All Pakistan Textile Mills Association (Aptma) Chairman Adil Mehmood has said that textile and spinning units have been passing through crises for the last one and a half years. While addressing a press conference here on Tuesday, he said that steps taken by Aptma have had limited success. It is also a fact that the majority of spinning mills is in dire straits.
A number of them have already defaulted on bank loans and a large number is on the brink of collapse. He said that in the presence of such daunting odds, it is to be prudent to let those in the most torment to take representation in their own hands and make final efforts to bring the government to their side. This should not be considered just a political statement.
He also said that ignoring the political undertone that Aptma or the PTA has reflected, it is actually a surge in cynicism which is bursting out in instances of 'mutiny'.
He said that why has Aptma not been effective in putting its points across as bravely admitted by the chairman himself? Five to 10 percent of the big groups, who mostly have support from their own in-house weaving industries, still continue to do well. These groups generally have built up huge financial reserves and quite often have significant investments resulting in large inflow of 'other incomes' coming into their accounts.
Adil Mehmood said that current chairman is also part of a large group with substantial weaving interest. Tariq Saigol has put other proposals forward. The textile minister himself has worked very hard for the textile industry but he himself is not a spinner. This is why most of the proposals consist of LTF for the value-added industry, R&D, further concessions the value-added export industries in the form of proposals of zero rate taxes and DTRE for exporting industries. There is nothing for the single unit spinner even in the proposals, he added.
He said that on the 19th of May, a National Assembly committee met to discuss the textile industry issues. The chairman was conspicuous by his absence. During a recently televised Business Plus roundtable, the Adviser to PM on Finance, Dr Salman Shah did not want to discuss textile and hardly let Aptma chairman speak in a one and a half hours program which centered around cement and banking, he added.
He said that when cotton import from India was allowed by land route, it turned out to be a cruel joke as only long staple cotton was allowed which is used by hardly a minuscule percentage of the larger groups he added.
He said that the single unit spinning sectors problems need to be addressed. He said that personal guarantees should not be asked for. The criminal laws should be removed from banking defaults. Just because we invested our life's savings and made losses does not make us deserve criminal penalties as envisaged in current banking laws. Exit of many smaller mills, contrary of the government's policy to encourage SME and medium sized sector, will make the bigger groups happy as they will have less competition to contend with.
He said that mark up rates have increased beyond the absorbing capacity of the industries. Over 300 percent increase in the mark up rates in a period of two years is not bearable. A way out should be found to bring this phenomenal increase.
Bangladesh and India's subsidies towards mark up to all industries, including spinning are significant and cannot be ignored. We can compete the other spinning mills in the region, but cannot compete other governments, which are providing unfair subsidies to their industries while we are not being given the same, he added. He cited high gas prices, phenomenal increase in wages and wrong methodology of levying taxes as the reasons for low competitiveness of local industry.
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