Bannu Woollen Mills shuts production for two weeks

Bannu Woollen Mills Limited (BNWM) on Tuesday announced plans to temporarily shut production amid raw material shortage.

In a notice to the Pakistan Stock Exchange (PSX) on Wednesday, the manufacturer of woollen yarn and cloth said it will close its production activities for two weeks.

“Due to shortage of raw materials, the management of the company has decided temporarily shut down/close of its production activities from 02 July to 15 July 2023,” read the notice.

“The production activities of the company would resume from 16 July 2023,” it added.

Back in March, BNWM announced a six-week shutdown citing import restrictions imposed by the State Bank of Pakistan (SBP).

“Due to current economic situation and its effect on the ability of the banks to open Letters of Credit (LCs) for the import of raw materials, and as a result, it is unable to continue with the production activities. Therefore, the company has decided to temporarily shut down/close its production activities from 25 March 2023 to 5 May 2023,” the company said in a notice back then.

In recent months, several industrial units including automobile and textile have either shut down or partially curtailed production citing various reasons including inventory shortage, lack of raw material and supply chain disruptions.

However, experts believe that the situation is expected to improve after the SBP on Friday announced the withdrawal of all restrictions on imports to facilitate the industrial sector.

“In view of the representations received from various stakeholders, it has been decided to withdraw these instructions with immediate effect,” a circular issued by the SBP said on Friday.

The government has stated that the measure “will resolve problems being faced by traders and industries.”

Meanwhile, experts were of the view that the step has been taken to meet conditions of the International Monetary Fund (IMF).

“The withdrawal seems in line with reported recommendations from the Fund where import restrictions were reportedly not appreciated by IMF and were suggested to normalise,” said JS Global in a recent report.