A significant name in the textile sector in Faisalabad, Sitara Textile Mills has shut down because of growing manufacturing costs. Almost a hundred more industries, both big and small, have also had to close. The primary causes of these closures are rising interest rates and rising energy costs.
A recent report revealed that operational textile mills have reduced production by 40%. This crisis has left up to 200,000 workers unemployed, a situation that is expected to worsen if no relief is provided. Chaudhry Salamat Ali, representing the Pakistan Hosiery Manufacturers and Exporters Association, emphasized that unless the government steps in to lower electricity and gas prices and reduce interest rates, more mills will cease operations.
The situation is already dire, with most factories no longer accepting new export orders. They are only fulfilling existing commitments, and further closures are anticipated in the coming month.
In addition to the local challenges, the Pakistan Business Council has expressed concern about multinational companies relocating their operations from Pakistan. Some companies have already moved their back offices abroad.
A recent report by the Dubai Chamber of Commerce highlights the growing trend of Pakistani companies registering in Dubai. In the first half of 2024, nearly 4,000 Pakistani firms were registered in Dubai, a 17% increase compared to the same period in 2023. This surge places Pakistan as the second-highest country for company registrations in Dubai, signaling a shift in business operations away from Pakistan.
