Factory owners drop shutters, head to Lahore

Disrupted gas, water supply, non-availability of raw materials, financial crunch push industries to Punjab


RAZZAk ABRO September 03, 2021

KARACHI:

The closure and shifting of hundreds of industrial units in recent years has meant a severe blow to Sindh’s already flailing economy. Most of these factories, set up in the provincial capital of Karachi, had been compelled to drop their shutters in the middle of deteriorating law and order conditions and other factors that made operating in the financial capital an up-hill battle.

According to official data, at least 216 industrial units were shut down between 2016 to 2018. Some 90 of those were set up in Karachi. The Sindh industries and commerce department had recently told the provincial assembly that the closure of said industries has been primarily linked to the financial struggles.

Different factors contributed to the closure and shifting of industrial units, said Pakistan Employers Federation of Pakistan President Majeed Aziz, speaking to The Express Tribune. The increase in the cost of production due to inflation and devaluation of the Pakistani rupee is one of them, he said, adding that the number of factories that shut down was higher than stated in official records.

Aziz believes that the inflow of products from China and other countries has also affected the local market besides Karachi’s industrialists have been haunted by law and order concerns in a city ravaged by crime. Frequent shortages of gas and water have also been paralysing for businesses, he said.

Similarly, All Pakistan Textile Mills Association (APTMA) Chairperson Asif Inam underscored that the government’s indifference towards the crisis brewing in the industrial sector exacerbated the situation. “It was for the same reasons that various textile factories had moved from other parts of Sindh to Karachi in the first place, hoping to expand their businesses. But sadly, the provincial government failed to ensure consistent gas supply to the city’s textile industries.”

The Punjab government on the other hand, said Inam, has provided industries an environment that is more conducive to growth. “The scenario is entirely different in Lahore. The industrial area there is as busy as Karachi’s and is welcoming those who’re shutting their factories in the port city.”

Records of the Sindh industries and commerce department show that there were 592 textile factories in the province. Most of them, 541 to be precise, were operational in Karachi. Of these, 516 were in Karachi SITE (Sindh Industrial Trading Estate) and 25 in Ahsanabad area. Of the remaining, 31 textile factories were operational in Nooriabad, 15 in Kotri and five in Hyderabad SITE.

“Around 25 to 30 per cent of textile units have shifted from Karachi to Lahore in the past 15 years”, said Saleem Saleh, a spokesperson of the APTMA. He said that the initial migration of businesses to Lahore happened due to the rampant violence and worsening law and order situation in Karachi. But even after the situation was more stable, the process continued. “Now, it is the non-availability of raw material, gas and government’s policies that are pushing industries out of the financial capital.”

Published in The Express Tribune, September 3rd, 2021.

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