Pakistan's Textile Industry

[Indus]

Chinese companies to support in revival of sick textile units: Baig

KARACHI (March 20 2009): The government is creating Resolution Trust Company for the revival of sick textile units with the support of Chinese companies who have agreed to invest in these units, Federal Advisor on Textile Dr Mirza Ikhtiar Baig said this at the launching of 6th Textile Asia 2009 on Thursday.

He said that presently there were about 90 sick textile units, which were closed in 2008. These old units will be merged and revived, he added. He pointed out that government was working on liquidation laws and bankruptcy laws for a respectable closure of business. Failure and success is a part of the business and entrepreneurs should be allowed to declare bankruptcy and liquidation of failed business, he noted.

Referring to measures to boost countrys textile exports, Dr Baig said that the government has hired two top consultants of the world, M/s Warner International of USA and M/s Gharzi Intl of Switzerland to find out weaknesses in our textile exports and suggest ways to boost exports. They will tell us how the world is moving and how our textile sector should move, he added.

He opined that Nicole Monti of Warner USA already had a meeting with top authorities in Pakistan while the top executives of M/s Gharzi will visit Pakistan soon and meet the authorities. Textile Advisor said that these consultants have informed the government that apparel sector in Europe was planning relocation of their units in other countries.

"They can come to Pakistan if they are provided enabling environment here. The consultants have pointed out that at least 25 leading international brands including Gale and Tommy Hilfiger. I have given a list of ten brands to these consultants and they will co-ordinate with them so that they can relocate their plants in Pakistan", he added.

Talking of high cost of doing business, the advisor said that the country would get away from a cross subsidy, which was benefiting fertiliser business at the cost of industrial sector.

He said that efforts were on to get duty access in European Union for the textile sector. Much progress has been made at the joint ministerial meeting of Pakistan and EU in this regard. We will get you duty free access in EU, he maintained. Talking of other incentives to textile sector, he said that duty drawback on local purchase will be provided to exporters and Textile Ministry has moved a summary to the government in this regard. This is a substitute of R&D scheme.

Dr Baig said that exporters have started receiving checks against R&D claims involving Rs 4 billion and the payment against the remaining Rs 6 billion will be made to exporters soon. He said that the textile sector would be made zero rating regime in the coming budget. He appreciated the efforts of E-commerce Gateway in organising the exhibition.

Earlier, Textile Commissioner Idress Ahmed said that $7 billion were invested in textile sector of Pakistan in plant and machinery between 1999 and 2008 for capacity building. Textile Commissioner Idress Ahmed and President Ecommerce Gateway were also present on the occasion.

http://www.brecorder.com.pk/

[Indus]

R&D support demanded to rescue textile sector
FAISALABAD (March 21 2009): Zero rating of textile exports and continuation of Research and Development (R&D) support is the sole way out of present crisis confronting countrys textile exports, which will restore competitive edge in the international markets. Unanimous demand to buttress the falling exports of textile and review the sickening industrial sectors was voiced by the exporters in the executive committee meeting of Pakistan Textile Exporters Association (PTA).

Briefing the newsmen, Chairman, PTA, Muhammad Yousaf and Vice Chairman, Rehan Naseem Bharara said that the impact of world economic meltdown has started blemishing Pakistans textile, as 25percent of weaving industry and 50percent of ancillary supply units have closed down in the upcountry textile centres. This has resulted in large-scale lay off in thousands of workers in handloom or power loom units. Enormity of the approaching sunami could be gauged from the sleep decline in exports of first two months of new Calendar year with 6.94percent decline in January and 17.68percent drastic downslide in February, they emphasised.

The exporters are facing twin menace of lack of export orders and refusal to accept destined consignments as well as default in payment of accepted and cleared goods, the meeting stated.

As a result of international recession, the traditional foreign buyers are not placing orders, rather they are refusing to accept the consignments that have already reached their ports or which are on the way at high seas, the PTA member said.

