KARACHI: Nishat Chunian Limited (NCL), one of Pakistan’s largest textile companies, has announced partial shutdown of operations from next month due to current market conditions, JEE News reported on Thursday.
In a statement to the Pakistan Stock Exchange (PSX), the textile manufacturer informed that it will temporarily suspend work on about a quarter of its spindles until the market improves.
“The company has decided to temporarily shut down 51,360 spindles after one month due to market conditions. However, the rest of the units are functioning as normal. The company will restart these spindles as soon as the market conditions improve. will give,” the stock filing said.
Nishat Chunian’s spinning division has an installed capacity of 219,528 spindles and 2,880 rotors.
The textile manufacturer is the latest to announce suspension of operations amid the current economic downturn in the country. Earlier this month, Koh Noor Spinning Mills Limited (KOSM) also announced the suspension of its operations citing various reasons.
“Due to the current global and economic downturn, excessive plant maintenance, high cost of production and low price and demand, it is not feasible to operate the production facility,” KOSM said in a statement.
Pakistan faces a number of challenges, including low foreign exchange reserves, lack of foreign inflows, mounting debt, energy shortages, and political uncertainty affecting the country’s economy, which collectively are many. forcing companies to limit or close down their operations.
Other companies that have recently announced suspension of operations include Indus Motor Company, Pak Suzuki Motor Company Limited, Bolan Castings Limited and Balochistan Wheels Limited. Millat Tractors Limited is also observing a non-production day on Friday from December 16.
The restrictions imposed by the government to reduce the size of its import bill have adversely affected the export sector, particularly textiles, which account for a large share of the country’s exports. Delays in exemptions and rising inflation have also led to a decline in Pakistan’s exports in recent months.
Textile exports fell 19 percent year-on-year in November. The country’s major manufacturing industries, including food, textiles, petroleum oil, pharmaceuticals and automobiles, also declined by 7.75 percent in October 2022 compared to the same month last year.
Last week, the All Pakistan Textile Mills Association (APTMA) warned that the country’s textile exports could fall below $1 billion a month from 2023 onwards, requiring government intervention to save the sector from collapse.
“Across the country, the textile industry is currently utilizing less than 50 percent of its capacity. Aptama, in a letter to Prime Minister Shehbaz Sharif, said there would be a huge loss of jobs if corrective action is not taken quickly. A number have already been exhausted and many more will follow.
The Pakistan Hosiery Manufacturers and Exporters Association (PHMEA) in a statement last month also expressed serious concern over the declining trend in textile exports.
The association said textile exports during the first four months of July-October of the current fiscal year fell by 1.34 percent to $5.941 billion from $6.021 billion in the same period last year.
