FAISALABAD: Rising energy tariffs and markup rates have significantly increased the cost of production, resulting in the closure of over a hundred small and large factories in Faisalabad.
As per the details, operational textile mills have reduced their production by 40%. Recently, a unit of Satara Textiles was shut down, resulting in another 900 employees losing their jobs.
Chaudhry Salamat Ali, group leader of Pakistan Hosiery Manufacturers and Exporters Association, said on Saturday that 150,000 to 200,000 workers in the city have become unemployed due to the closure of these textile units.
He warned that if the government does not bring down electricity and gas prices and bring down the markup rate to single digits, even the mills that are running will be shut down.
Ali added that most factories have stopped receiving new export orders and are only working on existing orders, with more factories expected to shut down by next month.
Pakistan Textile Exporters Association Patron General Khurram Mukhtar pointed out that global conditions are currently favorable for export growth, as many American and European brands are moving away from China, and the situation in Bangladesh is affecting Pakistan’s exports. An increase is expected. Orders
He urged the government to take advantage of this opportunity to reduce energy rates immediately and reduce the mark-up rate to at least 14 percent.
Mukhtar highlighted that the increase in taxes and delay in refund payments are causing widespread frustration in the industry which calls for immediate action. He said Pakistan’s exports last month were $1.2 billion, though they could easily reach $2 billion.
He emphasized that although there are opportunities in the global market and Pakistan has the necessary raw materials, productivity and infrastructure improvements in the business environment are essential for economic stability and job creation.
Mukhtar advised industrialists not to lose hope, as the government is actively working to reduce energy costs. He urged the government to step up its efforts and provide an immediate road map to address the frustrations of the industry. He criticized the recent budget for raising the advance tax on exporters to 2 percent, while the domestic textile business rate remained at 1 percent.
He demanded an end to this discrimination and said exporters were already paying an additional 0.25% export development surcharge, which should be stopped until the amount previously collected was utilised.
He also highlighted that the scheme exempting exporters from general sales tax on local purchases had been scrapped and should be reinstated immediately as it does not involve payment of tax.