Further, many buyers are defaulting on payments of goods accepted, cleared and received in their goodowns, they elaborated. It was pointed out that 129 containers of Pakistani exporters have been stuck up in Moscow-Russia, as the buyers are defaulting in payment due to drastic 40percent devaluation of Russian rouble, they said.

Similarly, the buyers in Chile, after releasing the goods, are not reimbursing the payment and even not replying to our queries resulting in blocked of huge funds of exporters augmenting liquidity crunch, the PTEA Chairman said. The PTEA Chairman demanded that all the burdensome duties levies, taxes surcharges and overheads on textile exporters may be removed and textile exports should be totally zero rated and assisted to become competitive internationally, as was being done by our regional rival countries.

http://www.brecorder.com.pk/

[Indus]

European Union and USA: duty free access to help boost textile export
KARACHI (March 20 2009): Ministry of textile is working for duty free market access on export of Pakistan textile products to European Union and USA to boost the countrys textile export. While, talking to newsmen Dr Mirza Ikhtiar Baig, Federal Advisor on Textiles, at Soft launching of 6th Textile Asia 2009 Intl exhibition said that duty free access would help to boost the textile exports.

On the occasion Dr Khursheed Nizam, President Ecommerce Gateway, Sohail Aziz, Executive Director, Muhammad Idrees Ahmed Textile Commissioner of Pakistan, Asif Rasheed M.D Al Murtaza Machinery and President TEXMAP Pakistan Abbas Moraj also addressed the Soft Launching Ceremony.

"Ministry already have arranged meeting ambassadors of Italy, France, Netherlands, United Kingdom, Turkey and Germany and they all assured their support for allowing duty free export of our textile goods to their markets", Dr Baig added.

He pointed out that government is also working on liquidation laws and bankruptcy laws for a respectable closure of business. Failure and success is a part of the business and entrepreneurs should be allowed to declare bankruptcy and liquidation of failed business, he said.

Referring to measures to boost countrys textile exports, Dr Baig said that the government has hired two top consultants of the world, M/s Warner International of USA and M/s Gharzi Intl of Switzerland to find out weaknesses in our textile exports and suggest ways and means to boost exports. They will tell us how the world is moving and how our textile sector should move, he added.

Talking about high cost of doing business, the advisor said that the country would get away from a cross subsidy which was benefiting fertiliser business at the cost of industrial sector. "Duty drawback on local purchase will be provided to exporters and textile ministry has moved a summary to the government in this regard, which would be a substitute of R&D scheme", he informed.

He said that government has given some Rs 4 billion for the pending R&D claims and exporters have started receiving cheques against R&D claims, while the remaining Rs 6 billion would be made to exporters soon.

Appreciating the holding of Textile Asia, he said that "its a matter of proud for all of us that Textile Asia is the only Textile & Garment Machinery show of Pakistan and India which is a UFI Approved Event by the Global Association of Exhibition Industry, Paris- France.

I am confident that Textile Asia would attract the foreign investors towards the potential of our textile & garment sectors," Dr Baig said. This world-wide recognition achieved by Dr Khursheed Nizam and Ecommerce Gateway reflects the proof of high quality, thus providing exhibitors and visitors alike with the assurance that they will benefit from a professionally planned and managed concept, he said.

"6th Textile Asia 2009 Intl Exhibition to present revolutionary technologies of more than 329 international brands from 32 countries," said Dr Khursheed Nizam President Ecommerce Gateway.

He said that Textile Asia Intl Textile & Garment Machinery Show is being organised for the 6th consecutive year from 5th to 8th April 2009 at Karachi Expo Centre. He said that there is a huge potential for international textile and garment machinery manufacturers to tap this market.

He said that more than 30,000 local trade and corporate visitors and more than 100 foreign delegates are expected to attend Textile Asia 2009. "The event is designed to act as a podium where it will highlight the products and services of the textile industry not only of Pakistan but also of the International forum," Dr Nizam added, He said that Textile Asia would provide such a platform to SME sector where all the relevant decision makers jointly visit, test and purchase machineries.

http://www.brecorder.com.pk/

[Indus]

Top US lobby for cut in tariffs on Pakistani textiles
WASHINGTON (March 26 2009): The top US business lobby Tuesday urged a cut in US tariffs on Pakistani textiles, saying that trade would be a valuable part of the new US strategy to bring stability to Pakistan. The US Chamber of Commerce and US-Pakistan Business Council issued a report welcoming President Barack Obamas focus on rooting out extremism in Pakistan and neighbouring Afghanistan and urging an emphasis on trade.

