Tiles industry demands reversal of gas price hike

Insists high energy prices will make industry uncompetitive

LAHORE: The All Pakistan Ceramic Tiles Manufacturers Association has asked the government to withdraw the increase in gas prices as it will make locally produced tiles uncompetitive in domestic and global markets and will lead to massive unemployment.

In a statement on Wednesday, a spokesman for the association said the tiles industry was in its revival phase and expected relief measures from the government in the face of difficulties arising from higher energy prices, high tax rates and the extremely low Import Trade Price of tiles imported from China in addition to huge inflows of smuggled tiles from Iran.

He urged Finance Minister Asad Umar and Petroleum Minister Ghulam Sarwar Khan to revert the hike in natural gas tariff. The gas price for general industrial and captive power plants has been raised by 30% from Rs600 per million British thermal units (mmbtu) to Rs780 per unit.

“This announcement is likely to have a negative impact on direct and indirect employment (of over 50,000 people) in the tiles industry,” he said. “It will stall growth in the construction sector which is booming on the back of rapid urbanisation and construction of malls, office buildings and apartments across the country, thus making all the efforts for employment generation a futile exercise.”

He lamented that the increase in gas tariff would also halt all expansion and investment projects of the industry, which would hamper transfer of technology and creation of a skilled labour base and vendor industry.

“The industry intends to invest in capacity enhancement to further raise its production in order to meet demand, if the government provides support,” the spokesman emphasised.

He said the industry had already been hit by a huge influx of smuggled tiles and imports at lower valuation, which captured approximately 40% of the country’s tiles market of nearly Rs80 billion while domestic manufacturers continued to suffer. 

Published in The Express Tribune, September 20^th, 2018.

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