Challenges Faced By Pakistan Textile Industry

BBA 5rd Semester A

Batch 2010- 2014

Group Members

Haris Khan

Abdullah Safir

Sardar Abdul Saboor

Contents

Textile Industry

Policies

Statistics

Problems

Recommendations

Textile Industry

The textile industry is primarily concerned with the production of yarn, and cloth and the subsequent design or manufacture of

clothing and their distribution. The raw material may be natural, or synthetic

Production Process

Cotton Ginning Filaments

Weaving

Printing &

Dyeing

Statistics

Pakistan has dynamic, vigorous and export oriented textile industry that has an overwhelming impact on economy.

Textile being largest industrial sector generates the country’s highest export earnings of about 58%; providing the bulk of employment (39%) to largely under utilized workforce, and

contributes 8.5% to GDP.

Textile industry trend during last ten years.

The Multi Fibre Arrangement (MFA) governed the world trade in textiles and garments from 1974 through 2004, imposing quotas on the amount developing countries could export to developed countries.

Source

Economic survey of Pakistan SBP.

Challenges

• Energy Shortage– As a consequence of load shedding the textile production

capacity of various subsectors has been reduced. The representatives of the all textile associations presented their serious concerns on the huge losses being incurred due to electricity & gas load shedding and the instant rise in the Electricity tariff. They said that the industry has already been crippled due to record high load shedding.

• High Taxes– The provisions of Finance Bill 2009-10 are not textile

industry friendly at all. Provisions like reintroduction of 0.5% minimum tax on domestic sales, 1% withholding tax on import of textile and articles, 16% Federal Excise Duty on banking and insurance services besides withdrawal of exemption of 16% sales tax and 4% withholding tax on machinery and parts in the Finance Bill 2009-10 are badly affecting already crippled industry.

• Image Problem– United States cancel more than 50% of textile orders of

Pakistan .US also impose a high duties on the import of textile of Pakistan which effect the export in a bad manner. US & EU are the major importer of Pakistan textile which creates a huge difference in export of Pakistan textile after imposing a restriction on import of Pakistani textile goods.

• Cotton Production

The cotton production dropped to 12.845 million bales up to March 15, 2013 as against 14.548 million bales produced in

the corresponding period last year.

Data was jointly compiled by the Pakistan Cotton Ginners Association, All Pakistan Textile Mills Association and Karachi Cotton Association.

Other Factors

Raw material Prices

Lack of new investment

Lack of Research & development (R&D)

Because of these problems Pakistan’s exports which declined by over 9.64% during the last 11 months. On the contrary, the

textile exports from India, China and Bangladesh have increased by 5%, 6% and 8% respectively during the same

period.

Chairman Rana Arif Tauseef

Pakistan Textile Exporters Association(2012)

Textile Policy 2009 – 2014

Textile Policy 2009 – 2014

• Objectives– Support development of allied industry– Promote research and development– Encourage exports

Primary Target

The primary target of the policy will be to double the rate of value addition in textiles chain from the present $ 1 billion per million-bales to $2 billion per million- bales over the next five

years.

Recommendations

• Revision of Government policies is required

– There are non-conducive government policies in term of bank loans and interest rates.

– The government may give subsidies to share the burden of the industry.

• Focus on Value Addition– Pakistan is a leading exporting nation in raw yarn, cotton,

and fabrics. If we emphasis on the value added products like garments, Hosiery, knitwear and other textile madeups, the export volume of textiles can be increased by manifolds. In this respect top priority should be given to stitching industry that leads to highest value addition and employment generation

• Technology Modernization

– Sophisticated technology should be introduced to compete with the other countries (India, Bangladesh & China) in the global market in term of cost and quality.

• Human Resources Development

• The Textile Board should establish a separate training wing as a Center of Human Resource Development where training courses should be conducted for the capacity building of labor. There is also urgent need to increase the number of such Vocational Institutions where modern technical education is provided.

References

http://www.ptea.org.pk/

http://www.textile.gov.pk

http://www.ptj.com.pk/

http://www.aptma.org.pk/

Any Questions…?

FIN