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Oct 11, 1999

  1. International
  2. Finance
  3. Industry
  4. Policy
  5. Trade
  6. Gulf

Ginning factories suspending operations

The cotton crisis is worsening with more ginning factories suspending their operations and stopping buying phutti at the recently government-fixed price of Rs825 per maumd.

Ginners say they are not on a strike but have only stopped to buy phutti because it is not economically viable to purchase it at the new price.

'We cannot afford buying phutti at Rs825 per maund and selling cotton lint for Rsl,936. The government-fixed lint price does not include ginning expenses of Rs300 per maund. The cotton lint rate should be set close to Rs2,200 per maund. Otherwise, it will not be possible for ginners to survive,' Pakistan Cotton Ginners Association chairman Sheikh Mohammad Saeed told.

Some 202 ginning factories in Punjab and 103 in Sindh are said to be operating at the moment out of a total of 1,000 units in the country. 'With the passage of time these units are suspending their operations because this business is no more viable at the present price,' Saeed said.

Tractor makers halt delivery

Tractor makers have suspended the tractor delivery to the farmers owing to non-release of funds by the Agriculture Development Bank of Pakistan (ADBP) amounting to over Rs one billion.

"We have stopped deliveries to the farmers from Oct 1 as the ADBP has yet to release Rs 680-700 million," an official in the Millat Tractors, makers of Massey Ferguson tractors, told from Lahore on Thursday.

Sugar production

Punjab may witness a shortfall in sugar production this year due to decrease in sugarcane acreage and poor condition of the crop.

The failure to achieve the production target will mean that the country will not be in a position to export sugar.

According to official figures, the area under sugarcane crop has decreased by 13%. This is mainly due to resentment among the farmers against sugar mills for non payment of their dues.

According to Punjab agriculture department's survey, 1,680,000 acres of land has been brought under sugarcane which is 13% less than the last year. Total production expected this year is about 29,240,000 tonnes which would be 41,43,000 tonnes less than the last year's yield.

New package of incentives proposed for investment

A five-member high-powered committee headed by the minister for finance and commerce has proposed a new package of reforms and incentives for industrial development and attracting foreign investment in the country.

"We are considering new concessions and incentives for the industrial sector, which will have constitutional protection at least for five years with a view to have consistency in economic policies", said the state minister for water and power and one of the members of Dar committee on economic revival, Haleem Siddique.

He said that Dar committee will give a comprehensive report to the cabinet shortly to revive the economy by adopting both long-term and short-term what he termed "viable and dynamic policies".

Ministers for water and power, labour and manpower and Deputy Chairman Planning Commission were the other members of the committee.

He said that confidence of the local and foreign investors could not be restored without having a piece of legislation. "And this legislation will prevent the government of Pakistan or the State Bank to use foreign currency accounts of the overseas investors", Haleem Siddiqui said.

EoI invited for HEC

The Privatization Commission of Pakistan has invited Expression of Interest (EoI) from local and international investors for prequalification in order to disinvest the Heavy Electrical Complex (HEC).

HEC is a greenfield project, which achieved full completion in June 1997. Located in Hattar Industrial Estate in the NWFP, HEC has excellent infrastructure facilities and access to skilled manpower.

The opportunity offers an instant access to Pakistan's Heavy Electrical Industry through a diversified product line which includes a market leader position in the manufacture of 132 KV and 66 KV transformers and equipment used in sub-stations and grid-stations of high voltage power supply systems.

Govt decides to revive 800 units this fiscal

The government has decided to revive 800 sick industrial units out of total of about 3000 units during the current financial year.

Initially, the government planned to pump in Rs10 billion to revive maximum number of sick units. While the government planned to make available some funds from its budget, it would ask the commercial banks to also lend money for this purpose.

Official sources said here on Monday that Dar committee on the revival of economy has identified 800 sick industrial units which could be revived within 1999-2000 by providing certain administrative and financial support.

These units will be revived in phases. Some of the industries, which were closed down due to various government's what was termed "ill and wrong decisions" in terms of reducing or increasing different duties and taxes, will be given preference.

He said that many of the industrial units became "nonviable" because of increase in duties on the import of raw cotton in the past. He said that the Dar committee believed that genuine industrialist who faced unnecessary problems will be provided all financial and administrative support. It was also said that many overseas Pakistanis, who had set up their industries in Pakistan but were forced to closed down because of the highhandedness of different excise and tax departments, will also be encouraged to revive their units.

Sources said that those sick units which could not be revived due to one reason or the other will be liquidated and declared bankrupt. "Then the government would invite the genuine industrialist to buy them and run them efficiently as they are doing with their own units", a source said.