Chairman All Pakistan Textile Mills Association (APTMA) S. M. Tanveer has said that Pakistan Textile industry is on the verge of collapse and needs a special relief package from the government on urgent basis to secure billions of dollars investment and create millions of jobs for people.
Talking to newsmen here on Thursday Tanveer called for setting up a government-industry joint task force to restore industry viability and devise growth path. On the occasion former chairman APTMA Gohar Ejaz, Fawad Anwar of Al-Karam Textile Mills and others were also present.
APTMA chief said that energy crisis, poor infrastructure, uncertain polices, higher interest rate and smuggling were directly hurting the country's textile sector, which is the largest employment provider sector of the country. Recently, APTMA has conducted a detail study on the Pakistan's textile sector aimed at finding out the reasons of the collapse, he informed.
Talking about the industry, he said that Pakistan's some 25 percent textile industry has already been shutdown during the last five years, while there were threats of further collapse if the government did not provide immediate relief to the sector. "Presently, the country's textile industry is facing several issues including closure of mills, declining exports, fast losing world market share, idle of 30 percent production capacity and surge in imports and smuggling of textile and clothing. Therefore, from the last few years no investment and growth have witnessed in the sector as potential investors are reluctant to invest in textile sector", he added.
In addition, comparatively high cost of energy, finance and wages, energy crisis, technology disadvantage and Zero investment incentive and government support is also hurting the sector, chairman APTMA said. Although, Pakistan has successfully got GSP plus status from EU, however despite that the country exports were not increasing and posted a 16 percent decline during last month, he mentioned.
Talking about the policy measures, Tanveer said that Pakistan announced textile policy in 2009 for five year with $2.3 billion incentives, however only $450 million were spent with zero percent growth in textile exports. Second textile policy for the next five years was launched in 2014 with Rs 64 billion outlay, however so far no notification has been issued.
Comparing Pakistan's textile initiatives with India he informed that during the last five years Pakistan has added some one million spindles and 1,300 shuttless/Airjet looms. While, on the other hand India has given some $4 billion incentives to its textile industry during the last five years and it resulted in increase of 79 percent or $16 billion in the textile exports. Indian textile sector has added 14 million spindles, 36,000 Shuttless/Airjjet Looms, besides creating some 16 million new jobs, he added.
Talking about Export Incentives of India, he said that an Export Promotion Capital Goods (EPCG) scheme was introduced by India to promote the import of capital goods for zero duty subject to minimum export obligations. The government extended the benefits of zero duty EPCG beyond March 2013. Government of India also allowed a reduction on export obligation (EO) by 10 percent for domestic sourcing of capital goods.
Tanveer said that Pakistan's 90 percent textile machinery is some 10-year old compared to India's 30 percent and China's 10 percent. China and India were making billions of dollar investment in the machinery and technology side, while Pakistan's textile sector was fighting for its revival, he added. Talking about the relief measures, chairman APTMA said that Pakistan's textile industry needs 24/7 electricity and gas supply at regionally competitive rates and already determined tariff for FY 2014-15 be notified w.e.f. April, 2015. Presently, the industry was facing hours long load shedding and gas supply only for few hours, he mentioned.
He asked the government to exempt export-oriented textile industry from all surcharges, levies, cess and duties being imposed due to Inefficiencies and losses. "Fuel price adjustment due to falling oil prices should be fully passed on to industry to reduce the cost of production," he added.
Availability of raw materials particularly quality fibers (Cotton and MMF) at world competitive price through enhancing better quality cotton production is needed by removing duties/barriers on import of MMF and other specialty fibers to get a healthy growth, Chairman APTMA said.
Proper fund should be allocated for the ailing industry as per textile policy initiative and government make arrangements for reduction in financial costs/charges from spinning onwards through Export Finance Scheme and other fiscal instruments, he added. "Investment support measures should compatible with region and no further increase in minimum wage should be announced without getting a substantial growth in textile industry as well exports," he demanded. Chairman APTMA said that appreciation of Pak rupee has also hurt the exports growth therefore exchange rate should be brought to its realistic value.
The industry also needs export promotion strategies/measures to overcome market edge being provided to competitors by their respective governments. FTA, RTA and bilateral agreements with potential importing countries should be finalised to increase export through tariff reduction, he suggested.
"Government should also incentivise and support textile Industry in order to diversify new products and markets. We also need to strengthen domestic commerce through formalisation of domestic consumption to spare market for domestic industry by introducing Tariff/non tariff measures, countering smuggling and unfair practices," he said. He also suggested government for 15 percent regulatory duty on the import of Yarns and Fabric meant for domestic consumption under the marketing strategy. He called for a campaign with the slogan of "Market Pakistan" to change Pakistan's perception to retain and capture world brands and markets.