Arctic Textile Mills Limited, previously known as Khurshid Spinning Mills, has announced the immediate closure of its leasehold spinning unit, attributing the decision to the challenging conditions within Pakistan’s spinning sector.

The company, which produces and trades in various types of yarn, informed the Pakistan Stock Exchange (PSX) of the development on Thursday. "The Board of Directors, in its meeting held on June 19, 2025, has decided to discontinue the use of the leasehold spinning unit with immediate effect," the notice stated.

This decision was made due to the challenging conditions in Pakistan's spinning sector, marked by falling demand, rising input costs, and ongoing market uncertainty. Consequently, operating the leased spinning unit was no longer commercially viable, the statement explained.

Pakistan's textile sector is vital to its economy, contributing significantly to both exports and GDP. However, the industry currently faces hurdles like issues with the Export Facilitation Scheme (EFS) and high energy expenses.

Last week, the government imposed an 18% sales tax on imported cotton yarn in its federal budget. The All Pakistan Textile Mills Association (APTMA) praised this decision and strongly urged the government to apply the 18% sales tax to all imported yarns and fabrics, including cotton and polyester, brought in under the Export Facilitation Scheme (EFS).

Meanwhile, the board of Arctic Textile Mills stated that discontinuing this spinning unit will not have a significant financial impact on the company's financial position.