Half a Million Jobs Lost as Textile Crisis Hits Pakistan's Economy

[I FLY HIGH]

This brings up an interesting question regarding CPEC: Given what is written above, is Pakistan in a position to take full advantage of CPEC? It seems the biggest hindrance to CPEC is the Pakistan government, its corruption, its incompetence, and its apathy.

what ? There are no more power cuts and gas supply cuts in the industry , tax rate is at its lowest , govt has given due refunds to industrialists, govt is doing enough . But for textiles you have to concentrate on the business cycle too , these days there is an lack in international demand of yarn , grey fabric , sheeting etc. These commodities pakistan do the most . There is a decline in sale value per metre /kg of these products , this decline in sale value has put spinning companies in break even or less than break even bar , some of the companies are sustaining it , some could not in the past two years. But the textiles business is in cycle always it is never straight . now the conditions are shaping well for the last 3 months and next year looks good , some rates in yarn has improved and grey fabric is doing well . (although not like boom but better than before ). Bottom wear of Pakistan is doing well already . So the things look promising in current year and hopefully Pakistan will regain its loss in value of exports which it suffered in last 2 years .

 

[Arsalan]

Sir can you tell me if any incentives are given by Pakistan govt for replacement of capital goods for textile sector...or any plans to do so? This is a big problem I have heard from my sources in the Pakistan textile industry....they are spending a lot keeping old machines in operation and also there are costs from breakdowns happening regularly etc.

Can't some of the loans from CPEC be used for this (i.e import of newer capital goods from China since they are having overcapacity issues anyway)?

The is really something that needs some serious work on. Currently gov. is giving some incentives to exporters on import of machinery in terms of low duty and tax but frankly, a lot more will be required. Duty free imports, loans etc will help improve the situation further. Plus they need to make the RnD and rebate systems more effective.

 

[Arsalan]

Pakistani investors should go a step forward, like Technical Textiles. I know they have capital for that, but they are not willing to get their feet wet. Upper you go in technology, lesser the headache and higher the profit. That's what I have learned.
and
Here comes duty of govt to attract the people for something they are not willing for, by showing positive sides of new fields.
I remember how German govt vigorously helped in 2008 crisis, when industry, specially auto industry was scrambling.

True!
However the problem is that the investors will invest only when they are assured there is profit to be made. A businessman will prefer sticking to the simple 76x68 fabric quality as long as he knows he is saving 5 Rs a meter. Such is the mind set of our business community. There are very few people who have the guts to go for new things. Again, with gov. support i think the industry will slowly start moving in this direction.

 

[wiseone2]

My comments were neither meant to bash anyone nor is it off topic. This has been a common complaint by Pakistani businessmen for a very longtime, and not just in the textile industry. The article posted in this thread quotes Pakistanis, not Indians. The laments are the same: no electricity and no support from the government. Which is interesting given that the current government is considered pro-business!

Contrast Pakistan’s economy with those of China and India, which gets all sorts of government support, and you can see why there are doubts that Pakistan can fully take advantage of CPEC. No doubt CPEC is a net benefit for Pakistan, but the question is how much?

automation in textile industry leads to loss of jobs. it is a long term trend. it is not unique to pakistan. the question has to be asked is the textile industry worth saving given the low barriers to entry ?

textile is low margin business unless you pursue some kind of horizontal/vertical integration. I am sure there are smart pakistanis who can pull it off. what is the chance they are in charge of pakistani textile company ?

 

[tarrar]

Crises hitting Pakistans industry is all thanks to incompetent & corrupt politicians as they are only interested in running their family business. Both ppp & pml/n have damaged Pakistan badly & Pakistan is suffering because of them.

 

[wiseone2]

True!
However the problem is that the investors will invest only when they are assured there is profit to be made. A businessman will prefer sticking to the simple 76x68 fabric quality as long as he knows he is saving 5 Rs a meter. Such is the mind set of our business community. There are very few people who have the guts to go for new things.

one sure way to force the change in the mind set of business community is market forces

 

[Arsalan]

automation in textile industry leads to loss of jobs. it is a long term trend. it is not unique to Pakistan. the question has to be asked is the textile industry worth saving given the low barriers to entry ?

textile is low margin business unless you pursue some kind of horizontal/vertical integration. I am sure there are smart Pakistanis who can pull it off. what is the chance they are in charge of Pakistani textile company ?

