Business

Pakistan’s Toyota manufacturer shuts down plant for two weeks

Published

2 years ago

Farwa

Plant will be completely shut down from July 21 to August 3.
Company faces significant hurdles in importing raw materials.
It isn’t only automotive manufacturer affected by raw material scarcity.

KARACHI: Indus Motor Company Limited, a prominent player in Pakistan’s automotive industry and the manufacturer of Toyota vehicles, has temporarily closed its production plant for two weeks, The News reported Friday.

The decision comes as the company faces significant hurdles in importing raw materials, leading to disruptions in its supply chain.

Last month, Indus Motors experienced a brief shutdown of its production plant due to similar challenges with raw material imports.

However, the current situation has worsened, leaving the company with insufficient inventory levels to sustain its production activities.

The company secretary of Indus Motor released a statement to the Pakistan Stock Exchange, outlining the difficulties the company and its vendors are facing in importing raw materials and clearing consignments.

These challenges are primarily due to issues with opening letters of credit (LCs) and supply problems from certain foreign vendors.

As a result of these obstacles, the company has no choice but to halt its production activities temporarily.

The plant will be completely shut down from July 21, 2023, to August 3, 2023. Indus Motors is not the only automotive manufacturer affected by raw material scarcity.

Other prominent companies like Pak Suzuki Motors and Honda Cars have also experienced several shutdown days in recent months due to similar issues.

The automotive sector, along with other industries reliant on imported raw materials, has been grappling with these challenges due to a shortage of foreign exchange reserves in Pakistan.

The struggle to open LC has severely impacted the smooth functioning of the supply chain, leading to disruptions in production activities.

Indus Motors has a significant presence in Pakistan’s automobile industry and has invested $100 million in local production of hybrid electric vehicles (HEVs).

The company has played a crucial role in establishing the local automotive ecosystem, with over 50 part manufacturers contributing to the value chain by producing parts worth over Rs250 million every working day.

Additionally, the company has established 53 independently owned authorised dealerships that provide aftersales service to customers, generating employment opportunities for over 450,000 people directly and indirectly across Pakistan.

The temporary closure of the production plant presents challenges for the company, its employees, and the overall automobile industry.

The management of Indus Motor Company Limited is likely to be exploring solutions to address the raw material scarcity and resume operations as soon as the situation allows.

One analyst said the government and relevant stakeholders may also need to collaborate to find long-term solutions to ensure a stable supply of raw materials for the automotive and other affected industries.

Swift action and strategic measures will be essential to mitigate the impact of these closures on the economy and preserve the growth trajectory of Pakistan’s automotive sector.

Business

SFD and Pakistan Sign Two Deals Totaling $1.61BLN

Published

2 days ago

Farwa

Two agreements totaling $1.61 billion have been inked by Pakistan and the Saudi Fund for Development to improve their bilateral economic cooperation.

Business

Saudi Arabia and Pakistan sign an MOU to strengthen their auditing industry collaboration.

Published

2 days ago

Farwa

A spokesperson for the office of the Auditor-General of Pakistan (AGP) announced on Monday that the two countries have signed a Memorandum of Understanding (MoU) to strengthen cooperation in public sector auditing through improved cooperation between audit institutions of both countries, as well as training programs and the exchange of trainers.

This comes as a group from Saudi Arabia’s General Court of Audit (GCA), headed by GCA President Dr. Hussam bin Abdulmohsen Alangari, arrived in Pakistan on Sunday for a four-day visit.

The agreement was signed during AGP Muhammad Ajmal Gondal’s meeting with the Saudi delegates, aiming to strengthen audit cooperation, enhance knowledge-sharing, and improve governance, transparency and accountability in government spending.

Public relations officer Muhammad Raza Irfan of the AGP’s office told Arab News that the deal will further advance bilateral collaboration between Saudi Arabia and Pakistan in addition to enhancing professional ties between the two nations’ auditing institutions.

In a statement released from his office, AGP Gondal was cited as saying, “This collaboration marks a significant step toward fostering international cooperation in auditing.”

“The exchange of ideas and methodologies will undoubtedly strengthen our capacity to meet emerging challenges and set new benchmarks for public accountability.”

Discussions at Monday’s meeting focused on fostering closer ties between the Supreme Audit Institutions (SAIs) of Pakistan and Saudi Arabia, sharing innovative audit methodologies, and planning collaborative initiatives for the future, according to the AGP office.

The two parties decided to increase their knowledge of theme, environmental, and impact audits as well as to exchange best practices in audit standards, performance audits, and citizen participation audits.

The statement added, “It also agreed to exchange trainers, address new auditing challenges, plan cooperative audits, including a performance audit on the oil and gas sector in 2025, and work together on training programs.”

Both sides reaffirmed their shared commitment to promoting transparency, accountability and excellence in public sector auditing.

Business

The government chooses to continue the PIA privatization process.

Published

2 days ago

Farwa

The Pakistan International Airlines (PIA) privatization process will be restarted by the federal government, and expressions of interest would be requested within the month. Officials stated that the Prime Minister’s Committee on Privatization will convene to make the final decision.

Usman Bajwa, the secretary of the Privatization Commission, gave a briefing on the updated procedure to the National Assembly Standing Committee on Privatization. Additionally, he disclosed that airlines other than PIA are now able to compete with regional carriers thanks to IMF-approved aircraft tax concessions.

Farooq Sattar, the chairman of the privatization committee, underlined the importance of giving PIA workers at least five years of job security. Employee protection will continue to be a top priority and will be resolved prior to bidding, the Privatization Commission promised.

PIA’s liabilities totaling Rs650 billion have already been assumed by the government, and an additional Rs45 billion in outstanding debts must be paid before the privatization process can begin. As of the now, PIA has assets around Rs155 billion and liabilities worth Rs200 billion. It will be necessary for the new buyer to expand the fleet by 15 to 20 aircraft.

Additionally, the Privatization Committee has sought a timeline for the privatization of Faisalabad, Gujranwala, and Islamabad Electric Supply Companies. Officials stated that after the appointment of a financial advisor, the privatization process for these companies will accelerate.