Pakistan’s Textile Sector Faces Regional Threat.

Once buoyant and prospering , Pakistani textile industry is facing regional threat from new comers like Bangladesh and Vietnam, and giants including China and India. Its malady ? Lack of fresh investment and neglect to upgrade and modernise. The key reasons? High cost of finance, increasing raw cotton prices, and the industry barons’ relocating abroad, including in Bangladesh.

Textiles, the country’s biggest industry, the largest employer and the principal forex earner, looks downcast. Pakistan is the world’s fourth largest producer and the third largest consumer of cotton.

It has lost the technology edge in basic textiles, which it enjoyed over India, Bangladesh, and China, at the start of this century, due to lack of investment in the sector, in the last five years, as its competitors rapidly upgraded.  Gohar Ejaz Khan, Chairman of the powerful All Pakistan Textile Mills Association (APTMA), identifies some of the key causes of this worrisome picture. “The industry invested heavily in basic textiles after 9/11, on the strength of a low interest rate regime that continued until 2004. The industry has been caught off guard as all its financial plans are ruined by an abrupt increase of 300 percent in the interest rates. The reserves of all the textile mills have dried up now in servicing  the bank credits at 16-18 per cent that were actually prices at 6-7 per cent when balancing and modernisation was carried out,” he explains.

The industry insists that a return to those boom years is possible with the help of fresh investment if, it is available at “ viable interest rates.” Pakistani textile exports in 2010 were $ 10.182 billion up from $ 9.776 billion in 2009. Exports in the fist seven months of 2011 July-January  were $ 6.914 billion up from $ 5.187 billion  in the like period of 2010. Overall exports in 2010 were $19.673 billion, up from $ 19.120 billion  in 2009.

As Pakistani textile industry was injecting modern technology, competitors including India, forced their own governments to subsidise import of high-tech equipment.

Several big textile entrepreneurs support this view. S.M. Muneer, one of Pakistan’s biggest spinners, says Pakistan, in 2003, was operating a total of 11.8 million spindles. Half of these spindles were state-of-the-art. India and China did not have them. Pakistan hardly added two million spindles in the last seven years.    Machinery import data, compiled by  International Textile Manufacturers Federation (ITMF) indicates, “Pakistan did not import a single spindle in 2007 and 2009, while imports in 2009 were limited to 238,000 spindles.” In sharp contrast to Pakistan, China imported 268 million high speed spindles during 2004-2009.

India added 11,86 million spindles, equaling Pakistan’s, in 2003, and Bangladesh imported 2.3 million high-speed spindles.

A similar story relates to installation of imported modern shuttle-less and air jet looms. In 2003, Pakistan had 23,000 plus shuttle-less and air-jet looms. Between 2003 and 2009 Pakistan added just 5,425 of these looms. China had around 30,000 of these weaving machines in 2003, while India had only 13,000, and none was in use in Bangladesh.

In five years to 2009 (2004-2009) China added 175,233 shuttle-less looms, India 22,221, and Bangladesh 23,484 units. Pakistan imported none of these looms in 2008 and 2009. In view of this technology input by competitors,  “bulk of the global output of yarn and fabric consumption will be done in India and China which have now larger capacity,”said Ejaz.  He cautions the industry and the government saying: “Pakistan’s  betterment lies in increasing textile productivity, both vertically and horizontally, by adding high-tech spindles, looms and sewing machines through a meaningful facilitation.”  

Source : khaleejtimes.com