The Union of Small & Medium Enterprises (Unisame), Karachi, has rightly expressed concern over the possibility of exclusion of its members from the proposed Textile City project.
The anxiety appears to be based on the plan unfolded by the federal industries and production secretary, Javed Ashraf Hussain, the other day that each investor intending to establish his plant in the Textile City area, would be offered a plot of the minimum-size of five-acres.
Further, any industrial unit desirous of a bigger plot, would have to apply for a second five-acre plot adjacent to the first. There was no mention of the earlier proposal to offer smaller plots, and therefore the union of SMEs is perturbed.
It has been demanded by the SMEs that in order to facilitate active participation of this sector in the Textile City, plots of a minimum size of one acre should be provided in the scheme.
The SMEs union has argued that its member-enterprises would not be able to afford to purchase a large-size plot of five-acres which would be an uneconomic investment for them having smaller production facilities to operate. This is unquestionably a reasonable argument.
Moreover, the Textile City project could not be considered complete in all respects if the SMEs associated with the textile industry as actively as the bigger investors, are left out for one reason or the other.
As pointed out by the SMEs, wide-ranging manufacturing facilities such as readymade garments, hosiery and towel manufacturing, medium-size knitted fabrics manufacturing units etc, contribute significantly to exports of a diversified range of textile products.
Additionally, other segments of the SMEs in the textile sector include suppliers/manufacturers of threads, buttons, dying and printing, packing materials etc, which play an important role to support the production range of bigger textile units.
The enthusiastic response from the SMEs to seek participation in the establishment of diversified textile manufacturing facilities in the Textile City is undoubtedly a highly encouraging aspect which is reflective of growing interest in industrial investment activity.
There is no reason why smaller plots should not be demarcated for the participation and growth of SMEs in the textile sector. As disclosed by Javed Ashraf Hussain, in his briefing in Karachi the response from almost all the leading textile sector industrialists has been found to be very encouraging.
They are prepared to go ahead with the establishment of their plants in the Textile City as soon as all formalities were completed by the government.
It is expected that the project would take off over the next two and a half months period when a ground-breaking ceremony would be performed.
The project is going to be a unique example of participation between the public and the private sectors.
The initial paid-up capital of one billion rupees would be shared between the public and the private sectors in addition to the equity investment from Port Qasim Authority, KEPZA, Pakistan Steel, PIDC, National Bank of Pakistan, the financial institutions, namely, PICIC, Pak-Kuwait Investment Company, Pak-Libya, Pak-Oman, Saudi-Pak, etc, are going to participate with equity investment.
The Textile City will be owned and managed by a joint stock company for the registration of which Articles of Association and Memorandum are reported to have been finalised.
It is indeed a welcome feature that the project would be launched as a corporate company unlike the Karachi Export Processing Zone and other similar zones in the country where the public sector management lackes the desired level of efficiency.
The area is expected to be fully self-reliant in power generation for which an independent power plant will be established while all other infrastructure facilities like water and drainage, gas supply etc, have been ensured by the agencies concerned in Karachi.
The price of land in the Port Qasim industrial area is reported to be one million rupees per acre but the ministry of industries is looking forward to a suitable concession.
For this purpose, a summary is likely to be submitted to the ECC shortly. It is expected that after the implementation of the scheme and establishment of individual textile units in the area, exports of textile would increase by $2.5 billion.
Thus Pakistan's total textile exports are likely to rise to $10 billion from the present level of $7.5 billion.
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