FAISALABAD: The increasing prices of yarn and electricity coupled with non-payment by buyers have landed embroidery factory owners in a difficult situation as almost 50 percent of units in Faisalabad have been closed, a national daily reported.
These units are providing embroidered fabrics for men, women and children across the country and abroad as well. All Pakistan Embroidery Machine Association President Abdul Ghafoor said, “We have been trying to convince the government to focus on this segment having the potential to create thousands of jobs, however, the people at the helm seem unwilling to pay heed to our suggestions.”
As many as 3,500 to 4,000 units exist in Faisalabad and more than 500,000 people are directly and indirectly employed in this business. However, he said uncertainty due to the lockdown has hit the financial position of all these people. He said that a majority of the factories’ production had decreased by 50 percent. “We are trying to keep our workers engaged with us so that they can avoid financial hardships.”
He also said, “A few people are involved in importing the thread being used for the embroidery and they are deducting sales tax from the factory owners. It’s ironic that these importers are not registered with the FBR which means that they are involved in tax evasion.”
Mian Abdul Khalid, secretary information of the association, said the prices of yarn surged almost by 50pc during one year and similarly electricity unit rate increased from Rs16 to Rs28. He said the factory owners were finding it hard to run their units as no relief package has been announced for the sector. “We are suffering a lot as we have no lobby in the power corridors like some other influential associations,” he said adding closure of the sector would lead to unemployment.
The government had promised that sales tax imposed on our raw material would be reduced to a single digit, “although we had been demanding zero-rated facility like it was a couple of years ago. However, he said the government did not fulfill its promise,” he said.
Like Faisalabad, he said, the embroidery factory owners of Lahore, Gujranwala, Multan, Peshawar, Sheikhupura, Hafizabad and other areas were also in trouble and thinking to close their units to avoid further financial losses. “We are the biggest SME sector and nobody at the government level could realise the potential of this segment for jobs creation,” he added.
Information secretary Khalid said that owing to uncertainty, a number of customers had also stopped placing consignments and not releasing the payment of [completed] orders which has further squeezed the cash flow.
