Trade Policy proposals for 2005-2006 on behalf of PRGMEA Association. The outline of the problems being faced by the Industry and recommendations are:
COST OF DOING BUSINESS: Cost of doing business is quite high in Pakistan and admitted by official quarters as well. Some of them are High cost of utilities - electricity, gas, fuel etc., Lack of Infrastructure, roads etc., Delays in Sales Tax refunds, Communication, Shipping - Port Qasim Charges and abnormally high container handling charges by the shipping agents.
COTTON PRICES: When Cotton prices increase globally, local prices jump erratically. Lack of proper crop monitory, lack of crop estimates and lack of contamination - free cotton availability. This resulted in cotton prices surge although the end product prices do not increase and our industry come under severe pressure. Declining Exports are the proof of this crisis in post quota free regime also.
LAW & ORDER SITUATION: Our customers have now, after started visiting factories, Fashion business is such that one to one meetings are necessary. Highway robberies, manhandling of businessmen even while drawing cash. Due to uncertainty on account of political unrest valuable orders are lost.
VALUE ADDED SECTOR: According to Ministry of Industries recent survey publicised. One bale (170 kg) of raw cotton fetches US$119. Knit garments earn US$140 and woven garments, topping the list, earn a staggering US$1561 for the equivalent of one bale of raw cotton. It is evident that the survival of the country is on value added sector and PRGMEA request focus on our labour-intensive industry.
Special attention has to be paid. A value added Textile Industry unit with an investment of a mere Rs. 50 million provides employment to about 600 workers. Textile in general and value added sector in particular has tremendous potentials.
It is hoped that the proposals will be given due consideration and considered for incorporation in forthcoming Budget and Trade Policy for the year 2005-2006 such as:
1. Sales Tax refunds to be expedited.
2. Sales Tax rate be reduced from 15% to 5%. Higher tax rates attract corruption; lower rate will reduce blocked liquidity.
3. SRO (410) be extended indefinitely to run paralleled with DTRE (Duty & Tax Remission for Exports). DTRE application is still in dole-drums.
4. Garment Machinery and its parts import be allowed duty free by the Industry as well as the commercial importers. Currently ONLY under SRO 554 (bonded factory) it is duty free.
5. Garment City Projects be put on fast track. Pilot Garment Cities Projects be started immediately with a completion deadline in Karachi, Lahore and Faisalabad; as was announced in Trade Policy 2004-2005.
6. 10% subsidy or duty draw back be announced to meet the international competitors challenges.
7. Input costs of all items raw materials, accessories, trims etc. have increased upto 25%. At-least 10-12% adjustment is needed to off set the abnormal increase.
8. Indirect additional expenses on electricity, gas, telephones, water over years have gone very high. On ginning Sales Tax is nil. It be extended to Readymade Garments also Bangladesh allowed this concession last year.
9. Power generation be allowed as liberally as possible. Due to nature of the industry (single 8 hour shift) industry be allowed to share the power generated by neighbours, irrespective of being another company. Currently this is not allowed.
10. Allocated exhibitions subsidy is allowed on up & down freight on exhibits, refreshments, security, interpreters etc. as being done by EPB on their Government managed exhibitions. If the associations do a better job of participating in the exhibitions, why are Associations not treated at par with Government Agency.
11. One window operation be started and regulatory agencies be barred from visiting export industries. A fixed levy may be charged at the export proceeds stage. This will solve the social compliance issue as well.
12. 10% EDS should be spent on infrastructure development of the industrial areas on top priority basis, which is 100% contributed by the industry.
13. Commercial Councillors conferences be held often to spur the marketing drive in Europe, USA/Canada and Central Asian Republics etc.
14. Commercial Councillors budget be increased taking into account the size and potential of that country (They are reportedly poor staffed and always short of funds).
15. Image building of Pakistan be initiated by Missions Officials and other dignitaries visiting abroad.
16. Pakistan Compliance initiative be launched. Government level support in dissemination of rules and regulations is called for and also allow subsidy.
17. Effluent water treatment plants in all of the industrial areas be set up by Government.
18. Serious efforts be launched for the renewals of GSP.
19. Legal experts on WTO related issues be employed by EPB, to take up issues like anti-dumping duty, GSP withdrawal etc.
20. Cotton crop monitory and publicising be undertaken with the help of state of the art facilities available today (satellite etc.).
Textile Industry employees 30% of the total workforce of Pakistan, constitutes 46% of value added sector manufacturing and 67% of total exports of Pakistan. While the country produces around 16% of world's total raw cotton but has yet an access of ONLY 2.4% of the global textile trade.
21. Acquiring mother ship of Pakistan exports for dispatch directly to Europe etc. currently Pakistan exports are taken to Dubai and then sent to UK etc.
