September 19, 2018 (MLN): All Pakistan Ceramic Tiles Manufacturers Association (APCTMA) in a statement issued on Wednesday pleaded the government to withdraw the increase in gas price as it will make locally produced tiles uncompetitive in the local and global markets and will lead to thousands of jobs losses in the sector.
Spokesman of APCTMA said that the tile industry is in the revival phase and expects relief measures from the government against the difficulties of rising energy prices, high tax rates, extremely low Import Trade Price (ITP) of imported tiles from China in addition to massive inflow of smuggled tiles from Iran.
He urged Finance Minister Asad Umar and Minister for Petroleum Ghulam Sarwar Khan to take back increase in natural gas tariff. Gas price for general industrial and captive power plants has been increased by 30 percent from Rs. 600 to Rs. 780 per mmbtu.
According to APCTMA, the government’s announcement on raising the prices of gas will have a negative impact on the direct and indirect employment of over 50,000 people in the local tiles industry. It said that the government decision will stall the growth in the construction sector which is booming on the back of rapid urbanization and other construction activities of large malls, office buildings and apartments across the country thus making all the efforts of employment generation a futile exercise.
In addition, he warned that the gas tariff increase will also halt all the expansion and investment projects of the industry which will also hurt the transfer of technology and the creation of a skilled labour base and vendor industry in the country. The industry intends to invest in capacity enhancement, to further increase its production in order to meet demand, if the government supports the local industry, he said.
The Association also said that the local tile industry is producing quality products that are comparable to top global tiles manufacturers, hence contributing towards a big opportunity for employment generation in the country.
Despite losses incurred by local manufacturer as declared in the prior financial statements of public listed companies, the local industry is continuously contributing to the national exchequer in the form of sales tax, import duties and other taxes, he said.
He said that industry has already been hit by huge influx of smuggled tiles and imports at lower valuation, which capture approximately over 40 percent of the country’s tile market of nearly Rs. 80 billion while domestic manufacturers continue to suffer owing to their higher production costs and uneven competition from cheaper imported products. Increase in gas prices will badly hamper the sales and profitability of local tile industry and will further intensify the share of imported tiles.
Copyright Mettis Link News
23206
