Lahore – Approximately 100 factories, including Sitara Textile Mills, have ceased operations due to a significant increase in energy tariffs and exorbitant markup rates. Mill owners report that rising production costs have forced over a hundred mills to close, with the remaining textile mills slashing their production by half. This recent wave of shutdowns has led to an additional 200,000 job losses in Lahore, the country’s third most populous city.
Workers and mill owners have expressed that the current electricity and gas prices make it untenable to run these factories. They are also advocating for a reduction in markup rates. The factories still in operation have stopped accepting new export orders, focusing solely on fulfilling existing ones, with further closures anticipated in the coming month.
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Officials from the Pakistan Textile Exporters Association have noted that global market conditions are currently favorable for increasing exports, as many American and European brands are moving away from China, and the situation in Bangladesh might create opportunities for Pakistan’s textile sector.
Traders and mill owners have criticized the high electricity tariffs and emphasized the need for energy from more affordable sources. They have also called for lower interest rates and an independent energy audit. Industry leaders argue that Independent Power Producers (IPPs) have received excessive payments relative to their investments, leading to unmanageable electricity costs and widespread industry shutdowns.
