May Day blow: firm shuts plant, sacks workers

Citing policy uncertainty, mounting losses, company halts operations at CPEC-linked free zone

KARACHI:

In a move heavy with symbolism on International Labour Day, a Chinese company operating in Gwadar Free Zone has announced the closure of its factory and termination of all employees, citing an unworkable business environment and sustained financial losses.

Hangeng Trade Company said in an official statement that "non-commercial factors" and operational hurdles had made it impossible to continue operations. Despite meeting international export standards, the firm said its shipments remained stalled, pushing the business into a loss-making position.

The company claimed it had remained in contact with authorities for the past three months but saw no resolution, forcing it to take the drastic step. It added that all dues, including three months' salaries, penalties, electricity bills, and container demurrage charges, have been cleared before the shutdown.

While reaffirming that Pakistan and China remain strong economic partners, the firm noted that Gwadar is a flagship project under the China-Pakistan Economic Corridor (CPEC) and that its investment was made in the spirit of bilateral cooperation. However, it stressed that a "clear and workable policy environment" is essential for sustaining business operations.

The company also thanked the Government of Pakistan and the Ministry of Planning for promoting Pak-China economic ties but cautioned potential investors to carefully assess uncertainties before committing to ventures in Gwadar.

The announcement comes ahead of the prime minister's expected visit to China later this month for a business-to-business investment forum, adding to concerns over investor confidence and the broader outlook for foreign-backed projects in the region.

The company expressed regret over the layoffs, stating it could no longer provide employment under current conditions.