Karachi October 11 2022: Pak Suzuki Motors Limited announced another shut down period of 3 days as company faces issues with opening of LCs due to restrictions of Central Bank, according to company filing to the exchange.
Earlier the company kept its plant shut for 10 days in August and 12 days in September as the State Bank of Pakistan (SBP) has introduced a mechanism for prior approval for import under HS code 8703 category (including CI(Ds) vide circular No.09 of 2022 dated May 20, 2022. Restrictions had adversely impacted clearance of import consignment which resultantly affected the inventory levels.
Therefore, due to shortage of inventory level, the management of the company has decided to further extend the shut down period of automobile plant from October 19, 2022 to October 21, 2022. However, motorcycle plant will remain operative.
Pak Suzuki has lost one third of its production since August 18 2022 due to restriction on opening of Letter of Credits by State Bank of Pakistan.
“Macroeconomic indicators of the country are still challenging for auto industry. Factors such as macro fiscal shocks, real interest rate movement, disruption in supply chain, higher commodity and energy prices along with volatility in Pak Rupee hindering the growth of industry” says Company Chairman Kinjo Saito.
Kinjo added, ” Auto industry supports the government to overcome the foreign exchange crisis. However, due to such restrictions, limited imports are allowed resulting in shortages of material for production. Consequently, forced us to opt for temporary shut downs.”
Kinjo is optimistic that foreign exchange situation of the country will improve considering the positive developments with regards to external flows.
Finance Minister said that this situation emerged due to bad governance and poor management of last regime, adding that foreign exchange reserves were reached to the lowest level leaving very narrow space for opening the LCs, adding that steps are being taken to address the grievances of local business community.
He said that he had held series of meeting and discussion with Governor State Bank of Pakistan (SBP) and asked him to compile a comprehensive value wise data in this regard before leaving for US to attend annual general meeting to facilitate the local business community.
The minister said that the SBP had compiled the data and as a first step it was decided that all the pending payments worth upto $50,000 would be cleared, adding that about 7,952 payments would be made, which would help to clear about about 52 percent pending LCs.
