All Pakistan Textile Mills Association announces closure of 200 mills from tomorrow

[fitpOsitive]

APTMA announces closure of 200 mills from tomorrow, as buyers cancel export orders

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KARACHI: The All Pakistan Textile Mills Association (APTMA) has announced closure of 200 of its processing mills from Monday, July 1, as international buyers rejected export deliveries of the mills due to price increase.

APTMA in a press statement said a meeting of around 200 mills was held in Karachi on Saturday, where members said that their buyers had refused to pay the new prices for their orders. Thus, the millers had decided to shut down their operations from the first day of the new fiscal year.

Earlier, APTMA Sindh-Balochistan Region Chairman Zahid Mazhar had said that an increase in gas tariff by 31 percent was the last nail in the coffin of the general industry and the textile industry in particular.

He said the textile sector was already facing unbearable costs of manufacturing, which were very high as compared to the regional competitors.

Due to the high cost of doing business, inadequate supply of raw material, drastic increase in interest rate, and liquidity constraints due to the delay in refunds of sales tax, almost 140 textile mills had already closed their operations.

That he said resulted in about a million workers losing their jobs. “Around 75 to 80 mills are on the verge of closure, which will add to the unemployment figures by another 0.5 million workers employed in the textile industry,” he added.

Speaking about the removal of the zero-rating facility for the five exporting industries, Mazhar said the textile sector had not yet come out of the shock of the government’s adverse decision to withdraw the zero-rated facility.

In Federal Budget 2019-20, the government decided to withdraw the statutory regulatory order 1125(I)/2011, which allowed zer-rated sales tax on inputs and products for the five major export-oriented sectors – textile, leather, carpets, sports goods, and surgical instruments.

He said that as if that was not enough, the government was going to hit the industry with another blow in the shape of increased gas tariff.

He said the gas tariff for industry in Bangladesh was $3.0/MMBTU, which was more than 50 percent cheaper than Pakistan.

He further said that due to the closure of about 140 mills, and the mills operating under capacity, Pakistan’s textile exports were suffering an opportunity loss of more than $4.0 billion per annum.

APTMA Sindh-Balochistan Region chairman demanded the government to save the export-oriented textile industry and Pakistan from complete disaster by not increasing the gas prices.

He also asked the government to instruct the gas utility companies to meet their revenue requirements by strictly following the UFG benchmark in accordance with the international best practices, and reducing other expenses with better management.

Last week, the Economic Coordination Committee (ECC) of the Cabinet approved the decision to increase the gas tariff by 31 percent for the general industry, power plants, cement, and fertiliser, etc.

The new tariff would be enforced from today, as was agreed with the IMF. Consumers of gas would be paying up an additional Rs170 billion, including the increased in GST
https://www.thenews.com.pk/print/49...-from-tomorrow-as-buyers-cancel-export-orders

Their demands are legit.

 

[KhanBaba2]

What the hell? Of course devaluation, gas and oil price hike, more and more taxes, are putting businesses on the edge, they have to increase their prices to account for the expenses and that makes it harder for them to compete in the International market. This is very bad news, textile is one of the most major export products. This is not blackmailing.

It was known from first day what effect this will have. Businesses will profit less, many will close down, the loans will increase many folds since revenue generation is in Rupees and payment is in USD, the buying power of people will decrease, we put a gun shot in our own leg and hurt our industry badly.

They are selling in USD. So with devaluation, they can keep the USD rate the same and still get a lot more PKR. Should be more than enough to cover for the increase in gas prices.

 

[Dubious]

for the Amount of indirect taxes Pakistani pays. modern socialist structure can be given.

please dont blame majboor awaam. blame majboor hukumraan

I blame everyone:

awaam for their endless stupidity and lack of foresight (living for now rather than living a life)...

he hukumraan for their lack of ability to drag us out! Lack of ability to do something to generate money!

Learn to code.

Life is tough - if you cannot survive in the free market that's too bad. Government has no role propping up private businesses.

That is true! We have been bailing out state stuff like PIA, railway and whatnot for far too long that now even private businesses think they deserve a hand me out!

 

[Lincoln]

You bloody idiot. Govt has already given so many concessions to these exporters yet they want more. Go and check the list of subsidiaries these people are enjoying than post.

Lmao. All these subsidiaries are there for Chinese products. Our own domestic industry isn't getting shit from our own Government, instead its being beaten down by the Government who are letting Chinese products dominate the market.

The only thing keeping it afloat is the people, the foreign Governments who offer subsidiaries and special status, and good managers in Electricity and Gas companies who are making sure these Industries don't have any outages. The Government itself has taken a huge dump on the private sector and told it to go f*** itself.

