As Pakistani Mobile Manufacturers Close up Shop, Thousands of Jobs are in Risk.

Mobile Manufacturers Close up Shop, Thousands of Jobs are in Risk.


The future of over 20,000 workers is in risks as almost every one of the country's 30 Mobile phone assembly plants, including three managed by international brands, have closed due to makers' states that they have run out of basic supplies due to import restrictions.


ISLAMABAD:




After paying workers half of their April salary in advance, many businesses have placed them on shutdowns. They have been warned that they will be contacted once manufacturing has started up again.

A mobile phone maker complained that the businesses had to send workers home during Ramadan in an exchange with Dawn.

He blamed the closing of all three of his family's mobile manufacturing plants to the "incompetent and odd policies" of the finance minister.

He was referring to government rules that have made it challenging for importers to get letters of credit (LC's), which are documents from banks that promise that payments from buyers to sellers would be delivered on schedule and in full. As a result, imports of crucial machinery and parts required for the making of mobile phones have been banned.





The Pakistan Mobile Phone Manufacturers Association (PM PMA) just written to the IT ministry advising them that market shortage of mobile phones started and that local mobile supply had all but ended.

The letter, sent by the association's head Hajji Abdul Rahman, highlighted how clients, who must pay obviously higher costs for cellphone sets made locally, were also troubled by the situation.


As explained by Mr. Rahman, local set sales are going to decline as the cost of low-cost imported phones neared that of locally made products.

In the letter, he noted that the country's mobile industry, which includes 30 manufacturers and three foreign businesses, was in danger of closing down since many investors may turn attention to other industries.

He said that companies were nearly out of raw materials, which were mostly imported from China, South Korea, and Vietnam.

Mobile makers claim that the sector has to import $170 million worth of components and parts every month in order to function at full capacity; however, due of the dollar shortages, the government is not allowing the issue of credit letters. They said that no LC wasn't opened in the last week of December.





We worried that the State Bank of Pakistan has informally told banks not to accept imports from Pakistani mobile phone makers.

Mr. Rahman stated. He said that local manufacturers had sent their workers home, and 90% of Chinese experts had returned to China. A monthly quota of $83 million, or over half of the industry's entire LC demand, was provided to the industry for the eight months from May to December of last year, according to manufacturers. They feared that investors coming in would reduce their investments.

Since April of last year, Pakistan has been producing over 2.5 million phones each month on average, fulfilling over 90% of the market's demand; only the most costly versions are imported.


MUZAFFAR Hayat PARACHA, CEO of Air Link Communication Ltd, one of the nation's leading smartphone distributors, producers, and retailers, noted that in addition to fulfilling demand at home, the Made in Pakistan sets have also been exported.

According to Mr. PARACHA, the industry's next goal was to move towards locating accessories like chargers, batteries, earphones, cables, etc. when the production process and sales mechanism were simplified. All of these plans have since been cancelled. We are currently very worried about the basic industry's survival, he stated.





According to him, once an industry suffered widespread shut down it was extremely difficult to restart since investor confidence had been shaken.

20,000 young Pakistanis work directly and other 20,000 indirectly in the mobile phone field.

The PM PMA has requested that the government permit the import of elements in an amount that would be enough for the industry to run at half-capacity.


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