Caustic soda: Removal of protective duty sought

KARACHI, July 18 The Pakistan Textile Processing Mills Association has urged the government to remove the protective duty on caustic soda flakes, and bring it in line with duty on other industrial raw material.

This demand is contained in a letter addressed by the association's chairman Nisar Shekhani to Rana M Farooq Saeed Khan, Federal Minister of Textiles, claiming that such a protection is not given anywhere in the world.

The demand has been made following the crisis that developed after two major producers of the above mentioned product stopped delivery to the processing industry which was experiencing considerable problems already.

He said that textile processing industry is the first step or the base on which the whole textile value-addition chain is built. “Any jolt/crisis that the textile processing industry feels automatically balloons into a major crisis for other components of the chain,” he claimed.

Mr Shekhani said that textile processing industry is, at the moment, in a grip of severe crisis, a crisis artificially created by the formation of an alleged cartel by two manufacturers of caustic soda. Caustic Soda is the very basic and indispensable chemical for textile processing.

The association's chairman claimed that the two manufacturers, Sitara Chemical Industries, Faisalabad and Ittehad Chemical Industries, Kala Shah Kaku, Lahore, largely meet the caustic soda requirements of the processing industry.

He reminded the minister of the association's briefing in which it was pointed out that since July 12 the two manufacturers of caustic soda have suspended the delivery of their product without any prior intimation or specifying any reason in writing.

In fact, he claimed, Sitara has also suspended the delivery of their other chemical product, liquid bleach.

The plea of the producers is that they have closed the plants, but the association has serious reservations on this plea.

Shekhani in his letter contended that informally the management says that it is in retaliation to an SRO issued by FBR reducing the duty on caustic soda (liquid, PCT Code 28151200).

Interestingly, however, the rates of the commodity, caustic (liquid) have neither decreased since the passage of Finance Bill 2009 nor have any of our members, the consumers, demanded any reduction in price, he claimed.

Furthermore, the commodity has not been imported for more than a decade. “Then why are our members are being targeted in the name of retaliation?” he asked.

While the two manufacturers, he alleged, have enjoyed undue benefits in the form of protective duty, 25pc customs duty on flakes (PCT Code 28151100) has allegedly licenced them to wreak havoc on the industry.