Announcing to disassociate with the Ministry of Textile Industry, the All Pakistan Textile Mills Association (Aptma) has decided to go on strike from March 18, if the Prime Minister or the President did not resolve the issue of cotton yarn export.
Aptma Chairman Anwar Ahmed Tata, addressing a press conference on Tuesday at Aptma House here, said that Aptma has decided to disassociate itself with the Ministry of Textile Industry due to its discriminatory policies, and appealed to the President and the Prime Minister to intervene and provide justice to the spinning industry.
On the occasion, S M Muneer, Shahzad Ahmed, Yasin Sidik and other members of spinners industry were also present. Before the press conference an extraordinary general meeting of Aptma was also held, which strongly condemned the discrimination attitude of Ministry of Textile Industry with the spinning sector.
"If no action will be taken by the Prime Minister and the President within the next ten days to resolve the spinners'' problems, Aptma members will go on strike, followed by further protest in any manner it deems fit," Tata said. He said that the Ministry of Textile Industry "has become a party and is unduly supporting" the downstream industry.
He said that the negative attitude of the Ministry of Textile Industry would badly hurt the spinning sector which is in its revival stage after three years'' extensive shocks due to shortage of raw material, high cost of doing business, and international recession, and has suffered huge losses thus affecting its viability resulting in piling up of non-performing loans in the banking sector, out of which more than 30 percent belong to spinning industry. "In spite of repeated appeals to the government to save this capital-intensive sector, no assistance has been provided," he added.
He said that the Ministry of Textile Industry took unilateral decision to reduce the quantitative restriction on export of cotton yarn without taking Aptma into confidence, even though Aptma has always been against any restriction on export of cotton yarn and this further reduction and withdrawal of exemptions would deal a death blow to the spinning industry and would result in distortion of entire textile chain.
Tata said that Pakistan''s spinning industry is a world class industry, and a huge investment in foreign exchange has been made to ensure abundant supply of yarn for domestic industry.
He said that if the government did not lift the restriction/quota on export of yarn, "our members will lose their valued customers'' market share and this will also damage the reputation of Pakistani suppliers". He urged the government that it should provide duty-free import of manmade fibre, and abolish all countervailing measures to reduce pressure on the consumption of cotton and encourage use of manmade fibre.
Tata said that after restarting of the closed spinning units the overall production of cotton yarn in the country had increased to 241,000 tons per month, which could be verified by the data of Federal Bureau of Statistics. Export of cotton yarn from July 2009 to January 2010 is about 60,000 tons per month, which is 25 percent of the production of cotton yarn as per past practice.
The Aptma Chairman said that the government''s interference is destroying the free market mechanism and this would directly hit the downstream sector in times to come. He said that the spinning sector imports around three to four million bales of cotton every year to meet its requirement and, in case such policies of the government continued, the spinners would be hesitant to import cotton which would result in closure of mills, thus curtailing further yarn production.
He said that the government should not penalise the spinning sector to protect the vested interests of a few. The government should provide incentives to the downstream industry from its own resources, if so desired, he added. He urged that the government should encourage local suppliers of yarn through economic solutions such as reduced mark-up rates on short and long term loans and reduction in income tax rate from 35 percent to 5 percent to encourage local sales of yarn.
He said: "We believe in free trade mechanism and the development of local industry through efficiency, productivity and competitiveness." He further urged the government to review its policies and immediately lift the quota restriction on export of yarn in the best interests of the industry.