Millat Tractors Shuts Down Production in Pakistan

Pakistan’s biggest agricultural machinery manufacturer, Millat Tractors Limited, has announced to shut down production from 6th January 2023 till further notice, citing reduced demand and cash flow problems.

Since 16th December 2022, Millat Tractors was observing Fridays as non-production days (NPDs). In its latest regulatory filing, the company stated:

“Due to continuing reduced demand for tractors and cash flow constraints, the company will remain closed from Friday January 6, 2023 till further notice.”

A number of auto part vendors have suspended operations in recent months, citing reduced demand and import curbs imposed by the State Bank of Pakistan (SBP) (that were lifted last week) among other issues. Bolan Castings Ltd (BCL), the makers of various auto parts of tractors and commercial vehicles, had announced NPDs from Dec 5-23 due to declining sales.

The production activities of Baluchistan Wheels Ltd (BWL), the makers of steel wheel rims for cars, heavy vehicles, and farm tractors, also remained suspended from Dec 12-23 due to depleting orders from the assemblers. According to BWL Chief Operating Officer Muhammad Irfan Ghani, the tractor industry has been facing a huge drop in production from July onwards due to the floods, restrictions on parts imports, delays in sales tax refunds, and uncertain exchange rates.

However, Millat Tractors’ problems precede the floods. The tractor maker also had to suspend operations in March last year due to a severe liquidity crunch. According to Millat, the entire tractor manufacturing industry was facing a severe liquidity crunch as the industry’s over Rs8 billion sales tax refunds were stuck with the Federal Board of Revenue (FBR) for the last two years.

Source: Dawn

Notify of
1 Comment
Inline Feedbacks
View all comments