LAHORE: Pakistan’s tractor industry, which is on the verge of collapse, has sought stimulus from Prime Minister Imran Khan to revive the segment.
Industry stakeholders claim that although tractor manufacturers are permitted to continue production, they cannot function unless proper notification is issued, which will allow allied vendors and traders to produce and transport components.
In a statement, Al-Ghazi Tractor CEO Mohammad Shahid Hussain said that even before the Covid-19 pandemic, tractor assemblers struggled to survive and now their problems were multiplying.
“Tractor manufacturers are only asking for an immediate and urgent exemption of the original sales tax, which has been delayed a long time,” he said. “The release of a refund will immediately increase the industry’s cash flow and will also have a positive impact on its value chain.”
He added that tractor production had stalled since the locking took effect while production in 2020 until now has fallen by at least 23-24%. In addition, he added, in the current scenario, it would be a step needed by the government to collect additional sales tax, which was put in place recently.
“If a refund is not issued, tractor assemblers will need additional funding to fund their vendors during the financial crisis, which will certainly add to operating costs,” he regrets.
He is of the view that the decline in the tractor segment is the most severe compared to other industries.
The CEO stressed that the slowdown had a dripping impact on the agricultural sector. “Tractors may be the only equipment that helps farmers in mechanizing and in increasing yields,” he said.
He recalls that the vendor base, developed over the past three decades, has facilitated the country in producing up to 90% of tractor parts locally. “This vendor base can only survive if assemblers continue to produce and sell their units,” he stressed.
Published in The Express Tribune, 7 Aprilth, 2020.
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