LAHORE: Director Mehran Group and auto expert Mashoood Khan urged the government to support basic raw material manufacturing in Pakistan.
“After the pandemic, we have to review the government’s policy and ensure that basic raw materials will be manufactured in Pakistan,” said Mashood. He added that due to various reasons including logistics costs and closure of some global raw material manufacturing plants industries in Pakistan have been badly affected. Mashood Khan said the prices of raw materials have increased substantially in the recent months and especially the prices of Sheet Metal and Plastic seem uncontrollable. “Since steel is one of the basic raw materials used in manufacturing of a number of things, especially automotive manufacturing, this heavey increase in its prices is unbearable for auto parts manufacturers,” said Mashoood.
He added that if auto parts manufacturers do not pass on this increase in raw material prices to the customer they will not be able to survive in the near future. “Auto parts manufacturers are medium and small enterprises and they buy raw materials from the market on monthly or bi-montly basis, hence they are continuously incurring financial losses due to incessant increase in the prices of raw materials making it really hard for them to stay afloat,” said Mashood. If this trend continues, he added, a number of auto parts manufacturers will not be able to continue with manufacturing and will be out of business. It is pertinent to mention here that local prices of steel have witnessed an increase of Rs 80 per kilogram since January 2020. The prices are still increasing as on Tuesday local steel manufacturers further increased Rs 3/kg in the prices of CRC Material making it to be sold at the rate of Rs. 225 to Rs 230 per kilogram. “The impact of this increase in the price of steel from local mills is quite negative on the Original Equipment Manufacturers (OEMs),” said Mashood. He added that the sub-suppliers hold current inventory of low-priced material to sell to OEMs at new high prices, which is seriously affecting the supply chain.