Disruptions at Pakistan’s major border crossings with Afghanistan have begun to weigh on the trading scenario of Pakistan Aluminium Beverage Cans Limited (PABC), which relies on Afghanistan and Central Asia for a significant share of its export business.
Trade routes such as Torkham and Chaman, which are normally used to move food items, consumer goods and industrial packaging solutions, have been repeatedly shut in recent weeks. Reports of cross-border shelling and disagreements over transit procedures have also led to intermittent closures. It has not only affected a wide range of commercial flows but also seems to impact manufacturers dependent on cross-border trade links.
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PABC, the country’s only publicly listed beverage-can producer, addressed the matter in a notice to the Pakistan Stock Exchange (PSX). The company seems to be dubious about its commercial relationship with Afghanistan and Central Asia, two of its major export markets.
The notice read: “We would like to apprise the PSX and our esteemed stakeholders of certain recent developments in the regional landscape affecting Pak-Afghan trade routes. In view of the current tensions and hostilities along the border, all border crossings have been closed for commercial activities. Our company values its established trade connections with partners in Afghanistan and Central Asia, which form an integral part of our diverse sales activities.”
PABC has highlighted that if the commercial traffic closure continues to persist due to border security tension, their long-standing business relationship with the beverage manufacturers there will be strained. These markets have grown important for PABC due to the demand growth for canned beverages and limited local manufacturing capacity in those regions. However, the persistent tensions could have a material impact on export-driven sales if the situation continues.
Simultaneously, analysts tracking the sector also believe that the prolonged restrictions could force regional beverage companies to rethink their supply chains, either by slowing production or by seeking alternative packaging sources if cross-border logistics do not stabilise.
Amidst this uncertainty, PABC has promised to review the evolving border situation and will calibrate its operations wherever needed to prioritise supply commitments to its customers outside the borders.
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