Large steel producers seek incentives

ISLAMABAD: The Pakistan Association of Large Steel Producers (PALSP) said that genuine concerns of the steel industry also needed to be deliberated in order to bolster the construction industry.

They welcomed the construction package announced by the prime minister.

“There can be no construction without steel and so it is needless to say that now the focus needs to be aimed at enabling the steel sector to support construction and employment,” the PALSP said.

Since the Pakistani steel industry was already witnessing a major downturn, the current lockdown has created a situation where steel companies are defaulting and close to bankruptcy.

The PALSP has provided a clear roadmap to the government to pull the industry out of the crisis and asked the government for implementation on three-point agenda.

1. Allow steel industry that is providing material to the construction sector to open across the country including downstream retailers/ traders.

2. The SBP to provide one-time interest free loans to steel manufacturing entities for a period of six months to help create liquidity in the sector. There is no recovery of trade receivables and taking on additional debt, at high interest rates, in a sector that is struggling is not a viable option.

3. Turnover tax U/S 113 for industry should be reduced to 0% from 1.5% for manufacturers and downstream retailers/ traders. This will ensure documentation and will provide some cash flow relief to an industry that is already making losses in the current year.