Karachi: Quetta Textile Mills Limited has faced significant operational challenges in the fiscal year ending June 30, 2024, primarily due to high utility costs and adverse economic conditions, according to the company's chairman's review.
During the year, the textile industry grappled with high interest rates and inflationary pressures globally, impacting businesses significantly. Quetta Textile Mills, in particular, has seen a reduction in operations, with some of its spinning units shutting down due to unsustainable electricity and gas rates. As a result, the company operated at only 30% of its total capacity for a significant portion of the year, leading to decreased sales both in local and international markets.
According to information available from the Pakistan Stock Exchange (PSX), the company has struggled to maintain its operational viability against the backdrop of a challenging economic environment. The persistent high costs have directly impacted the textile sector, compelling businesses like Quetta Textile Mills to scale back production significantly.
The company's board has endeavored to navigate these turbulent times by implementing robust governance practices as mandated by the Code of Corporate Governance Regulations 2019 and the Companies Act 2017. Efforts included providing essential board agendas and supporting documents in a timely manner, ensuring active participation from both executive and non-executive directors in critical decision-making processes.
Moreover, the board has taken a hands-on approach in the recruitment, assessment, and remuneration of key executives, aiming to maintain strong leadership during this period. The overall performance and effectiveness of the board were deemed satisfactory, given the harsh economic climate and the operational challenges faced.
Despite these efforts, the ongoing economic conditions, marked by high inflation and the ripple effects of a global recession, continue to pose severe challenges for the future operational capacity of Quetta Textile Mills.