Ideal Spinning Mills shuts its looms on cost crunch

Ideal Spinning Mills Limited (PSX: IDSM) has become the latest casualty of the sector‑wide squeeze on Pakistan’s once‑thriving textile industry, announcing the closure of its core spinning division and the planned sale of most of the segment’s plant and machinery. The dramatic retreat, disclosed in a notice to the Pakistan Stock Exchange on Friday, will leave the company relying on its weaving and socks businesses while it waits for market conditions to improve.

In a board meeting held on 11 July 2025, directors “approved the sale/disposal of the spinning segment’s major portion of plant and machinery,” according to the regulatory filing. Management cited “unfavourable market conditions” and “rising costs of operations” that have rendered the yarn‑manufacturing unit loss‑making for several quarters. Despite export rebates and an uptick in global cotton prices, local energy tariffs, high working‑capital costs, and subdued demand have combined to push the segment into negative gross margins. The board will now convene an Extraordinary General Meeting (EoGM) to seek shareholder approval for the asset sale and to formalise the permanent shutdown of the spinning sheds.