LAHORE – At the time when local tractors industry has been going through its worst ever period in terms of sales and production for last few years, the import of used tractors will prove detrimental.
Also, the import of used tractors will result in massive unemployment as the strong and sturdy tractor industry would be wiped out of the country, which is against the government’s agenda to generate employment.
Mohammad Shahid Hussain, Chief Executive Officer Al-Ghazi Tractors Ltd, the producers of New Holland tractors in Pakistan, said that recently the government of Punjab recommended change in policy to allow duty and tax free import of up to five years old used tractors.
“This comes as a complete surprise as it’s a complete contradiction to the directions being taken by the federal government,” stated CEO Al-Ghazi tractors Mohammad Shahid Hussain.
He added that the last 4/5 months proved very bad for the local tractor industry as one of the lowest trends ever seen over the last few years has brought massive slow down, leading to considerable non utilization of capacity.
“So, the annexation of used imported tractors in Pakistan would bring many ramifications for the local tractor industry as well as for the national economy,” reasoned Shahid.
He said the negative outcome of this move will be: outflow of foreign exchange reserves on import of used tractors; local industry’s contribution to exchequer (currently at approx. Rs. 4.5 billion) will get marginalized.
Local parts manufacturing industries will be badly affected as tractor assembly involves 90 percent locally manufactured components; under-utilization of local resources; fading foreign investors’ trust; and prospective loss of potential or any further foreign direct investment in manufacturing sector.
And, he added, the import of used tractors would be a huge burden on our foreign exchange while the local tractors being 95 percent localized hardly use any foreign exchange.