Ghandhara Nissan shuts down plant

March 06, 2023 (MLN): Ghandhara Nissan Limited (PSX: GHNL), a leading automobile manufacturer in Pakistan has shut down its plant from March 06 to March 10 due to a shortage of raw materials caused by import restrictions imposed by the State Bank of Pakistan (SBP), the company's filing on PSX showed today. 

The company has reported that its vendors are facing major hurdles in importing raw materials and receiving clearance for their consignments from commercial banks, which has severely disrupted the entire supply chain.

In light of the recently introduced mechanism vide EPD Circular No. 20 of 2022 dated December 27, 2022, (effective from 2nd January 2023), Commercial Banks are advised to prioritize/facilitate the imports to essential sectors only, which does not include the auto sector.

The company and its vendors continue to face major hurdles in the import of raw materials and receiving clearance for their consignments from commercial banks. This has disrupted the entire supply chain and the vendors are unable to supply raw materials and components to the company.

Accordingly, the company has insufficient inventory levels, therefore, the company is unable to continue its production activities on regular basis.

This move is expected to have significant repercussions for the company's operations, as well as for the wider automotive industry in Pakistan. 

The announcement by Ghandhara Nissan came at a time when the Pakistani economy is already facing significant challenges due to inflation, rising costs, and a slowdown in economic activity.

Overall, this development highlighted the importance of a supportive regulatory environment and strong supply chain management in sustaining the operations of businesses in Pakistan and the need for a coordinated response to address the challenges facing the industry.

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