All Pakistan Textile Association (Apta) Coordination Committee Chairman Tanveer Sheikh has said that spinning mills have faced heavy losses mainly because of the high cost of production, including the gas prices being increased to Rs 24 per MMBTU - this increase is 38 percent in just over two years.
The Wapda electricity tariff has been increased recently by 10 percent and the reliability of supply is another major issue. Minimum wages have been increased by 84 percent, transportation and costs of stores, packing materials like polybags, paper cones, lubricants all increased over 80 percent, and the cost of finance has been increased by 239 percent in two years.
After meeting All Pakistan Textile Association members here on Monday, he told the media men that the meeting has decided that the issues of loans and advances to be negotiated with banks in friendly atmosphere.
He said the members proposed a plan to close the mills for a week though the chairman refuted it. So the meeting decided that the Apta would again ask the President to help resolve the issue and save the national assets and millions of workers from unemployment. The meeting also decided that the Apta would go on a strike on August 5 and march towards Islamabad to protest outside the President House, if the government failed to meet their demands.
He said the government should buy all lint cotton in the season through the Trading Corporation of Pakistan (TCP) at a fixed price and sell to spinning mills throughout the year. They claimed that the textile minister and the ministry of commerce had ignored the textile spinning mills and done nothing in the recently announced Trade Policy. "Our spinning sector is the most efficient and labour force is also most productive and this fact has already been admitted and highlighted in the Gherzi Report of Switzerland," he added.
He warned that the mills might fail to secure raw material if the government remained stubborn on the issue, adding, "We urge the government to tell banks to allow working capital limits to the spinning mills."
While highlighting the importance of the spinning industry, he said textile accounts for 38 percent of the manufacturing sector employment, 64 percent of all exports, large sector of investments from banking, textile accounts for 50 percent of the total manufacturing advances, 11 percent of the total GDP therefore government should not ignore this vital sector and remedial measures like lower rate of mark up, R&D must be provided.
He said, it had been decided that personal guarantee should not be invoked in case of limited companies, criminal provisions must be removed from banking recovery laws and exit strategy through bankruptcy law like chapter 11 of American laws should be introduced in the country.