Nishat Chunian to temporarily shut down its spindles amid market crises

• Textile giant Nishat Chunian Limited (NCL) will partially shut down its spindles in January.
• Closure comes at a time when Pakistan is confronted with various obstacles.
• Kohinoor Spinning Mills Limited (KOSM) shut down its production facility earlier this month.

The textile giant Nishat Chunian Limited (NCL) stated on Wednesday that, beginning in January, it will partially shut down its spindles due to market conditions.

This event occurs at a time when Pakistan is confronted with various obstacles, such as mounting debt, limited foreign exchange reserves, and an energy deficit, causing businesses to close or reduce their operations.

The textile producer informed the Pakistan Stock Exchange (PSX) in a statement that the spindles would resume operations once market conditions improved.

“The company has an installed capacity of 219,528 spindles and 2,880 rotors in its spinning division. The company has decided to temporarily close 51,360 spindles after one month, due to current market conditions,” said Nishat.

“However, the remaining units are operating normally,” it said. “The company will restart these spindles as soon as market conditions improve.”

NCL is a public limited company that was set up in Pakistan under the Companies Ordinance, 1984, which has since been taken away.

The company makes money by spinning, weaving, dying, printing, stitching, processing, doubling, sizing, trading, and dealing in yarn, fabric, and finished goods made from raw cotton, synthetic fibre, and cloth. It also makes, moves, and sells electricity because it makes, moves, and sells it.

The textile industry, which still brings in the most money for Pakistan from exports, is also feeling the effects of the slowing economy.

The All Pakistan Textile Mills Association (APTMA) said a few days ago that the country’s textile exports could drop below $1 billion a month starting in 2023. They pointed out a number of problems in the sector, which is currently only using about 50% of its capacity.

In a letter to Prime Minister Shehbaz Sharif dated December 23, 2022, APTMA’s Patron-in-Chief Gohar Ejaz said that the drop was caused by problems with the supply chain, a lack of cash, energy shortages, and new projects that weren’t working.

This month, Kohinoor Spinning Mills Limited (KOSM), which makes and exports yarn, cloth, and stitched cloth, decided to temporarily shut down its production facility without saying how long it would be closed for.

“Due to prevailing global and economic downturn, overdue plant maintenance, high cost of production and low demand, it is not feasible to operate the production facility.

“Therefore, the management of the company has decided to temporarily close/stop the production activities of the company with immediate effect,” said the textile company back then.

Last month, the Pakistan Hosiery Manufacturers and Exporters Association (PHMEA) was very worried about the trend of textile exports going down. They asked for the continuation of the Duty Drawback of Local Taxes & Levies (DLTL) Scheme to help the country’s exports grow, as well as the release of 2019-20 claims that had been held up under this scheme.

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