That is not entirely true. The recent crisis was mainly because of the export market getting slow and no real demand from EU or America coming. The volume of there imports was down and that affected us. IN this situation the smaller, commercial exporters and units with relatively lower over heads survived better than the integrated vertical setups. So just like every other thing having its pros and cons, this one is no different. When you have a spinning, weaving, dyeing/processing and stitching unit all under you, a decrease in sales will mean you have to bail out all these four setups. That may break the company. Commercial exporters with just stitching or someone like us with weaving and stitching in-house were just making lesser profits but managed to keep themselves afloat!

Crises hitting Pakistans industry is all thanks to incompetent & corrupt politicians as they are only interested in running their family business. Both ppp & pml/n have damaged Pakistan badly & Pakistan is suffering because of them.

While I am no big fab of the government either, I won’t blame EVERYTHING on them. It takes two to tango and the gov. need to work TOGETHER with the business community to help improve things.

one sure way to force the change in the mind set of business community is market forces

Totally true. That is the reason that since a cheaper 76x68 quality have much bigger market than the T450 quality we see our business men getting enough business in 76x68 that they do not try to move to the better value products.

 

[Rafael]

That is not entirely true. The recent crisis was mainly because of the export market getting slow and no real demand from EU or America coming. The volume of there imports was down and that affected us. IN this situation the smaller, commercial exporters and units with relatively lower over heads survived better than the integrated vertical setups. So just like every other thing having its pros and cons, this one is no different. When you have a spinning, weaving, dyeing/processing and stitching unit all under you, a decrease in sales will mean you have to bail out all these four setups. That may break the company. Commercial exporters with just stitching or someone like us with weaving and stitching in-house were just making lesser profits but managed to keep themselves afloat!


While I am no big fab of the government either, I won’t blame EVERYTHING on them. It takes two to tango and the gov. need to work TOGETHER with the business community to help improve things.


Totally true. That is the reason that since a cheaper 76x68 quality have much bigger market than the T450 quality we see our business men getting enough business in 76x68 that they do not try to move to the better value products.

I just came to this thread to see you teaching folks here about textiles and 76x68

 

[Nilgiri]

I just came to this thread to see you teaching folks here about textiles and 76x68

His posts are quite silky and a pleasure to read

 

[Arsalan]

I just came to this thread to see you teaching folks here about textiles and 76x68

hahahahah!!
No need to tell YOU anything about it!

And note how i have just side stepped any thing about quilting and fillings!!
Never even touched that subject

 

[Rafael]

hahahahah!!
No need to tell YOU anything about it?
And note how i have just side stepped any thing about quilting and fillings!!
Never even touched that subject

Hahah right. Maybe we both can start online textiles course on PDF.

Need to boost our exports man.

 

[!eon]

True!
However the problem is that the investors will invest only when they are assured there is profit to be made. A businessman will prefer sticking to the simple 76x68 fabric quality as long as he knows he is saving 5 Rs a meter. Such is the mind set of our business community. There are very few people who have the guts to go for new things. Again, with gov. support i think the industry will slowly start moving in this direction.

Investor's mind set is almost similar everywhere. Active governments turn that setup and in inactive states it remains same ancient.
I had been importing Pakistani Denim products, and I know how much headache it is when dealing with variations due to manual productions, specially scraping and washing affects.
By going just one level up, for example to Kevlar, not only the negotiations with customer becomes easy but also shoots the profit margin many times up.

 

[SarthakGanguly]

If Indian investment is allowed, it will help the local industry a lot. We have done some good things in this sector.

 

[wiseone2]

That is not entirely true. The recent crisis was mainly because of the export market getting slow and no real demand from EU or America coming. The volume of there imports was down and that affected us. IN this situation the smaller, commercial exporters and units with relatively lower over heads survived better than the integrated vertical setups. So just like every other thing having its pros and cons, this one is no different. When you have a spinning, weaving, dyeing/processing and stitching unit all under you, a decrease in sales will mean you have to bail out all these four setups. That may break the company. Commercial exporters with just stitching or someone like us with weaving and stitching in-house were just making lesser profits but managed to keep themselves afloat!

In a downturn where the volume is down the low cost producers will survive (everything else equal)
automation helps in that kind of environment

 

[raj76]

hahahahah!!
No need to tell YOU anything about it!

And note how i have just side stepped any thing about quilting and fillings!!
Never even touched that subject

you ever had chance to visit ludhiana (alot of pakistani business man comes) we have huge garment industry