Fan manufacturers demand curbs on scrap export to China

Published May 12, 2021
Increasing prices of basic raw materials needed for the production of electrical fans have significantly raised the costs of the manufacturers. — Wikimedia Commons/ PD-USGov
Increasing prices of basic raw materials needed for the production of electrical fans have significantly raised the costs of the manufacturers. — Wikimedia Commons/ PD-USGov

GUJRAT: Electric fan manufacturers on Tuesday urged the government to impose duty on the export of scrap to China and sought reduction in the regulatory duty on electrical steel sheet imports as the industry battles with expensive inputs and loss in sales amid the Covid-19 pandemic.

Increasing prices of basic raw materials needed for the production of electrical fans have significantly raised the costs of the manufacturers and brought upward pressure on retail market rates across the country.

The industry is also facing a shortage of raw materials — electrical steel sheet, copper, aluminium and some plastic items — in the domestic market. This along with poor sales owing to the shrinking buying powers of consumers amid the pandemic is leading to production cuts, fan manufacturers claimed in conversation with Dawn.

Based mainly in Gujrat and partially in Gujranwala, there are 150-200 small to medium-sized electric fan manufacturing units, with their component suppliers also spread in the two cities.

“The raw material market is quite volatile for the last six to eight months as the prices of electrical steel sheet, the most important material of a fan, with rates going up to $1200-1400 per tonne,” a manufacturer told Dawn.

“Scrap, which is a second major source of getting steel for fan manufacturers, is hardly available as it is being exported to China,” he said.

The fan industry been demanding imposition of duty on the export of scrap to China so that the local industry has access to cheaper raw material, said Muhammad Waqas, an electrical fan manufacturer. Rates of raw materials are increasing on a daily basis, causing price volatility in the market amid lower sales, he added.

Ali Usman, former chairman of the Pakistan Electric Fan Manufacturers Association (Pefma), said prices of raw materials have doubled in the last six months.

“The daily fluctuation in the rates of raw material is causing unprecedented problems for the manufacturers in coping with the situation at a time when the market is already facing tough circumstances due to the pandemic,” he said. “Likewise, the export sector of the fan industry is also facing the issue of fixation of prices in the global market,” Mr Usman added.

Talking to Dawn, an exporter said imposition of duty on the export of scrap to China as well as reduction in the regulatory duty on the import of electrical steel sheet might decrease the intensity of issue and steer the local industry out of a difficult situation. Manufacturers in the country produce ceiling and pedestal fans, with the former mostly being procured by domestic buyers. Made in Pakistan pedestal fans are currently being exported to Bangladesh, Afghanistan, Middle Eastern countries like Saudi Arabia, United Arab Emirates, Yemen, Iraq, etc.

The country’s fan exports have taken a hit in the last few years owing to the wars in Yemen, Syria and Iraq, plummeting to $28.8 million in 2018-19 from $38m a decade ago. However, exports have witnessed an increase of 15.5 per cent to $10m during the first five months of the current fiscal year from $8.7m in the same period a year ago.

Published in Dawn, May 12th, 2021

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