Siddiqsons cancels tin mill project amid economic struggles

Siddiqsons Tin Plate Limited (STPL) Tuesday said that it is going to roll back its Tin Mill Black Plate (TMBP) project in the wake of the economic condition current in the country.

The company announced in a notice to the Pakistan Stock Exchange (PSX), “The board has taken an important decision regarding the TMBP project. High inflation, increased markup rates and considerable PKR to USD parity fluctuations have made it financially uneconomical to continue the TMBP project.”.

This economic environment has allowed it not to proceed as planned in terms of the increasing cost of materials and equipment and a higher cost of capital affecting the projected returns, said STPL.
“The company remains committed to managing resources responsibly in the long run. This is to ensure priority on the financial soundness and sustainability of our operations in these uncertain times,” the notice further said.

The announcement outlines some of the larger issues that Pakistan’s economy is facing, which grew at 3.07 percent during April-June quarter of 2023-24 fiscal year. Just once more, agriculture is leading the charge while industries have again contracted to 3.59 percent over the quarter – this being the third successive quarterly contraction of the sector.

Besides, high costs have compelled numerous firms in Pakistan to lay off employees and shut down their operations. Last month, STPL initiated the formal process to close down its plant in Balochistan on an account of decline in sales coupled with labour strikes. However, in a prior notice sent to the PSX, the company has cited tax exemptions in the FATA/PATA region; increased usage of Galvalume for food packaging, and illegal strikes by retrenched workers as reasons for closure of operation.