Siddiqsons Tin Plate Limited (STPL) said on Tuesday that it has decided to roll back the Tin Mill Black Plate (TMBP) project, owing to challenging economic conditions.

The listed company shared the development in its notice to the Pakistan Stock Exchange (PSX) on Tuesday.

“The board has reached an important decision regarding the TMBP project. Due to the challenging economic conditions, characterized by high inflation, increased markup rates, and significant fluctuations in the PKR to USD parity, the company has decided to roll back the TMBP project,” read the notice.

STPL said that the current economic environment has created a situation where the continuation of the TMBP project is not financially feasible.

“Additionally, the rising costs of materials and equipment, coupled with the higher cost of capital, has significantly impacted the project’s projected returns and the company’s ability to proceed as initially planned.

“This decision has been taken in light of the company’s need to prioritize the financial stability and sustainability of its operations during these uncertain times,” it said, adding that the company remains committed to managing its resources responsibly and ensuring the long-term viability of its business.

STPL announcement highlights the issues facing Pakistan’s economy that announced its GDP grew by 3.07% in the April-June quarter of 2023-24.

However, the growth has come largely on the back of agriculture as industrial activity contracted 3.59% during the three-month period, a statement by the National Accounts Committee showed on Monday. This was the sector’s third contraction on a quarterly basis during the fiscal year.

Moreover, spiralling costs have compelled major listed corporations in Pakistan to reduce headcount and shut down operations.

Last month, STPL initiated the formal process to shut down its plant located in Balochistan, owing to sales decline and labour strike.

In its notice to the PSX back then, the company attributed the decision to a “reduction in sales due to a result of tax exemptions in the FATA/PATA region, increase in use of Galvalume for food packaging instead of tinplate, and illegal strike by retrenched workmen preventing the winder plant from re-opening”.