PESHAWAR, Jan 17: One-third of the industrial units in NWFP have been closed down, whereas 60 per cent of the functional manufacturing units are operating below their capacity due to unfavourable investment climate over the years, according to official sources.

The province has a total number of 1970 industrial units including sugar, beverages, food processing, flour mills, ice and cold storages, cigarette, textile, leather, furniture, cement, steel furnace/rerolling, pharmaceutical, marble, match and several number of plastic manufacturing unit.

However, due to a variety of reasons over 640 units have been closed down whereas there are over 1000 (thousand) units which are operating below their operational capacity.

The closed down units, according to some official documents available with this scribe, involve a collective investment of over Rs13.1bn out of a total investment of over Rs60bn made in the NWFP industrial sector since Pakistan came into being.

“NWFP is landlocked and is over a thousand miles away from the Karachi sea port. As it is highly dependent on the south for both of its inputs/raw material and markets, higher transportation costs make it difficult for the industries to compete,” contained in an official document of the NWFP government available with Dawn. Withdrawal of incentives previously available to the Gadoonamanzai industrial estate, over capitalization, inefficient management, absence of technical know-how, high production cost, shortage of raw material, depressed market, lack of working capital, drop in internal cash generation and poor cash management have been described, under the official documents, as some of the reasons for the closure of so many industrial units and below-the- capacity operations of a large number of industries.

Further, increasing overhead costs due to high freight charges, high cost of production mainly due to increasing electricity charges and outdated machinery that result in low production due to technical breakdowns are some of the reasons hampering industrial sector’s growth in the NWFP.