After giant car assemblers, the country’s biggest agricultural machinery manufacturer, Millat Tractors Limited, shut down production citing the slump in demand and cash flow restraints. The company has announced a production cut from January 6 till further notice.
The company’s notice stated, “Due to continuing reduced demand for tractors and cash flow constraints, the company will remain closed from Friday, January 6, 2023, till further notice.”
It is pertinent to mention that this is not the first time company has halted production. Previously, Millat tractor observed non-production days in Dec 2022 in the face of the same reasons. Bolan casting Ltd (BCL), the manufacturer of tractor auto parts, announced production cut last month. Following its peers, Baluchistan Wheels producing steel wheel rims for cars, did same from Dec 12-23. And again, the reason was sinking orders and demand from assemblers.
Pak Suzuki Shut down Its Production plant
A few days after Indus Motor Company (IMC) announced a temporary shutdown of its production plant, Suzuki Pakistan took the same step. In a notification, Suzuki said the State Bank of Pakistan (SBP) had introduced a mechanism for prior approval to import CKDs. “Restrictions have had adversely impacted clearance of import consignment, which resultantly affected the inventory levels,” the company said.
Therefore, due to a shortage of inventory level, the management of the company has decided to shut down its plant for automobiles as well as motorcycles from January 2, 2023, to January 6, 2023. “Further update, if any, in this regard will be communicated accordingly,” the notification read.
Since the restrictions on Letters of Credit (LCs) by SBP, the auto industry has been facing tough times. The policy has impacted not only the production but also the supply and delivery to the consumers.
What do you think about the Millat Tractors Shutdown? Please share your thoughts in the comments section.
Its the industrialist fault in not investing in supply chains in Pakistan and relying on imported parts for manufacturing substandard and outdated machines. What do they expect. It was bound to happen. Any fluctuation in economy and they are to their knees.