid Jamil, Chairman and Chief Executive Officer, and Mr. Ashfaq Ahmad. There are no independent or non-executive directors and no board committees, a structure permissible for a closely held private company. Both directors attended all board meetings during FY26. Project oversight is exercised through a project committee of the technical leads and the Chief Operating Officer, reporting to the CEO and the Board.

Mr. Zahid Jamil has extensive hands-on experience in planning, erecting and commissioning industrial projects across the group, and supervises procurement for all group entities spanning sugar milling, medical equipment, construction and agri-inputs, a skill set directly relevant to an equipment-intensive build. Mr. Ashfaq Ahmad (Master's in Economics) served in banking for ~22 years and currently leads the procurement division at the Etihad Sugar Mills site, contributing a financing and lender-relationship perspective.

The Board has remained actively involved in overseeing project execution, including financial close across all three components, sponsor funding and debt servicing. It continues to monitor project progress, COD timelines and financial obligations as the Company transitions towards commercial operations. As the business moves into the operational phase and its activities expand, further formalisation of the governance framework, including board-level processes and oversight mechanisms, would support a more structured approach to decision-making and monitoring.

Yousuf Adil, Chartered Accountants, the external auditor, issued an unqualified opinion on the FY26 financial statements with no emphasis of matter.

EAPL operates with a project-oriented organizational structure, with the Chief Operating Officer overseeing technical and operational functions and the Chief Financial Officer responsible for finance. Both report to the CEO, alongside the Company Secretary. The Head of HR reports to the COO, while the Head of Internal Audit reports directly to the Board. Decision-making is currently centralised at the CEO level, including procurement authority across group entities. Management has developed an organogram for the operational phase, with the organizational structure expected to evolve as the Company transitions to commercial operations.

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 has 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 eighteen 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 has been associated with Etihad Group since 2016.

Management has demonstrated effective execution of the project to date, with financial close achieved for all three components, major equipment procured and delivered, SEZ status obtained, LC lines established with banks, and trial runs commenced. The phased approach to commissioning, including the initial operation of a single melting furnace, reflects a measured approach to bringing the complex online.

A cloud-based ERP solution from an established vendor is being rolled out, covering the standard modules of a manufacturing concern. It is intended to shorten reporting cycles and provide transaction-level visibility over production, procurement and finance, but its effectiveness in supporting production planning, inventory control and variance reporting will only be demonstrated against live operating volumes.

Internal controls are being further formalised as the Company transitions towards commercial operations. During the construction phase, financial discipline was supported by lender-imposed controls, with drawdowns linked to verified project milestones. A Head of Internal Audit, in place at the Group level since 2014, reports directly to the Board. The Company is also developing and formalising its internal control systems and procedures to support operational efficiency, compliance and safeguarding of assets.

Pakistan's steel sector is small by global standards, with per capita consumption of ~48kg in 2024 against a global average of 214.7kg, indicating substantial latent demand but weak realised volumes. The industry is predominantly electric arc and induction furnace based, dependent on imported scrap, and concentrated in the private sector given that Pakistan Steel Mills is non-operational. Demand is closely tied to construction and public infrastructure spending. FY25 marked a severe downturn for long steel: billet and ingot production fell 22.4% YoY to ~3.8mln MT, while imports of finished steel rose 10.3% to ~3.2mln MT, taking imports to ~31% of total supply of ~10.4mln MT. Local production declined a further ~15% YoY in 1HFY26, albeit at a slower pace, with imports rising to ~39% of supply. Installed capacity of ~6.5mln MT per annum operates at 40–60% utilisation, constrained by energy costs and weak downstream demand. Profitability nonetheless recovered in FY26 as finance costs and electricity tariffs eased: sector sales rose 20% YoY to PKR 294.7bln, gross margin widened to 10% from 7%. Scrap imports rose sharply in mid-2026 (July 2026: 408,041 MT, up 42.6% YoY), signalling volume recovery, although the scrap-to-rebar spread compressed ~15% as international scrap prices rose 3% while rebar prices fell 1%. Grade 60 rebar was quoted at PKR 230,000–232,000 per MT in mid-2026. On policy, the FY26 budget reduced customs duty on steel and melting scrap to 0% (from 2–3%), and the National Tariff Policy 2025–30 is progressively lowering additional customs and regulatory duties. Cheaper inputs help melters, but eroding protection on finished steel exposes domestic producers to imports. Construction-related tax relief supports demand, while a tax linked to monthly electricity consumption raises fixed costs for under-utilised melting units. The sector's principal credit risks are therefore scrap import dependence and exchange rate exposure, chronic overcapacity against a heavy fixed cost base, working capital intensity and reliance on LC lines, and demand concentration in a fiscally constrained public construction cycle.