US Chamber of Commerce and US-Pakistan Business Council have issued a report welcoming President Obamas focus on rooting out extremism in Pakistan and Afghanistan and urging an emphasis on trade. "Stronger and more stable economic relations between the United States and Pakistan would help advance Americas overarching geopolitical goals in South Asia," the business groups said in the report.

The United States is the largest investor and market for Pakistan, which in November required a 7.6-billion-dollar emergency credit line from the International Monetary Fund as world economic crisis hit the nation. The business groups urged a review of US tariff policy on Pakistan, saying that the duties on Pakistani textiles were higher than those from other key producers.

The report also backed a proposal by two lawmakers - Senator Maria Cantwell and Congressman Chris Van Hollen - to make certain products made in the impoverished Afghan-Pakistan border regions duty-free. In the long term, the United States should consider entering negotiations on a free-trade agreement with Pakistan, the groups said.

"Although the United States stresses the importance of economic growth in Pakistan, American trade policy fails to provide increased market access for Pakistani products in the United States," the report said. The report supported early legislation on the initiative of establishing reconstruction opportunity zones in the Pakistani border regions with Afghanistan, saying the move would provide incentives for investment in the impoverished areas by allowing duty-free export to the United States.

The two organisations applauded Kerry-Lugar initiative in the Senate to triple economic assistance for Pakistan to 1.5 billion dollars annually. They also emphasised bolstering the availability of the US Export-Import Bank and other government financing and insurance to stimulate American private sector investment in Pakistans energy sector.

"In addition to its strategic elements, a broad-based relationship with Pakistan needs to include enhanced co-operation in the areas of trade and vestment and energy security," said Chambers Senior Vice-President of International Affairs and member of the board of directors of the USPBC Myron Brilliant.

"We are actively working with both governments to strengthen our economic ties." The United States is the largest trading partner of Pakistan. Pakistans port total exports in 2007-08 financial year totalled 19 billion dollars, of which 20 percent or 3.7 billion dollars went to the United States.

The US exports to Pakistan rose to nearly two billion dollars in 2008. "Our report also urges the US government officials to work with Pakistan to address bilateral trade and investment opportunities," said Chairman of the board of directors of the USPBC Jay Collins.

"Our members stand ready to contribute to efforts to expand commercial relations between the two countries." Also, the leaders of the two organisations urged the Department of Homeland Security to provide expeditious approval for non-stop flights to the United States from Pakistan as direct flights from Lahore to New York would facilitate trade and investment links. The following are the key recommendations for the Obama administration and members of Congress:

-- Obtain passage of the US foreign assistance legislation, showing that the United States is committed to ensuring Pakistans long-term prosperity.

-- Address trade and investment practices with Pakistan to ensure that American companies find a level playing field.

-- Approve legislation creating reconstruction opportunity zones (ROZs) to promote economic development in Pakistan.

-- Conclude a high-standard bilateral investment treaty with Pakistan to provide safeguards for the US investors.

http://www.brecorder.com.pk/

[Indus]

1.4 million bales of cotton worth Rs 20 billion imported
ISLAMABAD (March 26 2009): Pakistan during the last eight months (August 2008-March 2009) imported 1.4 million bales cotton, worth Rs 20 billion, from India, USA and Brazil, while during the corresponding period of last year 3 million bales were imported, costing Rs 40 billion.

Sources told Business Recorder here on Wednesday that about 0.1 million bales were imported from India, costing Rs 1.5 billion. They said that the country might have to import 2 million bales cotton, instead 1.4 million bales, during the current season.