 

[RIP Pak LAW]

Lmao. All these subsidiaries are there for Chinese products. Our own domestic industry isn't getting shit from our own Government, instead its being beaten down by the Government who are letting Chinese products dominate the market.

The only thing keeping it afloat is the people, the foreign Governments who offer subsidiaries and special status, and good managers in Electricity and Gas companies who are making sure these Industries don't have any outages. The Government itself has taken a huge dump on the private sector and told it to go f*** itself.

Go and update yourself. China is also now providing you subsidiaries / special status. You should say thanks to current govt for that. No one is stopping Pakistani exporters to penetrate into China market now.

 

[El Sidd]

I blame everyone:

it is your freedom. let no one take that away from you.

So what are the GoP tactics to counter this apparent blackmail?

should they all now open small Shops and make handcrafted utensils for alleged hordes of tourists waiting at Lahore airport?

 

[Lincoln]

They are selling in USD. So with devaluation, they can keep the USD rate the same and still get a lot more PKR. Should be more than enough to cover for the increase in gas prices.

You are assuming that the production cost remains same and not accounting for taxes and price hikes in industrial essentials.

Go and update yourself. China is also now providing you subsidiaries / special status. You should say thanks to current govt for that. No one is stopping Pakistani exporters to penetrate into China market now.

This Government is trash, it really is, no need to thank it. As far as I think, it should step down.

And you simply don't get it. Even with subsidiaries, it is hard for our products to compete due to quality and price, and that only becomes worse with new price hikes.

 

[313ghazi]

I blame everyone:

awaam for their endless stupidity and lack of foresight (living for now rather than living a life)...

he hukumraan for their lack of ability to drag us out! Lack of ability to do something to generate money!


That is true! We have been bailing out state stuff like PIA, railway and whatnot for far too long that now even private businesses think they deserve a hand me out!

Long term we will benefit from this. The only businesses that will survive are those able to profit without hand holding. They will create a culture of sustainable businesses - not those who rely on subsidies. Why should the salaried class pay taxes to foot the bill of subsidies of businesses owned by millionaires?

Pakistani companies are archaic, inefficient, wasteful, run without merit. They don't take advantage of new business processes or tech. They just want everything on a silver platter. Let them fail - if there is a sustainable market, better versions will setup to exploit that gap.

 

[Yaseen1]

this is expected we should ask china to develop new mills which use chinese made electricity and fuel used for such mills should be financed by china.This will generate employment and train our public to work hard

 

[313ghazi]

you simply don't get it. Even with subsidiaries, it is hard for our products to compete due to quality and price, and that only becomes worse with new price hikes.

If someone is producing a shit product at a high price, why should the tax payer keep his business afloat? Let it fail.

 

[Lincoln]

I blame everyone:

awaam for their endless stupidity and lack of foresight (living for now rather than living a life)...

he hukumraan for their lack of ability to drag us out! Lack of ability to do something to generate money!


That is true! We have been bailing out state stuff like PIA, railway and whatnot for far too long that now even private businesses think they deserve a hand me out!

Because your Government policies have put them there. What people don't understand is that a Government has to produce favorable conditions for private businesses to grow.

They aren't asking for a hand out, they are asking for a little bit of sense from the Government.

Your industry not running hurts your own country more. These private businesses might as well shift to Bangladesh.

 

[313ghazi]

this is expected we should ask china to develop new mills which use chinese made electricity and fuel used for such mills should be financed by china.This will generate employment and train our public to work hard

Will people be happy to pay the price the Chinese ask? If you want tech alone you'll have to pay for it up front. Will the billionaire mill owners used to tax payer money, spend thier own money on tech?

If you want it free, the only way that will happen is with Pakistani companies being sold to Chinese firms or the Chinese setting up thier own factories.

 

[Dubious]

, it is hard for our products to compete due to quality and price,

those running these business need to figure that bit out! After all BD can compete are you saying BD is tax free?

The price hike for electricity and gas differs for businesses as compared to household usages!

 

[Lincoln]

If someone is producing a shit product at a high price, why should the tax payer keep his business afloat? Let it fail.

*facepalm*

Did you consider why it is a shit product?

1. Government taxes, inflation, price hike. Companies forced to drop quality and increase product price.
2. Government incapability to promote industry, and incapability to provide 24/7 electricity, gas and water to these industries.

 

[bananarepublic]

If someone is producing a shit product at a high price, why should the tax payer keep his business afloat? Let it fail.

if someone is governing the country in shitty way with back breaking taxation, why should the tax payers support him