Sitara Peroxide looks to ‘generate funds through various sources’ as shutdown bites

Pakistan’s chemical manufacturer Sitara Peroxide Limited is looking for avenues to generate funds as the company currently remains non-operational. The development comes a day after it announced it is extending its plant shutdown by another three weeks.

In its notice to the Pakistan Stock Exchange (PSX) on Thursday, the company informed that the Board of Directors in their meeting held on Wednesday, August 16, 2023, discussed the performance of the company.

“In this respect it has been decided by the board unanimously to generate funds through various sources to bring out the company from the existing situation in which plant operation and production has been suspended for the last few weeks,” read the notice.

Last month, SPL had announced to shut operations for two weeks citing non-availability of raw materials/chemicals.

The company, while presenting its quarterly financial statement for the quarter ending 31 March 2023, had stated that it is facing the challenge of an unprecedented rise in tariff of Regasified Liquid Natural Gas (RLNG).

Businesses in Pakistan have been facing challenges on several fronts, including high energy costs and an inability to secure letters of credit for imports amid a severe dollar shortage.

A programme with the International Monetary Fund (IMF) provided some breathing space, but experts say economic woes will continue until structural issues behind the constant boom-and-bust cycles are addressed.

Inflation has also recently slowed in July, but its outlook has been hit by a nearly 15% increase in fuel prices over the last two weeks. The State Bank of Pakistan (SBP) kept the key policy rate unchanged at 22% in its last meeting on July 31, but many believe another round of interest-rate hikes is on its way.

To conserve its low level of foreign exchange reserves – boosted only recently due to inflows from the IMF, Saudi Arabia and the UAE, – the government has restricted the flow of imports since last year.

While some curbs have eased, industrialists have raised concerns that they are finding it difficult to obtain import permits for their manufacturing needs.