Colony Textile Mills Limited has announced its decision to close down its weaving division effective January 31, 2025, citing multiple prevailing challenges. The decision was disclosed in a notification sent to the Pakistan Stock Exchange on Wednesday.
The textile firm shared this development through a notification to the Pakistan Stock Exchange (PSX) on Friday in accordance with the requirements of Sections 96 and 131 of the Securities Act, 2015, and Clause 5.6.1 of the Rule Book of the PSX.
“In view of the multiple prevailing challenges as described in the Company’s earlier reports, the Company has decided to shut down its “Weaving Division” w.e.f. 31st January 2025,” read the notification.
The management of Colony Textile is, however, looking for different sustainable plans for the division and is considering running the unit either in parts or whole in case of any viable opportunity, the company said.
Pakistan’s textile industry, the largest export sector, is grappling with a severe crisis fueled by rising electricity costs. According to a recent report, 187 out of 568 textile mills have ceased operations, underscoring the sector’s dire state. Punjab, the country’s key textile hub, has been hit hardest, with 147 mills closing in the province. Sindh and Balochistan have seen 54 closures, while six mills have shut down in Khyber Pakhtunkhwa.
The closures include man-made fiber, polyester, and waste mills, with key districts in Punjab experiencing significant losses. Kasur saw 47 mills shut down, followed by 33 in Multan, 31 in Faisalabad, 17 in Sahiwal, and 11 in Sheikhupura.
Industry sources attribute the closures to surging electricity prices and worsening economic conditions, making it increasingly challenging for textile mills to sustain operations.
Despite these challenges, the Pakistan Bureau of Statistics (PBS) reported a 9.67% growth in textile exports during the first half of FY2024-25, reaching $9.084 billion compared to $8.283 billion in the same period last year. However, the industry’s growth trajectory now faces significant risks as mills continue to shut down.
The All Pakistan Textile Mills Association (APTMA) has called for immediate government intervention, emphasizing the need to restore a level playing field for local inputs and ensure timely, complete refunds for exporters. APTMA has warned that without swift action, the backbone of Pakistan’s exports may suffer further setbacks, jeopardizing the country’s economic stability.
