Tractor, allied industries threatened with total collapse  

Engineering Post Report

At least 300 tractor parts manufacturing small and medium enterprises (SMEs)  have been forced to shut down their units amidst a total crash in the tractors demand  along with a severe liquidity crunch  following  the suspension of refunds by the Federal Bureau of Revenue (FBR) to the tractor assemblers despite the bitter fact that it was due for a long time.

Due to the  shutdown of  the industrial units more than 100000 workers  have already been laid off  in and around Lahore  during this unprecedented crunch period which was very unfortunate.A large number of jobless persons  have also become  shelterless  following the closer of the units of  tractor and ancillary industries recently as they were facing the current crunch following the devastating rains and floods. 

According to the Pakistan Association of Automotive Parts & Accessories Manufacturers (PAPAM) sources, the closure of AGTL followed by Millat Tractors has further aggravated the situation.

Tractor production in the first six months of current financial 2022-23  was expected to remain  around 10000 units averaging  1600 units per month  which was far short of  the industry’s breakeven point. The sources maintained following the review of the aggravating situation by the top office-bearers of the PAAPAM that if the industry somehow do not achieve  3000 units of average production  per months in the remaining period of the current financial year  then the industry will not be able to revive in the future. The representative body was of the considered opinion that it was essential for the federal government  to take immediate and concrete   corrective measures forthwith rather just keeping waiting till the next budget.. The sources concluded by pointing out that the tractor exporters also needed to be facilitated by the federal government in the prevailing circumstances  as the current General Sales Tax (GST) regime was making Pakistani tractors totally non-competitive in the African market.