Ideal Spinning Mills shuts spinning unit amid unfavourable conditions & rising costs

In a setback for the country’s key textile sector, Ideal Spinning Mills Limited has decided to shut down its spinning operations, citing unfavourable market conditions and rising costs.

The textile mill disclosed the development in its notice to the Pakistan Stock Exchange (PSX) on Friday.

“The Board of Directors of Ideal Spinning Mills Limited in its meeting held today, i.e. 11 July 2025, has accorded approval for sale/disposal of the company’s spinning segment’s major portion of plant and machinery,” read the notice.

The company said the decision has been taken given prevailing unfavourable conditions for spinning,g especially demand for yarn and costs of operations.

“Hence, the company will discontinue its spinning operations but continue with its weaving and socks units,” it informed.

The Board of Directors have decided to convene an Extraordinary General Meeting (EoGM) to seek the stakeholders’ approval in this regard.

Ideal Spinning Mills Ltd is a public limited company incorporated in Pakistan on 8 June 1989 under the Companies Ordinance, 1984. The principal activity of the Company is the manufacturing and sale of yarn, cloth and hosiery products.

Days ago, the textile export industry urged the government to immediately address unresolved budget anomalies, as continued inaction could disrupt exports and weaken exporters’ confidence. Pakistan stands at a crossroads, and with the right policy support, exporters can generate growth, employment, and economic stability, said Chairman Pakistan Textile Exporters Association Sohail Pasha.

He pointed out that Pakistan’s value-added textile sector is currently facing severe setbacks due to taxation measures introduced in the Finance Act 2024, which replaced the simplified Final Tax Regime (FTR) with the more burdensome Normal Tax Regime (NTR).

He said export proceeds are subject to the deduction of 1% Advance tax under Section 154 as minimum tax. Simultaneously, an advance tax @1% has been levied through the insertion of sub-section (6C) in section 147; however, contrary to this, local supplies are liable to payment of 1% advance tax.