The Indus Motor Company (IMC), which manufactures Toyota vehicles in Pakistan, has “completely” shut down its plant for two weeks following supply chain disruptions due to a ban on the import of raw materials.
In a letter addressed to the general manager of the Pakistan Stock Exchange (PSX), he IMC management said that its production will be shut down from June 3 to June 8 due “delay in opening of Letters of Credit (LC) and inventory shortages”.
Indus Motors said that its vendors continue to face hurdles in import of raw materials and receiving clearance of their consignments, on account of challenges in opening of LCs and supply chain issues.
“This has disrupted the supply chain and the vendors are unable to supply raw materials and components to the company. It has insufficient inventory levels to maintain production, therefore the company is unable to continue its production activities,” the letter said.
It added, “In view of the above, the company has decided to completely shut down its production plant from 3 June 2023 to 8 June 2023.”
Earlier in month of February Pak Suzuki Motor Company Ltd (PSMCL) announces plant shutdown from 13th to 17th February due to an economic crisis and Inventory shortage in the country.
“Due to continued shortage of inventory level, the management of the company has decided to shut down automobile plant from 13th to 17th February 2023,” stated a notice sent to the Pakistan Stock Exchange (PSX).
Pak Suzuki motors said that the company’s imports “adversely impacted clearance of import consignment which resultantly affected inventory levels”.
Remember that The rupee value has fallen in international market, inflation has reached high levels for decades and Pakistan’s economy has collapsed alongside a political crisis. However, devastating floods and a global energy crisis have added additional stress and harmed the country’s economy.
A shortage of imported parts and materials forces automotive and other industries to shut down their operations. Due to a shortage of foreign reserves, thousands of containers containing essential food items, raw materials, and medical supplies have been held up at the Karachi port.
Banks are refusing to issue new letters of credit to importers because they don’t have enough dollars.