The recent cotton arrivals report from PCGA, up to March 15, showed that the production of the crop amounted to 11.30 million bales. The contribution of Punjab in cotton production was 8.3 million bales and the share of Sindh was 2.9 million bales.

According to sources, the country may face a shortage of about 2 million bales for 2008-09. Earlier, Pakistans Cotton Crop Assessment Committee said that the country might achieve the cotton production target of 12 million bales for 2008-09. It shows that the country may face 15 percent shortfall in production as compared to the set target.

http://www.brecorder.com.pk/

[singaporean]

The Pakistani textile sector has received an offer from the government of France to open a buying house in France, where the whole Pakistani textile sector can open a combined buying house with the full support of French government.

The offer has been made by the French Commercial Counselor in Pakistan Mr. Dominique Simon, in a meeting with Faisalabad Chamber of Commerce and Industry (FCCI) and representatives of textile association. He also offered facilitation for getting visas to people going to France for business.

The French Counselor said in the meeting that the energy crisis, rise in input costs and economic slowdown are the factors affected the industry drastically. Further he mentioned that the Bangladeshi textile producers export their products to all the European markets due to supportive trade facilities.

Buying houses from European countries have set up shop in Bangladesh, which keeps Bangladesh textile industry updated regarding the changes in fashion, so Bangladesh produces textile products according to the ongoing fashions.

In this regard, the Pakistani textile producers were left with the only option of opening a combine buying house in France as due to the law and order situation in Pakistan no one wants to come to Pakistan for business and now this option is expected to lend a helping hand to whole Pakistani industry.

The Pakistani buying house in France will approach the fashion and garment companies in France, will market its products and pitch for orders. At the same time, it would update the textile industry regarding the changing fashions in France, so that the Pakistani textile industry could follow French trends and fashions.

Once the Pakistani products build trust within the French apparel and fashion industry, the French industry will start setting up bases in Pakistan, once the law and order situation changes for the better.

http://www.fibre2fashion.com/news/te...?news_id=73185

[oogabooga]

How come the French are warming up to us all a sudden?

[siamu maharaj]

They've also opened an Emirati base, so it's pretty clear.

[singaporean]

The federal government has allocated Rs.40 billion for an Export Investment Support Fund, to support the exports of the value-added textile sector.

The Pakistani government has pledged to set up the Export Investment Support Fund to boost the country's textile export earnings as part of the federal budget for 2009-10. The government plans to give an enhanced duty drawback to value-added textile exporters instead of providing support for research and development.

Additionally, there is also a summary to withdraw the 12.5 per cent cross subsidy on gas, to mainly benefit the spinning sector. Schemes to open warehouses and marketing offices abroad are also being worked on, Dr. Mirza Ikhtiar Baig, the Federal Advisor on Textiles said.

He also said that, Rs.500 million has also been earmarked as a three per cent interest rate subsidy for the textile industry and Rs. 510 million will be spent on establishing the necessary infrastructure to support export oriented textile and clothing firms.

Baig said in a statement on Monday that 67 per cent of the Export Investment Support Fund will be spent on the textile and clothing industries, with hopes of moving the sector towards consolidation and value addition.

In this budget, the Federal Excise Duty (FED) on the import and supply of viscose staple fiber has been withdrawn.

Additionally, the textiles industry will be given priority in the allocation of gas and electricity, as the industry is the first priority of the government, Baig said. The government also plans to establish large export houses, and launch a National Trade Corridors Improvement Program, the advisor added.

The budget also contains allocations for different textile and garments city projects throughout the country. The Infrastructure Development of Pakistan Textile City Project was recently launched in Karachi and soon Faisalabad Garments City Project would also be launched, Baig said.

Rs.246 million has been earmarked for Textile City Karachi, Rs.207 million for the Faisalabad Garment City Project. Additionally, Rs.25 million will be spent on the Lahore Garment City Project, as well as Rs.17 million for upgrading Textile Institutes and Rs.15 million for the Export Development Plan.

