Pakistan Textile Industry News and Discussion

[ejaz007]

Shocks to textile sector

• 0
  Shares

Daily Times

JANUARY 25, 2020

Pakistan’s continuous struggle for increase in exports is often marred by inconsistent government policies, mostly about taxes. Export-oriented sectors have faced increase in power tariff by 35 per cent, impacting industries’ competitiveness and investor confidence. Industry is demanding the withdrawal of a Power Division’s notification issued on January 13, 2020 directing the power distribution companies to include additional charges like financial cost surcharge, Neelum-Jhelum Surcharge, taxes, fixed charges, quarterly tariff adjustment and fuel price adjustment, in addition to 7.5 cents to power bills to the industries entitled for zero-rated tariff.

All Pakistan Textile Mills Association (APTMA) censured the Power Division’s notification, saying the government had taken U-turns on its commitment to provide electricity to export industry at a fixed rate of 7.5 cents per unit to compete in the global market with India, Bangladesh and others. There is confusion on the notification of the Power Division, as its officials say that all committed concessions are in place as only the subsidy to exports sector was allowed to the extent of ‘base tariff’ and other factors and surcharges would have to be borne by the industry.

The Power Division, led by Energy Minister Omar Ayub Khan, issued a notification on February 8, 2019 that under an Economic Coordination Committee decision, zero-rated industry would be charged 7.5 cents per unit only and all other elements such as financial cost surcharge, Neelum-Jhelum Surcharge, taxes, fixed charges, quarterly tariff adjustment and fuel price adjustment would not be charged to them but would be part of the subsidy claim to be picked up by the government. The decision was dubbed as a game-changer by the industry and stakeholders. The textile industry set a target of $26 billion exports by 2023. The recent power shock, however, shook exporter confidence.

Apart from APTMA, Pakistan Business Council has also shown its anger on the power shock. “Policy U-turns, especially with retrospective effect do not bode well for export competitiveness, import substitution, investment or employment”, the PBC said, adding all these factors were critical for Pakistan’s economy. “How are Pakistan’s exports when subjected to 13 cents/KWh expected to compete with those from India and Bangladesh at 7-9 cents/KWh and China between 7.5-10 cents/KWh”. The government needs to evaluate its budgetary constraints before granting concessions to industries. Now, both sides should sit together to talk out the issue. If there is misunderstanding on the notification that can be handled, but if the notification swells mills’ power bills that issue should be addressed. *

https://dailytimes.com.pk/545820/shocks-to-textile-sector/

 

[Samlee]

You Can Kiss The Economy Goodbye With The Kind Of Parasites We Have In Our Bureaucracy

 

[Wikki019]

this gov is turning out to be a joke, Pakistan will be doomed if we are unable to increase our exports to 35+ billion usd

 

[touela]

Shocks to textile sector

• 0
  Shares

Daily Times

JANUARY 25, 2020

Pakistan’s continuous struggle for increase in exports is often marred by inconsistent government policies, mostly about taxes. Export-oriented sectors have faced increase in power tariff by 35 per cent, impacting industries’ competitiveness and investor confidence. Industry is demanding the withdrawal of a Power Division’s notification issued on January 13, 2020 directing the power distribution companies to include additional charges like financial cost surcharge, Neelum-Jhelum Surcharge, taxes, fixed charges, quarterly tariff adjustment and fuel price adjustment, in addition to 7.5 cents to power bills to the industries entitled for zero-rated tariff.

All Pakistan Textile Mills Association (APTMA) censured the Power Division’s notification, saying the government had taken U-turns on its commitment to provide electricity to export industry at a fixed rate of 7.5 cents per unit to compete in the global market with India, Bangladesh and others. There is confusion on the notification of the Power Division, as its officials say that all committed concessions are in place as only the subsidy to exports sector was allowed to the extent of ‘base tariff’ and other factors and surcharges would have to be borne by the industry.

The Power Division, led by Energy Minister Omar Ayub Khan, issued a notification on February 8, 2019 that under an Economic Coordination Committee decision, zero-rated industry would be charged 7.5 cents per unit only and all other elements such as financial cost surcharge, Neelum-Jhelum Surcharge, taxes, fixed charges, quarterly tariff adjustment and fuel price adjustment would not be charged to them but would be part of the subsidy claim to be picked up by the government. The decision was dubbed as a game-changer by the industry and stakeholders. The textile industry set a target of $26 billion exports by 2023. The recent power shock, however, shook exporter confidence.

