Companies pause operations in Pakistan as economic conditions worsen
- Khalid Siraj Textile Mills and Ghandhara Tyre and Rubber Company recently said they were halting factory operations
Deteriorating economic conditions in the country continued to bite industries, with several companies announcing they would be halting operations.
Khalid Siraj Textile Mills Limited, a manufacturer and seller of yarn, on Friday announced that its management has decided to shut mill operations until March 31, citing issues ranging from flash floods devastation to import restrictions.
The company disclosed the information in a notice to the Pakistan Stock Exchange (PSX)
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“The floods caused the cotton harvests to be devastated. Additionally, the situation has worsened due to political unrest, import restrictions, and an unchecked dollar increase,” read the notice.
The company said that these factors have increased inflation, undermined the rupee, driven up cotton prices as well as the cost of electricity per unit, and, most importantly, harmed business confidence.
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Pakistan’s economy is in dire straits, stricken by a balance-of-payments crisis as it attempts to service high levels of external debt amid political chaos and deteriorating security.
Inflation has rocketed, the rupee has plummeted and the country can no longer afford imports, causing a severe decline in industry.
In another development, Ghandhara Tyre and Rubber Company Limited (GTYR), which is engaged in the manufacturing and trading of tyres and tubes for automobiles and motorcycles, also announced it will temporarily shut down its production activities on February 13 and resume on February 20.
“The company continues to face immense hurdles towards importing its raw materials and obtaining clearance of consignments from commercial banks,” GTYR said.
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It added that it will continue to monitor the situation to determine its future course of action.
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