KARACHI: The Pakistan Association of Large Steel Producers (PALSP) welcomes the construction package announced by the Honorable PM but genuine concerns of the steel industry also need to be deliberated in order to bolster the construction industry.
“There can be no construction without steel and so it is needless to say that now the focus needs to be aimed at enabling the steel sector to support construction and employment.”
Since the Pakistani steel industry was already witnessing a major downturn, the current lockdown has created a situation where steel companies are defaulting and close to bankruptcy. The Pakistan Association of Large Steel Producers (PALSP) has provided a clear roadmap to the government to pull the industry out of the crisis. Here are a few of the salient points:
- Allow steel industry that is providing material to the construction sector to open across the country including downstream retailers/traders. If steel mills and shops are not open how can construction sites operate?
- SBP to provide one-time interest free loans to steel manufacturing entities for a period of 6 months to help create liquidity in the sector.
There is no recovery of trade receivables and taking on additional debt, at high interest rates, in a sector that is struggling is not a viable option.
- Turnover tax U/S 113 for industry should be reduced to 0% from 1.5% for manufacturers and downstream retailers/ traders.
This will ensure documentation and will provide some cash flow relief to an industry that is already making losses this year.
The Pakistan Association of Large Steel Producers (PALSP) is a group of large, integrated and documented steel manufacturers that cumulatively represent 2.9 million tons of annual capacity, or 61% of the Pakistan’s primary steel capacity.