As Pakistan continues to suffer economic losses due to the lack of external financing to acquire raw materials, Diamond Industries has halted operations until “the availability of raw material”.
In a notification to the Pakistan Stock Exchange (PSX) on Tuesday, Diamond Industries Company Secretary Zahoor Ahmad stated that the company had temporarily halted its manufacturing operations “due to unfavorable economic conditions in the country and the non-availability of imported raw material” with effect from Tuesday, January 10, 2023, until further notice, subject to the availability of raw material in the country. In comparison to 20 other recognized and unrecognized foam manufacturers, Diamond Industries, the maker of a well-known brand of foam, asserts to hold over 25% of the market share.
The plant’s installed capacity was stated as being over 12,000M tons annually. The company’s main business is producing and selling foam and PVA goods that are used domestically and in the industry. The company resumed its core manufacturing operations on May 1, 2021, following a lengthy period of closure due to legal proceedings. The company’s management planned to increase its activities and was setting up “new finance facilities” for the business. The company was taking the required steps to increase its market share by extending its commercial activities to maximize the wealth of its shareholders, according to the company’s 2022 Annual Report, which was issued just three months ago in October 2022.
The steep decline in the value of the Pakistani rupee relative to the US dollar and the sharp rise in the cost of fuel and electricity has caused the company to adjust its profit margins going forward. The company’s net profit for the three months that ended on September 30, 2022, increased to Rs12.64 million from Rs9.15 million in the corresponding period the year before. Pakistan’s foreign exchange reserves have decreased from $20 billion in August 2021 to just $4.56 billion now, which is just enough to pay imports for 25 days. Due to a scarcity of foreign currency, the government has been compelled to restrict its imports to necessities like food, medicine, and electricity.
In the midst of all of this, however, it has been reported that the government has approved the import of 165 high-end vehicles, even though numerous large industrial facilities are reporting shutdowns. Industrialists have complained that they aren’t given access to even $5,000 worth of goods. Due to the suspension of the IMF loan program, Pakistan’s financial situation is rapidly deteriorating. While the administration has asked the lender to ease some of the strict requirements set on the nation, the lender has instead requested that the nation adheres to the agreed-upon plans.
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