August 30, 2022 (MLN): Indus Motor Company Limited (INDU) has decided to temporarily shut down its production plant effective from September 1, 2022 to September 16, 2022 due to LC approval constraints, the company’s filing on PSX showed on Friday.
The decision of shutting down the plant came due to the restrictions imposed by the State Bank of Pakistan (SBP) on CKD imports.
To note, on May 20, 2022, the State Bank of Pakistan (SBP) introduced a mechanism, vide EPD Circular No. 09 of 2022, for obtaining prior approval for the import of CKD kits and components of Passenger cars (HS Code 8703 category) for the auto sector.
The delay in aforesaid approvals has created hurdles in the clearance of import consignments of the company, resulting in a significant reduction in inventory levels and consequently, creating an adverse impact on the supply chain and production activities.
Due to insufficient inventory levels to maintain production, the company has decided to temporarily halt its production activities.
However, in case of any change in the production plan due to approvals being sought, the same will be communicated accordingly, the notice noted.
