Pak Suzuki Extends Plant Shutdown Yet Again

Pak Suzuki has once again announced an extension in its plant shutdown due to a shortage of CKD parts in hand. This is the fifth time the company has announced a plant shutdown schedule amid restrictions imposed by the State Bank of Pakistan (SBP) on the non-essential imports.

SBP introduced a mechanism for prior approval for import under HS code 8703 category (including CKDs) vide circular No 09 of 2022 dated May 20, 2022. These restrictions had adversely impacted the clearance of import consignments which resultantly affected inventory levels.

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Pak Suzuki has already observed non-production days on the 8th and 9th of September. Whereas last month, the company kept its plant shut from 18th & 19th, then from 22nd to 26th, and then 29th to 31st August. According to the latest notification:

“Due to the shortage of inventory levels, the management of the company had decided to shut down the automobile plant till September 9, 2022. However, due to the continued shortage of CKD & raw materials, the management has decided to extend the date of shutting down the plant from September 12, 2022 to September 16, 2022”

Additionally, in lieu of periodic maintenance, the Suzuki plant will also remain shut from September 19, 2022 to September 23, 2022, the notification added. The motorcycle plant, however, will remain operational and any further updates in this regard will be communicated by the company accordingly.

Some analysts believe the maintenance shut down is also part of the shortage of inventory, otherwise the maintenance work could have been carried between the shutdowns of 12th and 16th September to ensure smooth output resumption. However with lack of parts in hand, the company cannot resume production operations. This will also means that the Suzuki plant in total, will remain idle for more than 20 out of 35 days, between 18th August and 23rd September.

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Analysts fear this will put pressure on local vendors. According to former PAAPAM chairman, Mashood Ali Khan highlighted that “the auto industry is facing the challenge of unavailability of CKD parts.” This is the case for all OEMs, we have been witnessing this for the last two months and there is no hope in sight, he lamented.

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