Additionally, Baig said there was a proposal for the disbursement of a three per cent to four per cent mark-up on investment against plant and machinery in textile sector. This will be similar to the Indian Technology Upgradation Fund (TUGF) scheme and will be announced in the upcoming textile policy.


http://yarnsandfibers.com/news/index...p_type=General

[speedyturtle]

These are just ways to make us fools textiles industry was doing good on its own, if u earning than you are gonna invest in ur business as well the point is that if you cant provide electricity the mills are gonna close not everyone has got the money to buy big generators specially for looms as they take alot of electricity and even if u buy them u cant run those generators for 12 hours out of 24. On top of that you got sales tax, you got quota than very high interest rates not having skilled labour ALL these things count and all these politcians are bothered about is filling there own pockets.
PAkistan was on top in asia at one time now china, india, bangladesh even srilanka is doing better than pakistan and that makes me wanna cry.

SPEEDY
enjoy

[RANA AAA]

Iranian market awaits Pakistani textile products



Associated Press of Pakistan

KARACHI: Commercial Counsellor, Embassy of Pakistan in Iran, M. Saeed Khan Jadoon during his visit to FPCCI said volume of trade between Iran and Pakistan has shown significant increase of 86% at 400 million dollars, whereas the potential available is 600 million dollars.

The main hurdle of trade between two countries is Banking sanction and LC matter , and this issue has been discussed with the SBP Governor, he said in a meeting with President, Federation of Pakistan Chambers of Commerce and Industry Sultan Ahmed Chawla and a group of other senior businessmen, here at Federation House, said FPCCI statement on Monday.

In the meeting, the matters related to promotion of trade and investment between the two brotherly countries were discussed. President FPCCI Sultan Ahmed Chawla said Pakistan and Islamic Republic of Iran share common borders, religious, cultural and social values which make theses two countries very special friends.

He mentioned that textile and bed linen products are very potential in Kish island of Iran which is a Taxfree Zone. Pakistani textile giants should open an outlet there which is a tourist spot. He was of the view that Pakistan should allow flying rights to Iran Air to carry out operations beyond Pakistan and similarly to PIA which will definitely increase commercial traffic.

The Government should allow freight subsidy on Plastic items which are in great demand in Iranian Markets.

[KB]

anyone knows our total textile exports? or preferably a break-down of our export for financial year 2008-2009?

[Naresh]

Originally Posted by KB

anyone knows our total textile exports? or preferably a break-down of our export for financial year 2008-2009?

KB Ji :

Aap Ki Seva Mein :

STATE BANK OF PAKISTAN

Statistics and Data Warehouse Department

EXPORT RECEIPTS BY COMMODITY

Cheers

[Ahmad Rashid Ahmad]

Though foreign buyers consider Pakistan being the cheapest source of coarse cotton textiles, they have withheld orders on concerns textile manufacturers will not be able to make deliveries on time because of energy and power shortages.

The News has found that the demand for coarse cotton yarn, denim cloth and knitwear is on the rise in the global market. Exporters point out that the buyers always appreciated quality of these Pakistani products which before 9/11 fetched higher prices than competing economies. However, after the threat of terrorism emerged, the buyers shifted bulk of the orders to other countries without totally abandoning quality exporters of Pakistan.

All Pakistan Textile Mills Association’s former chairman Akber Sheikh said despite acute power and gas shortages the industry never failed to meet export schedule even if it had to produce power and use energy at a higher cost.

However, he added, the foreign buyers took very seriously protests by the textile sector against suspension of gas and electricity supply. As a result, they withheld orders. “Fall in orders has forced around 50 per cent of the clothing industry to close,” knitwear exporter MI Khurram said. He said the buyers also exerted immense pressure on surviving mills to reduce prices which they did by improving their efficiency to the maximum level.

“Now quality and rates are not an issue for the exporters who are operating on very thin margins.” He said possibilities of increasing exports were bright as margins would improve once the facilitations announced in the textile policy were made available.

Though the Ministry of Textiles had issued necessary circular for availing of benefits of the textile policy, the finance ministry had not issued supporting SROs which would allow the central bank to provide three per cent rebate on export of clothing or reduce interest rate for import of machinery, he said. “Even the SRO to release withheld research and development grants has not been issued.”

