On Jan 10, Diamond Industries Ltd announced that it has halted production until further notice due to the unfavorable state of the economy and the lack of imported raw materials.
What you need to know:
Due to a cash crisis in the dollar market, the government has made it impossible for industrial units to import raw materials. They are banning all imports in an effort to reduce the outflow of money, which is forcing industrial shutdowns across the country.
Crescent Fibres Ltd., which recently announced a production cut of up to 50% due to widespread demand destruction, is followed by Diamond Industries. Earlier, Kohinoor Spinning Mills Ltd, Nishat Chunian Ltd, and Suraj Textile Mills Ltd also announced production reductions, in part due to high operating expenses and weak demand.
Analysts contend that the central bank’s policy to limit imports of industrial inputs in an effort to save money is counterproductive, particularly given that imports of consumer goods continue in some capacity.
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