Pakistan’s driving vehicle constructing agent, Indus Engine Organization (IMC), Monday reported a 10-day plant closure — the third time in the active schedule year — because of “obstacles in import and leeway of transfers”.
From December 20 to December 30 (inclusive), the production plant will be completely shut down, according to a notice sent to the Pakistan Stock Exchange (PSX) by the company.
According to the management of the IMC, a procedure for obtaining prior approval for the import of completely knocked down (CKD) kits and components of passenger cars (classified under HS Code 8703) for the automotive industry was introduced by the State Bank of Pakistan (SBP) in May.
The IMC stated in the notice that “[t]he delay in aforementioned approvals for the company and its vendors has created hurdles in import and clearance of consignments for raw materials and components of the company.”
The company stated, “This has resulted in insufficient inventory levels and consequently created an adverse impact on the supply chain and production activities,” stating that it is unable to continue producing goods.
Since coming to power, the coalition government has been working to reduce imports in the face of rapidly diminishing foreign reserves, a weaker currency, and an expanding current account deficit. As a result, the rupee has lost more than 26% of its value this year.
Industries that rely on imported materials to complete finished goods claim that the central bank has delayed the clearance of letters of credit, preventing banks from importing materials due to a lack of dollars.
It should be noted that the IMC had announced a temporary shutdown of its production plant from September 1 to September 15 due to a delay in SBP approvals for the import of CKD kits and passenger vehicle components and insufficient inventory levels to maintain production.
Additionally, the business had shut down its manufacturing facility earlier in the month, from August 1 to August 13, 2022.
