Renowned spinner and a leader of All Pakistan Textile Mills Association (Aptma) Shaikh Maqbool Ahmed who is father of FPCCI President Tanveer Ahmed Sheikh has said that organisation would protest if government neglected spinning sector in the upcoming trade policy.
Talking to this correspondent here on Sunday he said that it was unfortunate that they had not been able to make their appeals effective enough to be able to convince the govt for prompt and drastic measures. He said that the textile industry in general and spinning in particular had already started closing and would become a dying industry in Pakistan.
He said it was distressing that the impact of this budget has been a net additional cost increase of close to Rs 5 billion on our spinning industry with 65 percent of Pakistan's exports being dependant on textiles, the issues must be faced and addressed at war speed. He said that the trade deficit was already at an all time high and a further closure of this export based industry is clearly not a desirable option.
He said that more than 130 mills closed down and further 100 would follow the suit by the end of this month, resulting in unemployment of 500,000 workers directly and two million people indirectly.
Maqbool Sheikh said that the mark-up costs had rendered the spinning sector uncompetitive, as the industry made its 5 billion dollars investment when interest rates were 4 percent and they are now close to 15 percent, an increase of 300 percent to 400 percent in less than three years. He said that studies showed that those units, which were profits earning units in 2004 were now registering huge losses.
Recalling their request to the government, Maqbool said that 7.5 percent rate of mark up on short and long term loans of all textile spinning industry whether the loans were classified or not, repayment to be over seven years, leasing to be included. He said that 3.5 percent R&D had been provided to the polyester staple fibre industry, which supplies spinning industry, the raw material. R&D was already available to the fabric, garments and processing sector and only sector that was missing is spinning. He said that they had requested 5 percent R&D on all local and export sales of yarn of the textile spinning industry also.
Talking about 'easy exit' he said that many of their members had given up hope of survival and revival or are simply tired of the ongoing cost increases and unfair competition being faced from Bangladesh, India and China who are giving huge subsidies to their textile industry. 'We request that an easy exit scheme be designed for those who want to quit and give up' he added by saying that criminal provisions must be removed from banking recovery laws.