Majority of the small soap manufacturing factories operating in the SME sector have been closed and the rest are at verge of the closure due to stoppage of import of Tallow from neighbour country coupled with the unjustified imposition of 7% Additional Custom Duty (ACD) on Palm Stearin in the last budget.
A serious concern over this situation was expressed by the Management Committee of Pakistan Soap Manufacturers Association (PSMA) the other day at a meeting presided over by its Chairman Mr. Zafar Mahmood.
The meeting observed that by banning the cheaper source of Soap Industry’s raw material and making the other source highly expensive through levy of ACD, the government had thrown the soap out of reach of the poor.
Consequently, the small factories, facing a drastic cut in demand, have closed down their operation leaving many workers out of jobs under the current difficult inflationary economy.
Chairman PSMA Mr. Zafar Mahmood said that the soap industry was using Tallow as raw material to produce laundry soap, which was being imported from India and after ban on imports from India in August last year, the import of Tallow was also banned.
The import of tallow in Pakistan is subject to Halal Certification and there is no other country from where halal certified Tallow can be imported, he said adding that Soap is a basic commodity to be used by every citizen of the country, especially laundry soap which is used by Pakistan’s poorest population, has suffered from the substantial increase in cost.
Currently, only big companies who have multiple product lines are surviving and the small to medium sized companies are either closed or are on the verge of closure which would further result into loss of thousands of more jobs, Chairman PSMA said and urged the government of Pakistan to immediately withdraw ACD on palm stearin, allow inedible Tallow for use in soap without the condition of Halal and if possible allow imports of Tallow from India as such relaxation has already been given to the pharmaceutical industry.
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