Indus Motor Company (IMC), Pakistan’s top automaker, announced on Monday that its plant would be shut down for 10 days for the third time this year due to “hurdles in import and clearance of consignments.”
The production facility will be completely shut down from December 20 to December 30 according to a notice the company sent to the Pakistan Stock Exchange (PSX) (both days inclusive).
The IMC management reported that the State Bank of Pakistan (SBP) introduced a procedure in May via a circular for obtaining prior approval for the import of completely knocked-down (CKD) kits and components of Passenger cars (HS Code 8703 category) for the auto industry.
“[However,] the delay in aforesaid approvals for the company and its vendors has created hurdles in import and clearance of consignments for raw materials and components of the company,” the IMC said in the notice.
“This has resulted in insufficient inventory levels and consequently created an adverse impact on the supply chain and production activities,” the company said, adding that it is unable to continue its production activities.
The coalition government, since reigning into power, has been trying to curb imports in the face of fast-depleting foreign reserves, a declining currency, and a widening current account deficit, because of which the rupee has lost over 26% of its value this year.
The decision has had a knock-on effect on sectors of the economy that depend on imports to complete finished goods, according to those sectors, which claim that the central bank has delayed the clearance of letters of credit as banks are struggling to raise money, which limits their ability to import raw materials.
Be aware that the IMC had previously announced a temporary shutdown of its manufacturing facility from September 1 to September 15 due to insufficient inventory levels to support production as well as a delay in SBP approvals for the import of CKD kits and passenger vehicle components.
The company also shut down its plant earlier in the current month from August 1 to August 13, 2022.
