Due to a fall in demand and cash flow concerns, Millat Tractors Limited, Pakistan’s largest manufacturer of agricultural equipment, said on Thursday that it would close down starting on January 6 until further notice.
The company will remain closed starting on January 6, 2023, until further notice, according to a regulatory statement, “due to continuously diminishing tractor demand and cash flow concerns.” Millat Tractors Limited has already declared that it would observe Fridays as non-production days (NPDs) before December 16. The State Bank of Pakistan (SBP) import restrictions, which were lifted last week, and decreased demand are just two reasons why several auto part vendors have stopped selling their products in recent months.
Recent demand destruction and market conditions have also caused certain textile enterprises, such as Nishat Chunian Limited, Crescent Fibers Ltd, and Suraj Textile Mills, to partially halt production. Due to dwindling sales, Bolan Castings Ltd (BCL), a manufacturer of numerous tractor and commercial vehicle auto parts, announced NPDs from December 5 through December 23. Due to a lack of orders from the assemblers, Baluchistan Wheels Ltd (BWL), a manufacturer of steel wheel rims for cars, trucks, and agricultural equipment, also continued to halt production from December 12 through 23.
According to BWL Chief Operating Officer Muhammad Irfan Ghani, the tractor industry has experienced a significant decline in production since July as a result of the floods, import restrictions on parts, backlogs in sales tax refunds, and volatile exchange rates. However, the issues at Millat Tractors started before the floods. Due to a severe lack of liquidity, the factory also stopped manufacturing in March. It had stated at the time that due to the over Rs 8 billion in sales tax refunds that had been held up with the Federal Board of Revenue (FBR) for the previous two years, the whole tractor manufacturing business was experiencing a serious financial crunch.