Apart from APTMA, Pakistan Business Council has also shown its anger on the power shock. “Policy U-turns, especially with retrospective effect do not bode well for export competitiveness, import substitution, investment or employment”, the PBC said, adding all these factors were critical for Pakistan’s economy. “How are Pakistan’s exports when subjected to 13 cents/KWh expected to compete with those from India and Bangladesh at 7-9 cents/KWh and China between 7.5-10 cents/KWh”. The government needs to evaluate its budgetary constraints before granting concessions to industries. Now, both sides should sit together to talk out the issue. If there is misunderstanding on the notification that can be handled, but if the notification swells mills’ power bills that issue should be addressed. *

https://dailytimes.com.pk/545820/shocks-to-textile-sector/

Everybody are to some extent culprits. Government officials don’t implement the necessary policies to help/improve doing business in Pakistan and many major businesses tycoons shifts profits out of country to avoid taxation. It’s an evil spiral.

 

[maithil]

High energy, water costs may push Pakistan’s apparel industry towards crisis

 

[ziaulislam]

this gov is turning out to be a joke, Pakistan will be doomed if we are unable to increase our exports to 35+ billion usd

is it right to subsidize the textile industry when textile industry wants to focus on domestic market only..subsidiy will be of waste..
if textile industry doesnt want to export the focus should be on other sectors like SMEs, engineering and IT

but yes the 7.5 units should be maintained but only for textile industry that are focusing on exports, not on domestic market ..

uch subsidies havent worked in the past due to short sightedness of some industrailist as we saw in oil setcor, govt subsidized the refineiries, they promised to update their refineries, they didnt and now are asking again for subsidy ..

you are killing your industry by over protection..as over protection stops innovation and cant be done for ever

 

[ejaz007]

Export-oriented textile industry; APTMA demands cut in gas tariff by 35-40pc
KARACHI: Zahid Mazhar, Chairman, All Pakistan Textile Mills Association (APTMA) Sindh-Balochistan Region has ...

Recorder Report June 09, 2020

KARACHI: Zahid Mazhar, Chairman, All Pakistan Textile Mills Association (APTMA) Sindh-Balochistan Region has demanded Prime Minister Imran Khan and the Economic Managers of the government to reduce the indigenous gas tariff for the five export oriented sectors in line with major reduction in oil prices in the international market, to recover from the negative impact of Coronavirus (Covid-19) on the economy and exports.

Zahid Mazhar said that the wide spread of Covid-19 Pandemic has severely disrupted the global economy so large that some economists have suggested that it will be even worse than the great depression. In case of Pakistan due to slowing down of the growth momentum, the growth rate would be far below the target of 2.4 percent initially fixed for the current financial year, now expected to end up in negative growth of -1.5 percent.

To offset the devastating impact of Coronavirus on the economy, industry and international exports, the rate of natural gas for the industries, specially the export oriented industries including their gas power generation plants which may be part of the same concern or associated concerns incorporated separately, should be reduced by at least 35 to 40 percent as the cost of energy is the major component of the total cost of production.

The drastic fall in the international oil prices to around $40 from the previous level of $65 also justifies the reduction in gas prices, he said. In India the prices of gas have already been reduced drastically, he added.

He said Pakistan needs to capitalize on its best trait to grab the post Covid-19 opportunities and that opportunity is exports of textiles. Only textile can help us get out of the present crisis and bring massive foreign exchange and provide employment to match the targets of the Prime Minister. Pakistan's textile sector contributes 8.5 percent in GDP, employs 40 percent of the national labour force and contributes to almost 60 percent of total exports. Already in the international export arena the countries (especially competitors of Pakistan) are going out of way to grab lost markets and exploring new markets. Export oriented Countries are reducing utility (Power & Gas) rates to make their industries competitive and position themselves into the international markets, especially US and Europe.

Pakistan's textile exports are already facing the negative consequences of high energy tariffs relative to other competing countries. It is now or never situation for the textile industry to grab the market share, which cannot be achieved without the government intervention by reducing the cost of production.

Therefore the cost of natural gas which composes of a big chunk in the cost of production should be reduced with immediate effect in the best interest of the economy and the export oriented textile industry.

Copyright Business Recorder, 2020

https://www.brecorder.com/news/1002...ry-aptma-demands-cut-in-gas-tariff-by-35-40pc

 

[S.Y.A]

Imran Khan and pti are proving to be bigger and bigger idiots with each passing day.

also, the industrialists are to be blamed as well, the idiots refuse to modernize their factories, thus increasing power efficiency, production quantity and quality, at the same time saving manpower and power costs.

but yes the 7.5 units should be maintained but only for textile industry that are focusing on exports, not on domestic market ..

that is the entire point sir:

“How are Pakistan’s exports when subjected to 13 cents/KWh expected to compete with those from India and Bangladesh at 7-9 cents/KWh and China between 7.5-10 cents/KWh”.