Unpredictable tax policies could cause Engro foods to close down milk plant


Ali Ahmad Khan Managing Director of Engro Foods while attending the meeting of the Senate Standard Committee on Finance said that the company is considering closing down its Sukkur milk production plant. He mentioned “Our profitability has gone down dramatically after sales volumes plunged 20% for the first time in 10 years due to a sudden spike in tax liabilities.”

Engro Foods General Manager Corporate Affairs Rehan Saeed voiced his fears that due to uncertain tax policies of the government Friesland Campina which acquired a majority state of 51pc in Engro Foods for $450m may also consider closing down its operations. He mentioned that the closure of the Sukkur milk production plant will impact 30,000 farmers along with winding up of 30,000 milk collection centers.

Ahmad requested the government to reinstate the zero-tax regime which allows tax refunds on input purchases and urged them to also withdraw regulatory duty on the import of white milk which is used in tea whiteners. He said “Sukkur and Sahiwal milk production plants are working below 50% of their capacity” which may force them to close of these units in the not so foreseeable future.

The MD of Engro Foods stated that the public had started purchasing loose milk because of packaged milk having become more expensive in light of increased government taxation.

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