October 4, 2019 (MLN): Ghandhara Nissan Limited has sent out a notice to Pakistan Stock Exchange, informing that the news surfacing on electronic and social media regarding the plans of the company deviating with the disclosure made earlier today are misleading and have no authenticity.
The company went on to state that this seems a deliberate attempt to defame the Government by people having vested interest.
The Company had earlier informed PSX that it was not able to address the constraints in terms of a cost-efficient localization while ensuring compliance with import regulations to make a successful project for all the stakeholders.
‘Due to a substantial devaluation of PKR against USD, localization of parts has become mandatory to make the project viable. However, the technical evaluation study depicted that localization of some parts is either not possible or will take significant time and resources due to lack of technology and expertise in local market. Therefore, NML has been exploring options to get these parts developed at a minimum cost by global vendors so that they can be imported as part of CKD’ the company said in its progress report.
The company also expressed concern that it had limited timeframe available to complete all the necessary requirements and start commercial production positively before June 30, 2021 to avail the brownfield incentives for the new entrants.
Nevertheless, the teams of NML and GNL have been working day and night to address the above issues and hopefully will be able to address these challenges to launch its products within time as both the partners do not want to miss this opportunity of incentives for new entrants. Ultimately, GNL will be the biggest sufferer if it cannot meet the target dates as GNL has been working on this project since long utilizing all the resources including monetary investment as well as manpower.
Apart from the project related changes, the local economic conditions, particularly the automobile market situation have compelled the company to revisit project sustainability. Needless to mention that one cannot afford to go for a project of this magnitude especially with that level of uncertainty.
In addition to the progress on car project, the company is keen for capacity building vis-à-vis existing operations to ensure long term sustainability while addressing challenging macroeconomic environment.
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