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

Textile Mills will shoot themselves in foot by shutting down production
They should focus on quality of their material vs crying about Gas Rate
 
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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
They are lieing.. Blackmailing tactics to the govt
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.


Everybody FAKE NEWS!!!!!!!!!!!



 
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increasing Gas and electricity prices mean production getting costly , increasing $$ means more money needed for fuking raw material which we import result production getting more costly …. and many more small problems (like tax , duties , petrol price , transportation price ) make business hard for them..... I told you all as soon as dollar hit 160 that will be end for many ……… and end is here speed up because of utility price hike ..

Textile Mills will shoot themselves in foot by shutting down production
They should focus on quality of their material vs crying about Gas Rate
you are one mad person who know nothing about any thing...……. Sir ..
 
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The real question should be, ARE THEY HAVING THESE PROBLEMS AS THEY MENTIONED? What are they doing about it? Strike???

Answer to all this is NO/Nothing!!

There was no strike. All mills are open and running as per routine. Their only problem right now is that they were selling product in local market and since the export was zero rates (no tax) they slipped the local invoices in that too. Now they know they will have to pay tax. The calls for strike and all are only to blackmail the government. :)

About two weeks ago the embroidery industry also called for a strike and went on a strike too, for one day!!

Sure.. go choke whatever exports you have left. When all of you job workers are out on the street, don't forget what most of us were screaming about in this thread.

You fail to realize that overhead costs are already to high in Pakistan. You want an efficient model? You can't have it because clients ask for certified factories, and certified factories cost money.

Minimum wage was recently increased from 14,000 to 18,000.

How many hits do you think businesses can take?

Then you have the 17.5% withholding tax, which sucks for all the businesses that have pre-bookings and also taken advances.
 
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Sure.. go choke whatever exports you have left. When all of you job workers are out on the street, don't forget what most of us were screaming about in this thread.

You fail to realize that overhead costs are already to high in Pakistan. You want an efficient model? You can't have it because clients ask for certified factories, and certified factories cost money.

Minimum wage was recently increased from 14,000 to 18,000.

How many hits do you think businesses can take?

Then you have the 17.5% withholding tax, which sucks for all the businesses that have pre-bookings and also taken advances.
What solution do you suggest?
 
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What solution do you suggest?
Give them the subsidy ……. No price hike for utility for them..... No tax increase or new tax … make sure in-house production of raw material ……. They are our life line ,, don't lose remaining business to BD and China..
Even if this cost Govt 1 billion $$ per year...…….. way better then losing money in metro bus subsidy ……..
 
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2ndly MOST who were not subsidized by NS already moved to BD ...alot of Faisalabad mills!
so you agree that Bangladesh has a much more favorable environment for business as compared to Pakistan. and now that IK has happened, all the rest will move there too. causing massive unemployment in Pakistan. bringing the exports down to zero.

Bangladesh also has taxes and red tape and what not, but business is thriving there. not the case here, despite a much more undervalued currency, why is that? Looks like IK doesnt know what he is doing.
 
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Give them the subsidy …….
Performance based subsidy is already given.

No price hike for utility for them.....
Gas rates were fixed by the gov. and electricity rates were decreased a year or so back.

No tax increase or new tax …
No tax on exports still. However gov. is right to say that local supply should be taxed.

Make sure in-house production of raw material …….
It is. Plus if some business group wants to invest in expanding the capacity to produce more raw material in Pakistan the machinery import is tax free.

They are our life line ,, don't lose remaining business to BD and China..
We have not lost business to BD or China really.

Even if this cost Govt 1 billion $$ per year...…….. way better then losing money in metro bus subsidy ……..
Agreed! 1 billion investment to increase exports is not a bad deal.



Sir, there is much more to this than what is being reported and discussed here. I am from textile export business so i can tell you it with certainty. Plus there wont be any strike from APTMA anyway. Also note that the exports of last 6 months were higher than previous 6 and the next 6 months will be even higher.

Textile Mills will shoot themselves in foot by shutting down production
They should focus on quality of their material vs crying about Gas Rate
They are not idiots. All this is just to threaten the authorities. There is no shut down, there wont be any. I just came back from a processing mill where i have some fabric on dyeing right now. What else i can say!!

2ndly MOST who were not subsidized by NS already moved to BD ...alot of Faisalabad mills!
Nope. Not true.
 
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How come the same businessmen who are unable to export stuff despite undervalued currency do well in Bangladesh, what are they doing right that we arent? The businessmen may not be the problem, the govt is.
 
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The number of mills/ business that closed in Faisalabad during NS rule was also a shock to the nation yet many didnt even blink?

Power looms were sold by weight to salvage iron from them by melting during last two years of Nawaz Sharifs government did anyone heard a peep on media about that ???

My uncles are associated with this industry(30 years plus) so are my other family members and the last two years 2016/2017 were the worst in the history of Pakistan for power looms no joke .

These APTAMA walas did not observe any strikes as PMLN government would sort them about via there usual gulu butt ways and government machinery

Did you know that manual power loom labor rates are increased each year 7% which did not increase for two years year 2016 and year 2017 but increased in 2018 under Imran Khan's government .

This is the so called progress of Nawaz and Ishaq Dar Manage the media and All is well
 
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Good that they announced it or we wouldn't have known. Will there be a mill closing party? Will there be cake?
 
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Power looms were sold by weight to salvage iron from them by melting during last two years of Nawaz Sharifs government did anyone heard a peep on media about that ???

My uncles are associated with this industry(30 years plus) so are my other family members and the last two years 2016/2017 were the worst in the history of Pakistan for power looms no joke .

True.
 
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What solution do you suggest?

You want to bring long term reforms? I'm up for it, but you cannot make spiking differences in one night. Change should be done gradually as it makes it flexible for businesses to keep up.

Why would you want businesses to die? The government should be guiding them to the correct path!
 
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There is a HUGE fk up, by the media, i am aware of it and i am watching it from the outside. LOVING IT!! :lol:

You want to bring long term reforms? I'm up for it, but you cannot make spiking differences in one night. Change should be done gradually as it makes it flexible for businesses to keep up.
Agreed. So what would be the long term reform suggestions?

Why would you want businesses to die? The government should be guiding them to the correct path!
No one will benefit if business die. So don't worry, that not on agenda. About guidance, how sir? Please share.
 
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what makes you claim this ?

are you a textile mill owner ?

are you from the govt tax collection dept ?

have you ever done a business / trade in your life ?

have you calculated product input cost for manufacturing ? input taxes ?

have you studied int;l markets ? what is price competitiveness ?

have you gone through the trouble in your life to take the risk of setting up a business unit, hiring people and paying taxes ?

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i would really appreciate your response on the above vs a lame one liner ( which this forum is full of these days )



yes

and we were told that devaluing the PKR would boost exports

quiet the opposite is happening !




such as .......... ?





are you even sane ? are you even in your senses ?

are you suggesting that the millions employed in textile sector, once they are laid off ,they will learn to code in a day and become bill gates ??


yes. life is tough ,

life will be made more tough for govt couch potatoes and PTI blind followers like you when people rise and revolt against these unjust and imposed IMF taxes

https://en.wikipedia.org/wiki/Peasants'_Revolt

^^and please dont tell there wont be a peasents revolt here

Go thru all my posts here and of others...
 
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