Another clothing exporter, Adil Butt, said the textile sector was at recovery stage. “Export orders have increased, mills are rapidly utilising idle capacities and entrepreneurs are trying to buy closed units.”

However, he added, banks were too slow in addressing their issues with the sponsors of sick units making it impossible for prospective buyers to take over these units at reasonable rates. He said Pakistan Electric Power Company (PEPCO) was also creating problems for the value added clothing sector as it considered only the spinners as textile units.

He said clothing units at Multan Road were facing loadshedding for eight hours in a day, though PEPCO had announced power outages for only three to five hours for the textile sector. “The opportunity available now will be lost if the government fails to improve its institutions like power supply and gas distribution companies.”

Clothing exporter Sheikh Zafar Mehmood, who had just negotiated an export order with a multinational brand, said the deal was based on facilitation provided by the government in the textile policy.

However, he regretted the policy was a non-starter from the beginning. He said the textile ministry had linked provision of incentives to registration of textile exporting units with the ministry. Though online registration was allowed, the site of the ministry was clogged and registration was not possible. He said “foreign buyers have now admitted Pakistan is the cheapest source of knitwear products in the world. Their concern, however, is timely delivery which they doubt given the power and energy shortage and deteriorating law and order situation.”

[Ahmad Rashid Ahmad]

The textile industry of Pakistan is more vulnerable to global recession than its competitors as its share in domestic market is limited to 20 per cent although the local consumption of fibre is equivalent to over 40 per cent of its production capacity.

The textile experts say that the industry’s share in the domestic market has been eroded by free flow of used or worn clothing and rampant increase in smuggling of ladies fabric along with readymade garments being brought in the country through personal baggage.

The All Pakistan Textile Mills Association (Punjab) former chairman Akber Shaikh said that other major textile exporting nations like India and China are better able to withstand the pressure of reduced exports due to global recession or any other factor because they have larger shares in their home markets.

He said the only difference between these two countries and Pakistan is that they have better controls on their borders that effectively check smuggling of foreign fabric or other textiles. These countries discourage import of worn clothing.

The customs in China and India strictly monitor global rates and do not clear under invoiced goods.

Akbar Shaikh said there is a huge demand for Pak made ladies cotton fabric in India but its smuggling is checked and its import is subjected to high duty based on minimum duty payable per kg that makes the fabric costly.

On the other hand he added smuggled Indian and Chinese fabric is freely available in all cloth markets of Pakistan.

A study by The News revealed that Pakistan imported 263.371 million kg of used (or worn) clothing worth Rs7.685 billion in 2008-09. This means that the per capita used clothing consumption in Pakistan is 1.62 kg.

The Indians on the other hand imported only 43.640, which translate into per capita consumption of worn clothing in India to only 0.03 kg.

Another point worth noting is that the imports of worn clothing are rapidly rising in Pakistan, which stood at 174.592 million kg in 2007-08 and the per capita worn cloth consumption in the country was 1.07 kg. The quantum of smuggling can not be evaluated.

However a visit to any market in Pakistan would reveal that most of the blended ladies fabrics in Pakistan are smuggled in to the country. Ladies usually prefer blended fabrics.

The children garments also find their way in large quantity through personal baggage. Ladies constitute 50 per cent of our population.

Assuming that the smuggled quantity is equivalent to that of worn clothing then smuggled ladies fabrics also account for 1.62 per capita consumption of fibre.

Children garments and other textile imports account for another 0.5 kg per capita consumption of fibre.

It was also found that the local textile industry produced 3,040,910 ton of fibre in 2008-09 out of which 20 per cent or 615,314 ton was consumed in the domestic market and the rest was exported. This is equivalent 615.314 million kg or per capita consumption of 3.62 kg.

The cumulative use of foreign processed fibre in Pakistan is 3.74 kg per capita (1.62 kg worn clothing 1.62 kg ladies blended smuggled fabric and 0.5 kg children wear). This is a little higher than the per capita consumption of the locally processed fabric in the country.

