Tuesday January 31, 2023

Non-availability of raw material forces Diamond Industries to suspend operations

Decision taken for short-term with effect from January 10 till further notice

January 10, 2023
An undated image of a room showing a foam mattress. — AFP/File
An undated image of a room showing a foam mattress. — AFP/File

In yet another casualty of the economic crisis, Diamond Industries Tuesday announced it was suspending its manufacturing operations for a short term due to the “non-availability of imported raw material.”

The company informed the Pakistan Stock Exchange (PSX) about the development via a notice.

“Due to adverse economic conditions in the country and non-availability of imported raw material, the company has suspended its manufacturing operations for a short-term with effect from (Tuesday) January 10, 2023, till further notice subject to availability of imported raw material in the country,” the notice read.

The company — incorporated under the Companies Ordinance, 1984 as a private limited company on June 18, 1989 — is engaged in the manufacture and sale of foam products and PVA products consumed in industry and domestically.

Diamond Industries’ trade has come to a standstill at the PSX as its share price decreased 0.18%, or Re0.07, to close at Rs38.50 as of December 6, 2022. None of its shares has changed hands since then raising concerns for analysts and financial experts.

The deepening economic crisis has thrown spanners in the works of many industries until recently, bringing their productions to a halt and in some cases causing massive layoffs.

Diamond Industries is not the first company that has decided to suspend its operations to save it from further losses as a number of others have also fully or partially quit operations because of demand, inventory, energy, and supply chain constraints.

The government moved to curb imports in the face of fast-depleting foreign reserves, a declining currency, and a widening current account deficit, which has had a cascading effect on industries that rely on imports to complete finished goods.

Last week, Millat Tractors Limited, announced it was shutting down production for an indefinite period starting January 6, arguing they could not plough ahead with their operations amid low demand and severely compromised cash flow.

Meanwhile, Pak Suzuki Motor Company Limited (PSMC) and Baluchistan Wheels Limited also announced plant closure.

Earlier, Crescent Fibres Limited, engaged in the manufacture and sale of yarn, announced to curtail production by up to 50% on a temporary basis.