Textile mills in Pakistan suffering losses due to high cost of electricity

During the last three and a half months, over one million spindles capacity has been closed down in Pakistan mainly because of the unbearable high cost of doing business, said Tariq Saud, chairman of All Pakistan Textile Mills Association (APTMA).

He said that all these spindles were predominantly contributing to the exports of the country.

The main cause of closure is the unaffordable cost of energy, particularly the extortionate and unjustified burden of Rs3.63 per unit surcharges included in the electricity bills that have been enforced on the industry to deal with the continuous inefficiency of the power sector, he said.

He further said that it has become difficult to survive competition with such an unjustified addition of surcharges which has led to an increase in the cost of electricity to Rs14 per unit against regional competitors, who are paying less than Rs9 per unit.

He stated that a large number of textile mills were not able to pay monthly electricity bills because of such unprecedented losses.

It is expected that more mills would soon shut down their operations when they will receive the heavy monthly bills by November 20, 2015 onwards.

Closing down one million spindles means more than one million unsold cotton bales, a loss of one million jobs and production losses, he added.

Instead of improving efficiency of the power sector, government has levied these surcharges which have forced the mills to shut down, he stated.