- Production plant to remain closed from Dec 20 to Dec 30.
- This is the third time IMC temporarily shuts down production plant.
- Decision taken due to delay in import approvals from SBP.
Pakistan’s leading car assembler, Indus Motor Company (IMC), Monday announced a 10-day plant shutdown — the third time in the outgoing calendar year — due to “hurdles in import and clearance of consignments”.
The company, in a notice sent to the Pakistan Stock Exchange (PSX), revealed that the production plant will be completely shut down from December 20 to December 30 (both days inclusive).
The IMC management mentioned that the State Bank of Pakistan (SBP) introduced in May a mechanism, 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 sector.
“[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 move has had a cascading effect on industries that rely on imports to complete finished goods as they say the central bank has delayed the clearance of letters of credit with banks facing a shortage of dollars, affecting their ability to import materials.
It should be noted that the IMC had announced a temporary shutdown of its production plant from September 1 to September 15 on insufficient inventory levels to maintain its production, as well as on account of a delay in approvals from the SBP for the import of CKD kits and components of passenger vehicles.
The company had also shut down its plant earlier in the current month from August 1 to August 13, 2022.