Millat Tractors stops production

KARACHI: Millat Tractors Limited (MTL) has announced to close its production from today (Friday) till further notice on reduced demand and cash flow problems.

In a statement to Pakistan Stock Exchange (PSX) on Thursday, MTL said, “Due to continuing reduced demand of tractors and cash flow constraints, the company will remain closed from Friday, January 06, 2023, till further notice.”

Earlier, the company had been observing Fridays as non-production days Since December 16, 2022, citing a decline in the demand for tractors.

An analyst said the demand for tractors had reduced on the back of stagnant flood water in many areas of agricultural land in Sindh and rising inflation in the country.

A number of companies have suspended their operations in recent months citing different reasons, including low demand, inflation, market condition, and import curbs by the government.

Tractors’ demand has declined owing to a catastrophic flood last year in the country. Moreover, the tractor industry has also faced a liquidity crunch on the back of delays in sales tax refunds stuck with the Federal Board of Revenue.

Earlier, Bolan Castings Limited, maker of different auto parts of tractors and commercial vehicles, announced non-production days in December 2022 on a decline in sales.

The Lahore Chamber of Commerce and Industry also urged the government to facilitate the tractor sector in December, saying the sale of tractors had declined to an alarming level which might force tractor parts manufacturers to fold up production.