22. Since January 2005, SMEs have almost lost foreign business. This is evident from a number of firms seeking Membership with the Association, hardly 40-45% are registered so far. (60 firms are registered against 175 last year) in North Zone. It appears that no export orders have come to small exporters.
Letter address to about 33 units to form Lahore garment consortium type organisation has not been responded inspite of reminders. UNIDO representative has also been suggesting meetings at Association level.
2004-2005 Government statements that cost of doing business will be reduced enhancing the capacity to compete is just table infrastructure, utilities, subsidy promises etc -none has been fulfilled. WTO system has comes up where there are established contact. In the country SME's are drawing shutter due to 'no demand from abroad'. CMT system is also not properly organised.
There is a big communication gaps amongst sizeable units and smaller one.
23. Bilateral and regional preferential Trade agreement need to be concluded. PTA with China is said to be had been sighted. The trade has no authentic information of import and export items to be traded between the two countries. The country is however with Chinese accessories to any size of equipment's and finished products.
24. There was a scheme to acquire space in high Tariff prestigious shipping malls. No news of any development.
25. Agreement with EU is also not known. All effects to seek duty rebate appears to have failed.
26. No proper announcement of long-term fixed mark-ups finance scheme said to have launched by SBP is known to small exporters. It was said to carry 5-7% mark up of repayable over a period of 2 to 7 and half years.
27. Diversification of products and inlet in doubt is a important thrust - but no successful efforts in locating by EPB etc is available.
28. As to whether consultants have been hired by EPB for facilitating technological up-gradation and export marketing is not known. Similarly work done by EPB on brand name acquisition and franchising foreign brands is not known.
29. Joint ventures with foreign partners who will initiate what are effects of Commercial Counsellor abroad.
30. Effects to develop supply chain is not known.
31. No positive have been witnessed to assist improvement in productivity and product range especially in high fashions.
TOP 20 EXPORTERS OF TEXTILE QOUTA CATEGORIES ON ALL PAKISTAN BASIS ON 2004:
1. M/s. U.S. Apparel & Textiles (Pvt) Ltd
2. M/s. Rajby Industries.
3. M/s. Ali Murtaza Associates (Pvt) Ltd
4. M/s Azgard Nine Limited. (Formerly: Legler-Nafees Denim Mills Ltd)
5. M/s Talon Sports
6. M/s Al-Karam Textiles Mills (Pvt) Ltd
7. M/s Mr Denim (Pvt) Ltd
8. M/s Abdullah Apparels (Pvt) Ltd
9. Digital Apparel (Pvt) Ltd
10. M/s Joes Fashion Export (Pvt) Ltd
11. M/s Musterhaft (Pvt) Ltd
12. M/s Fatani Impex.
13. M/s Casuals Mode (Pvt) Ltd
14. M/s Delta Garments Ltd
15. M/s. Star Denim (Pvt) Ltd
16. M/s. Ali Enterprises, Karachi.
17. M/s. Belos Clothing (Pvt) Ltd, Sialkot.
18. M/s. Sytlers
19. M/s. Ashraf Industries (Pvt) Ltd, Sialkot.
20. M/s. Sesil (Pvt) Ltd, Sialkot.
TROPHY HOLDERS:
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Sr. NO NAME OF FIRMS
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1. M/s. SNS Textiles (Pvt) Ltd (Formerly: SNS International), Lahore
2. M/s. SNS Textiles (Pvt) Ltd (Formerly: SNS International), Lahore
3. M/s. Rahman & Rahman, Karachi
4. M/s. Rajby Industries, Karachi
5. M/s. Pensy Garments (Pvt) Ltd Lahore
6. M/s. Rajby Industries, Karachi
7. M/s. Nizam Sons (Pvt) Ltd, Sialkot
8. M/s. Rizwan American Corp, Sialkot
9. M/s. A.M. Merchandising, Karachi
10. M/s. Ambition Apparel, Lahore
11. M/s. Rafi Sons Textile, Karachi
12. M/s. Fareena Textiles, Karachi
13. M/s. Shan Textile, Karachi
14. M/s. Rajby Industries, Karachi
15. M/s. Apparel Concepts, Karachi
16. M/s. Rajby Industries, Karachi
17. M/s. Harapa Textile Mills Limited, Lahore
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Company having earned highest foreign exchange for export of Textile non-quota categories items in 2004.
M/s. Al-Karam Textile Mills (Pvt) Ltd Karachi
Company having obtained highest FOB value for export of Textile non-quota categories items in 2004.
M/s. Joe's Fashion Export (Pvt) Ltd, Karachi
Exporter of Traditional / Non-Traditional
Pakistan's Clothing and Bridal Wear in 2004.
M/s. N.J. Garments, Lahore.
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