20000212

Ban on new flour

mills in Punjab may

remain for 10 years

LAHORE: The ban in Punjab on setting up new and expansion of existing flour mills will continue for at five to 10 years to check the ill-planned mushroom growth of more than requirement.

Official sources said here on Friday that according to an estimate, in the prevailing scenario, it would become extremely difficulty in the days to come for small flour mills built without planning, costing nearly Rs 40 billion, to survive in competitive market as their overhead expenditures would be beyond their control and much higher compared to well established big capacity mills with sound financial background and having reasonable revolving investment.

Sources said that five more than five times the required number of flour mills are working in Punjab which always exploit the government for obtaining wheat quota at subsidised rates and the government is bearing a burden of Rs 20 million subsidy daily.

Sources said that 437 flour mills, with a total grinding capacity of 58,456 tonnes per day against the grinding requirement of 12,000 tonnes daily have been getting wheat quota at subsidised rate since last year, and 77 more flour mills have been added so far raising the total number to 514 mills which are surplus to wheat flour requirements of the people of the province.

The prevailing circumstances and exploitation of wheat quota forced the government to impose ban on further setting up of flour mills and their expansion and to discourage future investment in this already saturated industry indicating bleak prospects with no surety of survival.

Under current rules and regulations the government is not bound to release wheat quota to all flour mills and it is always released according to requirement of urban population of the district concerned and not to meet the individual demands of the mills. Under Food Stuff Control Act 1958, the mills are bound to follow the rate fixed by the government.ÑAPP