An increase in the cost of production and low demand amid the ongoing economic downturn has pushed another company in Pakistan to “temporarily” shut down its operations.
Kohinoor Spinning Mills Limited (KOSM), a manufacturer and exporter of yarn and cloth, and stitched cloth, on Thursday, informed the Pakistan Stock Exchange (PSX) that it has decided to temporarily close its production facility, refraining from giving a timeline on the length of the shutdown.
“Due to prevailing global and economic downturn, overdue plant maintenance, high cost of production and low demand, it is not feasible to operate the production facility.
“Therefore, the management of the company has decided to temporarily close/stop the production activities of the company with immediate effect,” said the textile company in its notice to the PSX.
The company said it remains hopeful that the current situation will improve in the first quarter 2023, enabling the company to restart its operations.
Incorporated on 23rd July, 1970 as a public limited company in Pakistan under the Companies Act, 1913 (Now Companies Act 2017), Kohinoor Spinning Mills Limited remains engaged in the business of textile spinning.
The development comes as Pakistan faces multiple challenges, including rising debt, low foreign exchange reserves, and energy shortage.
The textile sector, which remains Pakistan’s largest generator of export receipts, is feeling the heat as well.
The country’s textile group exports witnessed a decline of 15.23% in October 2022 on a year-on-year basis and remained at $1.36 billion when compared to $1.6 billion during the same month of last year.
On a month-on-month basis, the textile group declined 11.13% compared to $1.53 billion in September 2022.
Experts attributed the decline to a recession in the west –- mainly in the US — that is curbing demand.
Last month, Pakistan Hosiery Manufacturers and Exporters Association (PHMEA) expressed serious concern over the declining trend in textile exports and called for the continuation of Duty Drawback of Local Taxes & Levies (DLTL) Scheme to ensure growth in the country’s exports, besides releasing the stuck up claims of 2019-20 under this scheme.
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PAKISTAN
Musadik Malik reiterates Russia will provide Pakistan crude at ‘discounted rates’
State minister says govt working with Azerbaijan on a gas purchase framework agreement as well
BR Web Desk Published 16 Dec, 2022 05:05pm
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State Minister for Petroleum Musadik Malik on Friday reiterated Russia will provide Pakistan crude oil at discounted rates.
Addressing a press conference, Malik said Russia would provide Pakistan crude at a discount, similar to what the energy giant is giving to other countries in the world. “It (discount) could be greater than being given to others,” he added.
The remarks come a day after Foreign Minister Bilawal Bhutto-Zardari, during an interview with journalist Amna Nawaz on PBS Newshour, said: “As far as Russia is concerned, we aren’t pursuing or receiving any discounted energy, but we are facing an extremely difficult economic situation.”
When asked about the $60-per-barrel cap imposed by the Group of Seven states and the European Union on Russian seaborne oil over Russia’s war in Ukraine, Bilawal added: “Up until now we actually haven’t received nor are we getting any oil from Russia.”
“As far as discounted rates, no one is giving discounted rates for oil these days,” Bilawal told reporters at the United Nations. “That’s not a reality. It is true that we’re actively pursuing ways and means to address the energy shortfalls and difficulties we’re facing in Pakistan.”
Meanwhile, Malik, who had earlier this month stated that Russia will provide cheaper oil, on Friday shared that refineries in Pakistan could process Russian crude — Siberian Light and Ural Light. The ability of Pakistan’s refineries to process Russian crude is being cited as a reason behind Islamabad’s inability to purchase oil from Moscow.
“Pakistan Refinery Limited (PRL), owned by Pakistan State Oil (PSO), told us that they could utilise up to 50% light crude of Russian origin. Similarly, PARCO has told us that they could utilise up to 30% of Russian crude.
“Whereas, Cnergyico, the third largest oil refinery in the country, could not only process these two (Siberian Light and Ural Light) crudes but also heavy crudes as well.
“We will get these light crudes from Russia on a discount,” added Malik.
The state minister said discounts on finished products including diesel and petrol would also be negotiated with the Russian delegation, scheduled to visit Pakistan next year.
A Pakistan-Russia Inter-Governmental Commission (IGC) meeting is scheduled to be held in the second week of January. The Russian energy minister is expected to visit during the meeting.
Malik added that the government has also revived its relations with Turkmenistan on the TAPI project, which “could provide us with 1.3bcf of gas”.
“A special strategic cell has been established in the Ministry to follow up these projects,” he said.
On liquid natural gas (LNG), Malik said the government is working with Azerbaijan on a gas purchase framework agreement, which is being drafted. “Under this framework, we would have a government-to-government level agreement with the State Oil Company of Azerbaijan Republic, largely known as SOCAR,” he said.
“SOCAR will provide us with distressed cargoes on a monthly basis, and the Government of Pakistan would have the option to purchase these cargoes at given rates or not. “This will help us increase our gas supply,” he said.
The minister said that SOCAR has already offered Pakistan LNG cargo for December 14. “However, we were unable to purchase it as both our terminals were not available,” he said.
The government also remains in talks with the UAE to reach an agreement, under which cargoes of diesel and petrol can be purchased.
“I want to reiterate that the policies of the current government are meant to alleviate hardships of poverty-ridden masses,” said Malik.
He said that despite a 10% annual decline in gas reserves, the government is providing more gas to its consumers in comparison to last year. ”We will have an additional cargo of gas in the coming months of January and February, in comparison to the same period in 2022,” he said.
“We are also bringing in 20,000 tons LPG in addition to facilitate our consumers.”