This means that the consumption of local fabric could be doubled if the influx of foreign processed fibers is effectively checked

[pspguy123]

^

That's so retarded. Pakistanis only have 20% of their own domestic market. The sooner we raise the potential in our domestic market, the sooner our companies can expand outside of the country.

[Ahmad Rashid Ahmad]

Originally Posted by pspguy123

^

That's so retarded. Pakistanis only have 20% of their own domestic market. The sooner we raise the potential in our domestic market, the sooner our companies can expand outside of the country.

It becames even more disguisting by the fact that it is our main industry.......

[Ahmad Rashid Ahmad]

The Federal Bureau of Statistics (FBS) said on Tuesday that textile exports shared over 50 percent of the total exports during the first eleven months of the current fiscal year.

Textile exports stood at $9.324 billion and contributed 53 percent in the total exports of $17.6 billion during July-May 2009/10.

The other major contributors are manufacturing group, which shared by 19.21 percent with $3.381 billion followed by food group 17 percent and $2.992 billion, petroleum and coal 5.06 percent or $890.629 million and miscellaneous exports 5.74 percent or $1.01 billion, the FBS said.

The textile exports managed to grow by 6.77 percent despite difficult economic conditions due to war on terror and electricity crisis owing to increase in exports of raw materials such as cotton and cotton yarn. The export of both raw materials fetched $1.486 billion foreign exchange for the country.

In terms of volume, the export of cotton cloth leads in textile earnings with $1.66 billion. It is followed by knitwear $1.587 billion, bed wear $1.573 billion, and readymade garments $1.158 billion.

The exports of manufacturing group posted double-digit growth to $3.381 billion during July-May 2009/10 from $3.272 billion in the same period of last fiscal year. The largest contributor in the exports of this group is pharmaceutical and chemicals, which resulted in inflows of $679.953 million during the period.

The major contributors in manufacturing group exports are, sports goods, $267.195 million; leather tanned, $293.663 million; leather manufactured, $404.742 million; surgical and medical instruments, $206.155 million; engineering goods, $209.673 million; jewellery, $520.123 million; cement, $437.351m.

Around $2 billion rice sale to international market helped the food exports to grow by 7.92 percent in the first eleven months of the current fiscal. The food group exports stood at $2.99 billion during July-May 2009/10 as against $2.77 over the corresponding period of last fiscal year.

Quantity export of rice increased by 50 percent on the back of improved domestic production and higher import demand from countries Kenya, Iran and Saudi Arabia. In addition to rice, fruits and halal meat and meat preparation remained the major contributor to increase in food exports during the period.

The increase in fruits exports has been led by improved harvest, better marketing strategies and improved market access.

The exports of petroleum and coal rose by 16.65 percent to $890.627 million from the previous figures of $763.483 million. An amount of $520 million received by selling petroleum products in the international market whereas $369.99 million received from Naptha sale, the FBS said.

[Ahmad Rashid Ahmad]

Textile exports crossed the 10 billion dollar mark in the financial year 2009-10 on the back of high growth of cotton yarn. Export of textile products totaled $10.244 billion in outgoing financial year, as compared to $9.572 billon in the previous year, registering a seven percent growth. According to Federal Bureau of Statistics (FBS) on Tuesday, during the month of June, the export of textile goods grew 9.81 percent to $921 million as against $839 million of last year. In the year under review, export of cotton yarn surged to $1.417 billion, registering 27.13 percent growth, compared to $1.114 billion in the previous year. Export of raw cotton increased 124 percent to $195 million; against $87 million in the previous year and export of yarn other than cotton yarn also increased 100 percent during the year. Export of cotton cloth and cotton carded or combed decreased seven percent and 24 percent respectively during the said year. In value-added sector, the performance of different textile items remained mixed, as export of some goods fell and others recorded some increase. Knitwear export registered a marginal increase of 1.16 percent to $1.761 billion, as compared to $1.740 billion. Bedwear exports fell slightly by 0.64 percent to $1.723 billion compared to $1.735 billion in the previous year. Export of towels grew by 5.17 percent to $676 million, compared to $642 million, whereas readymade garments grew by 4.33 percent to $1.283 billion, compared to $1.230 billion a year ago.

