Facing energy shortages and an overall decline in demand, companies in Pakistan are either announcing a shutdown of operations or scaling them back, leading to heightened risks of mass unemployment, a dent in exports, and a massively lower economic growth rate in the fiscal year 2022-23.
Frontier Ceramics Limited (FRCL), the makers of ceramic tiles, sanitary wares, and related ceramic products, announced in a notice to the Pakistan Stock Exchange (PSX) this week that it has shut down its floor tile production plant for an “uncertain period”.
“We are writing to communicate that Frontier Ceramics Limited has decided to shut down its floor tile production plant for an uncertain period due to gas supply shortage,” the company said in a statement.
The ceramic manufacturer added that the “unforeseen devaluation of rupee coupled with the government restrictions, including letter of credit (LC) approval constraints and general economic instability are also reasons behind the decision.”
The company is essentially engaged in the manufacturing and selling of ceramic wall and floor tiles under the widely known brand name ‘FORTE’.
The development comes as Pakistan’s economic situation remains vulnerable owing to an ongoing dollar shortage, low foreign exchange reserves, and an energy crunch.
“A number of sectors are witnessing this situation owing to gas shortage due to winter months,” Fahad Rauf, Head of Research at Ismail Iqbal Securities Limited, told sources
“However, this year, the shortage is a bit higher, as the country has so far remained unsuccessful in purchasing gas at spot prices, leaving LNG terminals underutilized, whereas the domestic production of gas has also declined,” he said.
