Experts of the All Pakistan Textile Mills Association (Aptma) have prepared "Industry Projections 2005-10" envisaging an investment of Rs 300 billion and annual textile exports of $ 16.4 billion during the next five years.
Talking to Business Recorder here on Sunday experts said that they have made their realistic projections on the basis of (a) historic expansion in the textile industry in Pakistan, (b) relocation of textile industry from high-cost to low-cost countries, i.e. China, Pakistan and India, (c) increased market access in EU, USA and Canada, (d) better revealed competitive advantages of Pakistan, (e) historic growth in domestic consumption of textile products i.e. yarn and fabrics, and (f) since textile industry is being relocated from developed countries, demand of basic items is increasing in these countries.
These experts were of the view that under globalisation textile industry is being relocated to cost competitive areas. Therefore, value-addition in textile would take place where strong basic textiles exist. Therefore, textile industry and exports will expand in China, Pakistan and India.
REVEALED COMPETITIVE ADVANTAGES: The experts said that Pakistan textile industry is relatively less sheltered (i.e. tariff protection and subsidies); enjoys an edge in technology i.e. western technology; better cotton yield per hectare than India; an opportunity to attract relocation of American, Korean, and European textile industry; prospects of converting US cotton in Pakistan for export of textiles under duty-free access to USA under TIFA/FTA; and prospects of alliances with Sri Lanka and Bangladesh.
CONSUMPTION: The experts estimated that cotton consumption would reach 17 million bales and consumption of man-made fabric (MMF) would be around 1 million tons during the next five years.
DISTRIBUTION OF YARN 2010
The experts of Aptma foresee yarn distribution as under:
1. Export of yarn 11 percent
2. readymade garments 30 percent
3. Knitwear 22 percent
4. Bed wear sector 28 percent and
5. towels and other made ups 11 percent
GROWTH RATES FOR 5 YEARS
1. Man made Fabric (MMF) (production). 11.1 percent per annum
2. Spinning (production) 6.0 percent per annum
3. Weaving (production)/11.0 percent per annum
4. Finishing (production) 11.0 percent per annum
5. Knitwear (exports) 30 percent per annum
6. Readymade garments (exports) 6.85 percent per annum
FUTURE PROSPECTS (2010)
1. Fibre consumption is projected to increase to 3.9 million tons: Cotton: 2.9 million tons
MMF 1.0 MILLION TONS
2. Production of basic textiles will increase
3. Value-addition in basic textile products
4. Exports of basic textile will decrease i.e. domestic consumption of these products will increase
5. Distribution of yarn will change in favour of value-added sector, and Exports of value-added textile will increase.
BASIS OF GROWTH: The experts said that these growth rates have been estimated on historic performance of production and exports of textiles. Certain growth rates are based on exports performance under availability of market access to value-added sector. In certain areas growth rates have been estimated after considering opportunities under post-ATC era and investment already made by the industry to avail potential made available to it..
The experts expect that exports in basic textile would decrease as local consumption in these sector would increases. Therefore, exports from yarn and cloth are expected to decrease whereas exports in value-added sector would increase.
The experts said they were confident that exports in bedwear, knitwear and readymade garments would also show good potential for growth and it is expected that these sectors would gain in exports. The quantum of exports expected from each sector is : spinning $ 600 million; weaving $ 800 million; bedwear $ 3000 million; knitwear $3,500 million; readymade garments $2,500 million; finishing $ 2,500 million; other made-ups $ 3,500 million. TOTAL $ 16,400 million.
Investments expected to be made till 2010
1. MMF Rs 113,000 million
2. spinning Rs 154,000 million
3. weaving Rs 3,450 million
4. finishing Rs 4,250 million
5. knitwear Rs 11,640 million
6. Readymade garments 13,290 million.
The experts said that the present structure of textile industry is unbalanced in favour of basic textiles and 35 percent of the textile exports are in basic textile products. They said that 'Textile Vision 2010' lays stress on value-addition in basic textile products which is not difficult to achieve with the reigning upbeat mood of the textile industry.