Pakistan Steel Producers' Association Requests for Relief Measures from Govt

Pakistan Association of large steel industries has submitted a request letter to Pakistan Government stating that country's steel industry is collapsing, therefore some important measures need to be taken immediately to provide relief and stimulus in order to avoid factories' closures and unemployment.

"Since Pakistan's steel industry was already witnessing a major downturn, the current lockdown is creating a severe pressure on the cash flow, making default and bankruptcy imminent", the letter said.

Measures suggested to avoid default and bankruptcy-

-- Interest on all banking loans should not be accrued for the period of the lockdown

-- Interest rate should be reduced to 5% immediately

-- Minimum turnover tax should be reduced to 0% for manufacturing entities and their downstream retailers/traders

-- All power and gas bills due in April should be payable in 3 equal installments from the date that the lockdown ends

-- Corporate Rating agencies should be asked not to downgrade any ratings of the company for the next one year

-- Banks should be asked not to reduce or seize any banking line/limits of the manufacturing entities for next one year

Measures to inject liquidity and stimulus:

-- Interest free loans should be given to manufacturing entities with a limit equal to 15% of last declared annual revenue, for a period of six months

-- Abolish duties (RD, CD, ACD) on steel industry's primary raw materials, having following PCT codes: 7204.3000, 7204.4990, 7204.4100, 7202.1100, 7202.2100, 7202.3000

SteelMint learned from its credible sources that Pakistan steel and scrap trades have nearly come to a halt due to lockdown imposed owing to COVID-19. This has resulted in mills suspending operations. As per reports, some of the major industrial units which have suspended operations include - Indus Motor Company, Pak Suzuki Motor company, DG Khan Cements etc.