Ghandhara Tyre suspends operations as economic turmoil takes toll
- Company says hindrance in securing LCs has severely disrupted supply chain
Ghandhara Tyre and Rubber Company Limited (GTYR) said it will temporarily shut down production from March 24 to April 3, citing supply chain disruptions.
The company, which manufactures and trades tyres and tubes for automobiles and motorcycles, made the announcement in a notice to the Pakistan Stock Exchange (PSX) on Monday.
“Due to the prevailing economic conditions in the country and its impact on the ability of the banks to open LCs (Letters of Credit) for import of raw materials have severely disrupted the company’s supply chain and as a result, it is unable to continue with the production activities,” read the notice.
“Therefore, the company has decided to temporarily shut down/close its production activities on the account of non-production days from 24 March 2023 to 3 April 2023.”
It added that it will “continue to monitor the situation for future course of action depending upon stabilization of the aforesaid factors.”
Pakistan’s auto industry, highly dependent on imports, has been caught in the midst of a crisis, as the SBP, after unabated rupee depreciation, imposed restrictions on the opening of LCs. Industries are facing hindrances in operations as the country’s reserves remained low.
Last week, Pak Suzuki Motor Company (PSMC) announced the shutdown of its motorcycle plant from March 20 to March 31 as it deals with an inventory shortage due to import restrictions.
Earlier, Honda Atlas Cars Pakistan Limited announced the longest plant shutdown to date in the current economic crisis amongst the country’s automakers.
The company said its plant would shut from March 9, 2023, to March 31, 2023.
As Pakistan remains engulfed in a balance of payment crisis, the country’s central bank chief had said that import compression would be eased after the completion of the International Monetary Fund (IMF) review because this policy cannot continue for a longer period of time.