EAPL is expected to enter the long steel market with ~250,000 MT per annum of melting capacity and ~200,000 MT per annum of rolling capacity. The Company’s competitive positioning is supported by three key factors: captive bagasse-based power, providing an in-house and potentially cost-efficient source of electricity; a SEZ tax holiday, supporting margins during the initial operating period; and a central Punjab location, enabling access to both northern and southern markets. The integrated setup, spanning billet production, captive power generation and downstream rebar manufacturing, provides a platform for establishing the Company’s market presence. Commercial operations are yet to commence, with market share and customer relationships expected to develop alongside the ramp-up in production. The Company’s scale, coupled with its integrated operations and locational advantage, is expected to support its positioning as it enters the market.

The Company remained in the pre-operational stage through FY26, with revenue generation expected to commence in FY27. Initial sales are expected to comprise merchant billets supplied to girder and independent rebar manufacturers. Following commissioning of the rolling mill, the product mix is expected to progressively shift towards rebar, with longer-term plans to expand into specialised alloys and non-ferrous exports.

EAPL is expected to benefit from its captive bagasse-based power plant, with fuel sourced from the adjacent group-owned sugar mill, providing a potential cost advantage as operations commence. Margins will remain sensitive to ferrous scrap prices, which are largely US Dollar-priced, as well as exchange rate movements. Bagasse availability is seasonal and linked to the sugar crushing cycle, making adequate fuel stocking and supply arrangements important for year-round operations. The cost base also carries significant fixed costs, including depreciation, finance costs and power plant overheads, making capacity utilisation an important driver of unit costs. The Company’s ability to translate its power and SEZ tax advantages into realised cost efficiencies will therefore be an important factor in margin development as production scales up.

EAPL's financial profile is expected to evolve with the commissioning and subsequent ramp-up of its integrated steel complex. Of the total project cost of PKR 19,934mln, ~94% (PKR 18,642mln) had been incurred by end-Jun26 as per audited accounts. The balance is expected to be funded through a mix of debt and equity. Funding to date has come from long-term bank financing and interest-free sponsor loans, broadly in line with the targeted capital structure. With trial runs underway, the Company is moving into the operational phase, with capacity ramp-up, process stabilisation, product acceptance and working capital availability expected to shape near-term performance. Earnings prospects are supported by sector demand, lower finance costs and the SEZ tax holiday. The captive bagasse-based power plant is also expected to provide a cost and energy-efficiency advantage, while its lower carbon intensity may support the Company's longer-term export plans.

With COD approaching and the Company moving towards commercial production, working capital requirements are emerging as raw material procurement commences. EAPL has started procuring imported ferrous scrap, with LC lines established with multiple banks to support procurement. As operations scale up, working capital needs are expected to be funded through a combination of bank facilities and internally generated cash flows. Efficient management of inventory and receivables will remain important, particularly as imported scrap requires funding ahead of sales realisation.

Financial metrics are expected to become more meaningful following commencement of commercial operations. To date, debt servicing has been supported by the sponsors, with scheduled instalments on the steel and power facilities serviced as they fell due. Repayment of the re-rolling facility has not yet commenced. Going forward, the Company’s debt servicing capacity will be assessed as operating cash flows build up following COD.

Total borrowings increased during FY26, alongside an increase in equity, including sponsors’ loans. Consequently, leverage increased, broadly approaching the targeted 50:50 debt-equity structure. The capital base continues to be supported by sponsor funding, while accumulated losses weigh on reported equity. With significant progress on project construction and the Company moving closer to commercial operations, debt amortisation has commenced for the steel melting and captive power facilities. The remaining sanctioned financing is expected to be drawn in line with project requirements and progress, particularly as working capital needs emerge with the commencement of operations. The debt mix includes concessional financing alongside KIBOR-linked facilities, providing some support to financing costs. Financial flexibility remains dependent on continued sponsor support during the initial operating phase, given debt servicing obligations and the gradual build-up of internally generated cash flows as commercial operations commence.

Project Debt Position as at September 2026 (PKR mln)