ISLAMABAD: Finance Bill 2018 should amend Customs Act 1969 to impose total ban or slap heavy regulatory duty on the export of waste and scrap of brass/copper to avoid shortage of brass for local manufacturers of sanitary fittings, hardware/kitchenware, copper wire manufacturers, surgical equipment manufacturers and others in Punjab.
In a presentation to Prime Minister Shahid Khaqan Abbasi here on Tuesday, Sheikh Mahmood Iqbal, Chief Executive Organization for Advancement and Safeguard Industrial Sector (OASIS), informed about the positive impact of regulatory duty on export of waste and scrap of brass/copper.
The OASIS has also taken up the matter with the Federal Board of Revenue (FBR) to review RD regime on export of brass through Finance Bill 2018.
The Chief Executive OASIS said that it is really a matter of deep concern that the local manufacturers of sanitary fittings in Punjab, particularly in Gujranwala, are facing severe problems due to shortage of brass and some units are likely to close down their factories due to this very threat. Most of them are working in the category of cottage industry whose bread and butter are solely dependent on their day-to-day production. The local manufacturers have approached OASIS and requested to raise collective voice to reach the ears of concerned quarters. Since the primary objective of OASIS is to work for the protection of domestic industry and the employment associated therewith; therefore, it is making this very request on behalf of All Pakistan Brass Water Fitting Manufacturers Association (APBWFMA) as a gesture of unity and commitment.
The local manufacturers of sanitary fittings consume major quantity of brass/copper scrap (scrap) as their primary raw material and produce contemporary sanitary fitting products after making substantial value addition. There are tens of thousands of households associated with this industry directly and indirectly. This industry is also making import substitution of millions of US dollars every year and has every potential to export sanitary fitting products to rest of the world. The manpower engaged in this industry ranges from small individual entrepreneurs (cottage industry) to medium-sized and organized large-scale industry, the chief executive OASIS said.
He highlighted that the embarrassing situation occurs when the export of scrap starts from Pakistan and due to shortage of supply, the price of scrap shoots up in the local market. This makes production unviable for the manufacturers resulting into economic murder of such units. A few units had started exports of sanitary fittings but due to uncertain conditions of availability and volatile price structure of scrap, they were forced to shut down their units and the country lost potential exports of millions of US dollars. Brass is mostly imported by China and India in the international markets which procures raw materials in bulk quantities as a matter of their policy in order to support their mass production to achieve economies of scale. “Our policymakers should also discourage export of raw materials and encourage such exports after making maximum value addition,” he demanded.
The scrap of copper and brass is not only consumed by sanitary fittings industry but is also consumed by hardware, kitchenware, copper wire manufacturers, antiques & handicraft makers, surgical equipment manufacturers and other engineering goods producers mainly located in the golden triangle of Gujranwala, Wazirabad and Sialkot.
A detailed analysis of export of brass and copper scrap, price of brass in the local market and export trend of finished sanitary fittings has also been presented in order to demonstrate the present critical situation, he said.
It is, therefore, requested to either impose a complete ban on export of brass & copper as raw material, ie, without value addition or impose heavy regulatory duty on such exports to help the local industry survive by being competitive nationally and internationally. The resultant exports of finished goods also promise millions of dollars in foreign exchange easing out the balance of trade, Sheikh Mahmood Iqbal added.