What’s actually behind closure of nine sugar mills in Sindh?

ISLAMABAD: The Sindh government must explain the reasons behind the closure of nine sugar mills in the province, which is resulting in a major shortage of the commodity in the province.

Sources told Business Recorder Wednesday that six mills in Sindh were shut, and three remained non-operational. The question arises what role the Sindh government is playing to make these mills operational and what were the reasons for shutting down these mills? Moreover, in the present situation, the Sindh government needs to play the key role in re-opening of these sugar mills forcefully closed due to various reasons.

Sources said that why the federal government has been held responsible for closure of such mills in the provinces.

Some sugar mills in Sindh were declared bank defaulters due to one reason or another. These mills were unable to get the working capital from the banks and they were declared, defaulters.

The Sindh government can invoke laws for the “revival of sick units” as well as give subsidy to these mills for making them operational.

Centre shifts blame of costlier sugar to Sindh

If these mills have been made operational, the government can, not only overcome shortage but also result in additional production of the commodity, they added.

Out of 19 sugar mills in Sindh, nine were closed including three sugar mills owned by the Omni Group. Mills’ shutdown in Sindh - Seri; Venus; Najma; Asgsm; Mirza and Pangrio. Three closed mills are Bawany; Khoski and Thatta.

The Pakistan Sugar Mills Association (PSMA) data has also confirmed that five sugar mills in Sindh are not operational.

According to the latest data of sugar mills updated by the PSMA, five sugar mills are non-operational. These mills are Mirza Sugar Mills; Najma Sugar Mills; Pangrio Sugar Mills; Seri Sugar Mills, and Tando sugar mills.

When asked about the status of Bawany; Khoski and Thatta, PSMA spokesperson stated that Thatta is not operational, Khoski partially operational and Bawany is operational.

Out of the 19 mills in the province, six mills have been forced to shut down through administrative measures.

In Punjab Zone, four mills are non-operative i.e. Brothers Sugar Mills Ltd, Chaudhry Sugar Mills Ltd, Imperial/Colony-I (Phalia) Sugar Mills Ltd, and Haseeb Waqas Sugar Mills Ltd.

Within the jurisdiction of the KP, one unit, ie, Bannu Sugar Mills Ltd is not operative.

When contacted, the Securities and Exchange Commission of Pakistan (SECP) data revealed that Seri Sugar Mills Limited, company found and status of the company is “active”; Venus, company could not be found as per the SECP record; Mirza Sugar Mills Limited, company found and status of the company is “inactive”; Pangrio Sugar Mills Limited, company found and status of the company is “inactive”; Bawany Sugar Mills Limited, company found and status of the company is “active”; Khoski Sugar Mills (Pvt) Limited, company found and status of the company is “active”; Abdullah Shah Ghazi Sugar Mills Limited, company found and status of the company is “active” and Najma Sugar Mills Limited, company found and status of the company is “inactive”.

In a recent press conference, Minister for Energy Hammad Azhar blamed the provincial government for not promulgating law to force the sugar mills for start crushing of sugar as per schedule in Sindh.

Unlike Sindh, he said the Punjab government has directed the sugar mills to start crushing from November 15 to 20; otherwise, punitive action would be taken against them, which was Rs5 million per day penalty and registration of case with the FIA.

Special Assistant to Prime Minister Dr Shahbaz Gill alleged that the Sindh government deliberately delayed the crushing of sugarcane.

The sugar mills were deliberately closed down by the provincial government.

He said that increase in demand of sugar and delay in crushing of sugarcane caused hike in price of the commodity.

The government can overcome shortage of 200,000 tons of sugar by making operational these forcibly shut down mills.

Resultantly, the government would have an additional 100,000 to 200,000 tons of stocks.

Presently, the prime reason for the sugar crises is a deficiency of around 200,000 tons of sugar.

If the country’s sugar production were higher by about 200,000 tons, the price of sugar would be about Rs70/kg.

From 2009 onwards, there has been turmoil in the sugar industry in Sindh, where one party has dominated the sugar mills market in the province.

If all forcibly shut down were allowed to operate, an additional 100,000 tons of sugar would be available in the market.

Copyright Business Recorder, 2021