Pakistan being the fourth largest producer of cotton in the world, has a relatively developed structure in basic textiles. There are more than 1221 Ginneries providing cotton to 457 Spinning units with a capacity of over 10 million spindles and more than 150,000 rotors. The weaving sub-sector has about 25,000-27,000 shuttle-less/Airjet looms and 225,000 conventional looms.
The up-stream industry of Finishing, Garmenting consists of about 5000 Garmenting units producing 640 M pcs annually, based on safe estimate an approximate 55 M Kgs of Terry Towels, 35 M Kgs of Canvas, and 5.5 M pcs of Knitwear is produced annually.
The Textile Industry today contributes 11 percent of GDP, with exports of US dollars 8.3 billion annually, and employs over 40 percent of the workforce in the manufacturing sector, making it as the most resilient pillar of the economy.
Industry has acted positively to the economic reforms introduced by the government. The recent five years have seen unprecedented growth and confidence in the industry. The impressive growth of industry has been predicated upon the continuity of Government policies, other developments that have helped fuel this growth are:-
-- A long-term fall in interest rates
-- Strong foreign exchange reserves
-- Exchange rate stability
-- The removal of Sales Tax on Cotton
-- Access to alternative sources of energy
-- Aggressive investment and technology up-gradation by industry
Our cotton consumption estimates this year are in excess of 14 million bales, and we are confident that the consumption can be even higher, if the international orders are received as expected.
Textile products of Pakistan have developed markets around the world. Quality conscious markets like USA, Germany, UK, Hong Kong etc are major importers of Pakistan's Textile products.
Bulk of the Textile products exported from Pakistan used to be basic textiles specially yarn and grey fabrics, but now exports of value added items are rising. With the new market access made available to Pakistan, it's textile products have made considerable inroads in the international marketplace.
The largest importer of Pakistan's Yarn traditionally has been Hong Kong, followed by South Korea and China, while in the fabric category. Exports are high to USA, Turkey and Hong Kong, a good quantity of cloth is also been exported to Sri Lanka and Bangladesh.
The year 2005 has brought new opportunities as well as challenges for the Textile industry. Studies conducted on post ATC (Agreement on Textiles and Clothing) scenario agree that Pakistan, India and China will be main gainers, realising this the industry has invested to the tune of US $4 billion in the last four years, in the textile sector.
The mind-set of businessmen have changed, they now monitor and follow international developments, much more keenly and are interested in developing trade links with global partners. The privatised and liberalised banking sector has shown great confidence and support for expanding industry. The government attitude over the years has also improved greatly; the policy makers are now aware of the international business dynamics and therefore are considerate in framing policies. It is due to this mind-set of providing a level playing field that the industry is hopeful about the coming era.
The cost of doing business has become a critical factor for survival of industry in international business. Cost contributing factors like power rates, raw material prices, must be maintained at competitive levels, if we want the industry to thrive.
The industry is foreseeing a potential for an even stronger growth in the next 5 years. We are blessed with the fourth largest cotton crop in the world. This year we have had the largest ever cotton crop in Pakistan's history, and the industry has stepped up to the plate, buying at record levels.
Keeping in view the present growth of capacity in the industry we foresee, that the Pakistan Textile industry, would be require more cotton even with 14 million bales production and therefore we would have to pay closer attention to Man Made Fiber for substituting cotton and diversifying our product line. Our fiber mix is heavily biased in favour of cotton.
We are currently at 74% cotton and 26% man-made fibers, whereas the world fiber mix is 40% cotton and 60% man-made fiber. Steps should be taken to encourage the use of man-made fiber. The government should ensure the availability of man-made fibers at internationally competitive prices, MMFs which are not produced locally should be importable free of customs duties.
Another important factor in doing international business is transportation links, Pakistan is fortunate to be located at strategic position geographically, but our transportation infrastructure is not tuned with the industry requirements. Development of a modern, reliable infrastructure to reduce lead time and cost of transportation is an emerging priority for our industry. The industry has already started feeling the pinch due to its rapid growth, and the inadequacy of the supporting infrastructure for transporting the exportable surplus from up country manufacturing clusters. The road network and rail link to the port should be developed to ensure transportation of goods in 24 hours to the port from our major manufacturing districts. The development of warehousing facilities should also be actively promoted.
The availability of trained human resources is another challenge for the industry. APTMA is funding two degree awarding institutions, one at Karachi and another at Faisalabad, which are the primary source of textile engineers in Pakistan, but we must also cater for the value adding chain, the survival and growth of our labour-intensive garment industry will depend on the establishment of exemplary training institutes and programmes that will help them attain global standards of efficiency. In particular, the rural women, workforce be trained by encouraging the set-up of clusters of garment units in these areas.
Free Trade Agreements are playing an important part in international trade, countries that have no real inherent comparative advantage in producing textile goods will be able to supply their products at a lower price than countries that produce more efficiently. There is a need to improve the image for Pakistan. The Government has progressed significantly on this issue, but still a lot of ground needs to be covered.
The private sector is ready to work with Government to develop alliances with countries for re-location of their industry based on competitiveness. We see China as a potential trading partner and wish to take advantage of our proximity and special relationship with that country.
A major challenge for the Trade Associations in the near future will be the demanding role of the Associations. The membership would expect the Associations to provide leadership for encountering the challenges from phasing out of Multi Fiber Agreement and the Agreement on Textiles and Clothing. The Government and in the industry must be prepared for intensified activity in this department. The Associations must develop capacity by enhancing research and development activities and assist policy formulation, to complement Government efforts Industrial Associations need to be strengthened and facilitated by Government in their drive to collect and collate industry statistics. We are extremely optimistic about the role of the newly created Textile Ministry in developing linkages with other ministries to collect, compile and publish industry data.
Today we stand on the threshold of an extremely critical period. We have an opportunity to take a quantum leap and become a major player in world textiles. We see new challenges ahead, we are now in a world without quotas but not without barriers to trade. With the new generation in the textile industry, we have a responsible and proactive private sector and a responsive government.
Aptma Research & Development Cell.
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