Aruj Industries Limited, a Pakistani fabric manufacturer and exporter, has announced to temporarily halt production activities citing deteriorating economic conditions in the country.
The listed company shared the development in its notice to the Pakistan Stock Exchange (PSX) on Friday.
“Due to current economic conditions, low sales and working capital constraints, the company is facing losses,” ARUJ said in a statement.
“Therefore, the management of the company has decided to temporary close/stop the production activities till further notice,” it added.
Aruj Industries Limited, a public limited company, was established in 1992. The principal activity of the company is the manufacturing and sale of fusible interlining as well as dying, bleaching and stitching of fabric.
Earlier this month, a Karachi-based textile unit announced that it was shutting down its doors.
In an official handout issued on July 1, 2024, Naz Textiles (Private) Ltd had informed its workers to find jobs somewhere else as the company is facing huge losses from lack of orders.
“Till July 31 will be your last day and all your dues will be paid by August 10,” it told the workers.
The development is concerning for the South Asian country as textile industry is the backbone of Pakistan’s economy, contributing around 8.5% to the GDP and employing a significant portion of the labour force.
Experts have warned of a larger collapse in the country’s export industry as other companies brace for a similar fortune.
In the few weeks after the budget for FY25 has come into effect, cement, petroleum dealers, retailers, salaried group, flour millers have protested against taxation.
Days ago, cement dealers in Pakistan began their countrywide strike for an indefinite period against higher withholding tax on cement in the federal budget 2024-25.
The government increased the withholding tax to 2.5% for non-filers under Section 236H of the Finance Act 2024 which made the cement business unsustainable given the current market conditions besides the new turnover taxes imposed on dealers and retailers.
Meanwhile, flour millers are protesting against the imposition of a withholding tax of 5% on flour mills, as well as an additional 2.5% advance income tax on the sale of flour to wholesalers and retailers, announced by the government in its recent budget.
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