Skip to main content

Pakistan: 100 Mills Threaten to Close if Commodity Costs Don’t Come Down

Mills in Pakistan have taken to submitting notices of closure if the government doesn’t make reasonable efforts to restore the country’s competitiveness.

For much of 2015, Pakistan’s manufacturers have been battling to stay afloat amid higher import costs and rising commodity costs—the imposition of a Gas Infrastructure Development tax has increased the price of gas and the country’s electricity tariffs are the highest in the region.

The sum of those unfavorable parts has meant a loss in market share for Pakistan. In October, exports fell more than 10 percent and the trend could continue. Since 2013, the country’s share of exports fell to 1.8% from 2.2%, while market share in neighboring Bangladesh jumped from 1.9% to 3.3% and India’s exports increased to 4.7% from 3.4% in the same period.

According to Pakistan’s Dawn, hundreds of textile mills have written to the All Pakistan Textile Mills Association (APTMA) threatening to shutter their facilities if conditions don’t improve.

“About 70 textile mills have already closed down in Punjab due to commercial non-viability and complete gas suspension by the Sui Northern Gas Pipelines Limited (SNGPL), while another 100 are ready to close businesses,” APTMA Punjab chairman Aamir Fayyaz said at a press conference Monday, Dawn reported.

Businesses are prepared to close because the government has done little to affect their operating costs, namely the gas tariff, and it still hasn’t spoken about a much-delayed textile bailout package.

Millers in Pakistan haven’t demanded subsidies, only that the government remove what they consider and unjust surcharge on power tariff, Fayyaz explained.

Gohar Ejaz, an APTMA group leader, said the government has also yet to appoint a textile minister to address these grievances and still hasn’t announced the promised trade policy.

APTMA said it plans to call a conference of stakeholders to organize a joint-protest strategy.