Leather garments exports down 24 percent: 'industry completely ignored by government'

The high cost of production has pull down exports of leather garments by 24.15 percent during July-May period of 2006-07 in the wake of mounting utility tariffs and lack of research and development (R&D) assistance to the leather garments sector, industry sources said on Monday.
Chinese government is sharing 50 percent cost of production with its industries, whereas Pakistan government has completely ignored the leather garments industry, leaving it on the verge of closure, resulting in production and exports decline, they said.
Official statistics show that leather garment products slumped 24.15 percent during July-May 2006-07 period to $349.49 million as compared to $460.79 million of the same period of last fiscal year (2005-06), depicting shrinkage of $111.29 million.
Similarly, exports of leather garments went down by 23.22 percent during May 2007 to $31.16 million against $40.59 million of May of last fiscal year, declining by $9.42 million. Exports of leather garments also plunged six percent in May 2007 against April 2007 to $31.16 million from 33.12 million of April 2007.
"Leather garment industry is undergoing crisis consistently for the last few years due to irresponsible attitude of the government towards it, which needs effective, constant and long-term policies by the government, otherwise its survival is at stake," said Choudhry Zulfiqar, Chairman Pakistan Leather Garment Manufacturers and Exporters Association (Plgmea).
He said that 16 percent increase in raw material prices had further spurred the cost of production, besides increased utility charges and lack of R&D assistance, bringing about decline in production and exports.
"China is our major competitor in the world market. Despite our commodity being of the best quality its cost is 17 percent higher as compared to Chinese leather garment," he elaborated. He said that if government did not chalk out a long-term effective plan for this industry, the inevitable crisis was in the backdrop to cut short the industry production to mere few percent.
China is supporting its industry by providing 50 percent assistance, which has given edge to its production in the world market against Pakistani products and on the other hand, local industry is striving in the face of high cost of business, Chairman Plgmea said.
He said that during last two years, R&D assistance to leather industry had continuously been suggested to leather garment industry. He said that Akram Shaikh of Planning Commission had also recommended in a report prepared for Prime Minster Shaukat Aziz and President General Pervez Musharraf.
Zulfiqar said that all recommendation for the development of this sector had been made but could not be presented in Economic Coordination Committee (ECC) for approval, leaving it in the crisis, demanding that steps to be taken for its development.
He claimed that with 6 percent R&D assistance, the leather garment exports would double in the next two years. He pointed out that raw material in the country was also falling short to demand for leather garment production.