Business owners in Punjab have been hit hard by government environmental regulations. With AQI levels crossing 2000 in Multan and Lahore following close behind, authorities must do everything in their power to improve the air quality – even if it’s at the expense of business activity.
Shopping Malls
Punjab has directed shopping malls to install air purification systems indoors to combat the worsening air quality. However, the cost of a high-end HVAC system can reach as high as 50 million rupees per kanal. This price is so high that most small shopping malls might not be able to afford it.
However, for commercial establishments that can afford this equipment, the cost may not be entirely borne by the owners themselves. Since the majority of the shops in malls are rented out, businesses operating within the mall may see a rise in their rents in the coming months. This is because mall owners might try to recuperate the losses they incurred in paying for an air purification system.
For business owners, the higher rents will create a dilemma. They will have to either raise their costs to maintain their profit margins or have to absorb the extra cost in the form of reduced profit levels. Either way, the choice is not easy for businesses as they lose out.
Brick kilns and Industrial activity
Brick kilns have been hit hard by government regulations, too. A large number of brick kilns have been found in violation of environmental regulations due to the large amount of smoke that they emit. As such, 890 kilns have been noted to be in violation of regulations and have received warnings from the government. These warnings can turn into hefty fines if they don’t comply, which will severely impact the construction sector.
Since bricks are the staple input of construction projects across Pakistan, widespread fines on kilns will be detrimental to the construction sector. This is because the imposition of fines will cause bricks to cost more than usual. The result will only be a fall in the profit margins of construction companies that use bricks by the hundreds of thousands.
Aside from kilns, industrial activity in general is facing warnings and fines. District Authorities have reported a total of 312 industry-related environmental regulation violations. While the crackdown on industrialists will undoubtedly help the environment, the government should consider helping out. This could be done by handing out subsidies and guidance on the adoption of more environmentally friendly business practices.
Transport
While authorities are down on smoke-emitting vehicles in general, businesses may experience the effects twofold: Payment of fines and increased business costs.
Travel busses and other commercial travel via private channels (i.e. Indrive and Yango) are also expected to be negatively impacted as traffic police officials are stopping high smoke-emitting vehicles and fining them – even impounding vehicles at instances. These businesses already operate on slim margins and an excessive fine can mean the difference between employment and a lack thereof.
Moreover, for businesses that require the transport of goods from supplier warehouses to stores, rising fines imply a chance of extra costs. Businesses can simply avert this cost by making their trucks compliant with environmental regulations, but that comes at a cost.
Purifier and mask manufacturers
Manufacturers of air purifiers are bound to see an increase in the sale of their products. Experts are predicting massive sales volumes and profits for air purifier producers. Manufacturers such as Royal fans and Tamoor fans are expected to log sizable profits due to the deteriorating air quality index across Pakistan.
As for KN-95 masks, profit margins are expected to rise once again for local manufacturers as they are purchased in even higher quantities than air purifiers – as they are considered to be cost-effective and can be used outdoors too.
While other industries are expected to suffer, many predict great growth levels for mask and air purifier manufacturers. The measures taken by the government are tough for businesses; however, they are necessary to ensure the welfare of the general public. For now, all eyes are on Islamabad to see what lawmakers do next to tackle this precarious issue.