Another entity on Wednesday decided to shut operations amid the rising cost, as the Kohinoor Spinning Mills Limited went for closing down production activities with immediate effect.
The decision will render well over 2,500 workers jobless directly with many more being affected indirectly in a market where employment opportunities are scarce and purchasing power is shrinking even if you are employed.
In this connection, the Kohinoor Spinning Mills Limited management informed notified the Pakistan Stock Exchange about the move while citing multiple reasons.
The management says it is no more viable to operate the production facility due to the prevailing global and economic downturn, overdue plant maintenance, high cost of production, and low price and demand.
Moreover, the period of suspending the production is mentioned but it is surely not for days or weeks as the Kohinoor Spinning Mills Limited expressed the hope that the situation would improve in the first quarter of 2023, enabling the company to restart the operations.
Earlier, three companies, which also listed on the Pakistan Stock Exchange, shut down their operations, resulting in unemployment of at least 1,500 workers for the same reasons.
The three companies in question are: Frontier Ceramics Limited (FRCL), Bolan Castings Ltd (BCL) and Baluchistan Wheels Ltd (BWL).
On Monday, the Frontier Ceramics Limited (FRCL) in a notification issued to the Pakistan Stock Exchange, mentioned energy shortages and cost, government restrictions and economic instability as the reasons behind the move.
“The unforeseen devaluation of rupee coupled with the government’s restrictions, including letter of credit (LC) approval constraints and general economic instability are also the reasons behind the decision,” it read
However, the Frontier Ceramics noted that they would keep the bourse posted about the resumption of production when the decision was to be taken.
Similarly, the Bolan Castings Ltd – the makers of various auto parts of tractors and commercial vehicles – informed the Pakistan Stock Exchange about suspending the production activities from Dec 5 to Dec 23. It cited the drop in sales due to a drastic fall in orders from its assemblers as the reason.
Its revenue had plunged to Rs474 million during the first three months of the current financial year from Rs621 million when compared with the last fiscal year.
On the other hand, the production activities of Baluchistan Wheels Ltd – the makers of steel wheel rims for cars, heavy vehicles and farm tractors – said the production activity would remain suspended from Dec 12 to 23 amid a reduced demand.
Earlier, the company’s revenue had dipped 26 percent to Rs403 million in the first quarter from Rs547 million in the same period last fiscal year.
These are just an examples of well-established manufacturing companies as thousands of people are rendered jobless in Pakistan with small and medium businesses finding it difficult to sustain amid alarming inflation, reduced demand, rising costs and shrinking purchasing power.
And it doesn’t stop there with many large enterprises opting for downsizing in a market where there are very few new job opportunities.