[khalid-don]

Comparative advantage: American buyers still prefer Pakistani apparel
By Kazim Alam
Published: October 24, 2011


The Pakistani rupee has been depreciating, making the country a choice outsourcing destination.
KARACHI: Despite the chronic energy crisis, the gas shortages, the bombings, the terrorism and the violence, Pakistani apparel is one of the lowest cost options for US-based buyers, cheaper even than Bangladesh, India and China, according to American buyers of textiles.

The cost differentials can be as high as 25%, substantial in an industry that generally operates on low margins for exporters. For example, a hooded sweatshirt, which is made at the rate of $12 a piece in China, is manufactured in Pakistan for $9 to $10. Similarly, a pair of jeans, whose manufacturing cost is $10 in China, costs $8 to $8.50 in Pakistan.

Edward Hertzman, director of business development at Synergies Worldwide, a global sourcing company, explains why that is. “The cost of labour in Pakistan is less than China, India and Vietnam,” said Hertzman, whose company placed $75 million worth of orders with Pakistani textile companies last year.

“As opposed to Bangladesh, Pakistan has its own supply of cotton and fabric, and has more small and medium-size factories. So it is able to accommodate smaller volumes and shorter lead times, which suites the American market,” Hertzman said.

Synergies Worldwide represents about 35 European and American brands and deals with over 80 factories in Pakistan besides operations in India, China and Bangladesh.

Top American brands currently outsourcing their apparel manufacturing to Pakistan include American Eagle, Abercrombie & Fitch, Hollister, Nike, Quicksilver, Kohl’s, Sears, Wal-Mart, Gap, Old Navy and Macy’s.

“The perception is that Pakistan is a difficult and dangerous place to work. That’s not true. I travel to Pakistan at least four times a year. I think Pakistan is a serious place to do serious business,” Hertzman said.

The tariff exemptions that Bangladesh receives from the European Union, under the Generalised System of Preferences (GSP), seems to actually count against Bangladeshi manufacturers among American buyers, since it means that their production capacity was used mainly by large European retailers, leaving little spare capacity for any American firms that want to buy from there.

Also, the lack of domestic cotton production capacity makes it difficult to operate a “just in time” logistics system with Bangladesh, a system that US retailers are used to.

“Americans need to understand that Bangladesh works best when running large, continuous programmes. Also, the buyer must plan for longer lead times for Bangladesh, as the fabric is imported and capacity is booked months in advance,” said Hertzman.

Meanwhile, the cost of apparel manufacturing has increased in China in the recent past. The government raised the minimum wage up to 21% in Jan 2011. With the renminbi getting stronger in the international market, Chinese products are becoming increasingly expensive for foreign buyers.

On the contrary, the Pakistani rupee has been depreciating, making the country a choice outsourcing destination.

Talking to The Express Tribune, Khurram Khalid, who works for an international buying house in Karachi, said China was gradually moving away from textiles. “Chinese are smart people. They know the real money is in hi-tech. Their economy is growing, so they’re moving towards production of specialised goods.”

Another advantage that Pakistan has over its competitors, especially Bangladesh, is good quality, home-grown cotton. Pakistan produces short-staple cotton, which is good for denim, flannels, fleece, knits, polo shirts and t-shirts.

Pakistan also produces fashion goods and niche products better than Bangladesh. “Pakistan has excellent washing, dyeing and finishing techniques, enabling it to create fashion-forward, value-added garments,” Hertzman said.

The readymade garment industry in Pakistan enjoys facilities like duty-free import of machinery and income tax exemption. The Textile Institute of Pakistan also introduced first-of-its-kind, four-year BBA (Honours) in apparel manufacturing and merchandising a few years ago to meet the demand of the apparel industry.

Published in The Express Tribune, October 24th, 2011.

http://tribune.com.pk/story/280478/c...stani-apparel/