Ahmed Mukhtar Naqshbandi/Monitoring Desk
ISLAMABAD/KARACHI: The Pakistan steel industry has set off the alarm bell, warning of business closures and widespread job losses as banks failed to open letters of credit (LCs) for imports.
The Pakistan Association of Large Steel Producers (PALSP) has said that the shortage of raw materials due to the inability to open LCs had led to production delays and financial losses for firms despite recent relief announcements by the government.
Steel industry
Wajid Bukhari, PALSP Secretary General, said that the steel industry was facing a critical situation as the State Bank of Pakistan (SBP) failed to compel commercial banks to open LCs, resulting in the closure of numerous steel businesses. He urged the federal government and the SBP to take immediate measures to resolve the crisis and ensure the survival of the steel industry.
Baukhari said that steel was a vital sector for Pakistan’s economy, contributing over 5 per cent to the country’s GDP and providing jobs for over 200,000 people with an annual production capacity of over 5 million tonnes.
He said that current issues forced several steel companies to reduce production and shut down operations. “If there is no steel, approximately 7.5 million jobs could be at stake, and there is the possibility of closure of cement and industries associated with a construction sector within a few weeks.
He cautioned that Pakistan’s steel production may slump by over 50 percent next year, with devastating consequences for the economy and ordinary citizens.
Bukhari said, “we need a circular to be issued immediately, allowing manufacturers to import raw material, albeit at curtailed levels.”
