Millat Tractors Limited, the assembler and manufacturer of tractors in Pakistan, announced on Thursday that it will close its operations from January 6 onwards citing low demand and cash flow constraints.

The company shared the development in its notice to the Pakistan Stock Exchange (PSX).

“Due to continuing reduced demand of tractors and cash flow constraints, the Company will remain closed from Friday, January 06, 2023 till further notice,” read the statement.

The development comes as dozens of companies in recent weeks have announced either a shutdown or reduction in operations in Pakistan owing to reduced demand, inventory shortage, energy crunch and supply chain disruptions.

Last month, MTL announced that it would observe non-production days on Friday, citing lower demand.

The company then said that “due to reduced demand of tractors, the company will observe Fridays as non-production days from December 16, 2022, till further notice”.

Meanwhile, market experts believe that the situation will remain gloomy in the coming months, with negative growth expected in the industrial sector.

Days ago, Crescent Fibres Limited, engaged in the manufacture and sale of yarn, announced to curtail production by up to 50% on a temporary basis.

Earlier, KSB Pumps Company Limited (KSBP), a manufacturer of industrial pumps, suspended its plant operations from January 02, 2023, citing import restrictions.

Facing the consequences of flood devastation, high inflation and policy measures, Pakistan’s economy is expected to witness economic contraction this fiscal year, said Ismail Iqbal Securities Limited (IISL) in its report titled ‘Pakistan Outlook 2023 No Easy Way Out’ released earlier this week.

“We expect GDP growth at a negative 1% in FY23 (Govt target 5%), which would be on the back of a broad-based slowdown across all sectors,” it said.