Textile Industries of Pakistan

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Textile Industries of Pakistan

Textile Companies Post 32% Increase in Profits During H1FY21

Syeda Masooma

The profits recorded by Pakistan’s listed textile companies jumped 32 percent in the first half of the fiscal year 2020-21 compared to the same period in the last fiscal year.

This is being attributed primarily to a spike in textile exports, improvement in other income, and decline in finance cost, according to a report by Topline Securities brokerage house.

The research house filtered out companies based on the minimum market capitalization of Rs. 1 billion and included 21 firms in its sample. The listed enterprises represent 82 percent of the textile sector’s market capitalization.

On a year-over-year basis, overall revenues increased by 12 percent during the period under review. Textile exports during the first half of the fiscal year 2020-21 increased by 8 percent in dollar terms and 13 percent in rupee terms, leading to this ultimate increase in revenue.

The report stated that the backlog of orders from the second half of the fiscal year 2019-20, along with diversion of orders from comparable economies such as India and Bangladesh, due to COVID-19 lockdowns, helped in increasing exports for Pakistan.

It added that the increase in pricing and depreciation of the rupee against the US dollar, by 4.6 percent, also offset the international price hike caused by rising cotton prices in the country. “Gross margins remained largely unchanged at 16 percent, however, gross profits increased by 9 percent year-on-year.”

Local cotton prices went up over 7 percent in the six months under review to an average of Rs. 9,154 per maund (approximately 40 kgs) mainly due to a 34 percent decline in local cotton production.

Lower interest rates also led the finance cost to decline by 14 percent year-on-year in the first half of FY21.

Textile Companies Post 32% Increase in Profits During H1FY21

The profits recorded by Pakistan’s listed textile companies jumped 32 percent in the first half of the fiscal year 2020-21

propakistani.pk

 

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A guide to top five textile companies in Pakistan.


China and Pakistan are close and friendly neighbors, and Pakistan has always treated China as its most important economic partner. Rapid economic development in China and consequent inter-regional activity between both countries has caused increased demand for raw materials, exchange of parts and components between the two.

China and Pakistan also have witnessed steady growth in mutual investments in recent years. Presently, a large number of Chinese companies are working in Pakistan in textile and spinning, oil and gas, IT and telecom, power generation, engineering, automobiles, infrastructure, and mining sectors.

China has become one of the top five import sources of Pakistan. Major imports from China are machinery, chemicals, garments, and other textile products, stationery products, construction materials like tiles, sanitary wares and ceramic, etc.

Besides this, there is a high demand for Chinese goods in the Pakistani market. Their experience of growth in trade is positive due to convenient trade flows and openness measures.


All Pakistan Textile Mills Association (APTMA):

All Pakistan Textile Mills Association (APTMA) is the premier national trade association of the textile spinning, weaving, and composite mills representing the organized sector in Pakistan. APTMA emerges as the largest association of the country as it represents 396 textile mills, out of which 315 are spinning, 44 weaving, and 37 composite units.

These spinning mills have production facilities of texturing, mercerizing, and dyeing of yarns; weaving mills have a sizeable number of air-jet looms, and the composite mills have manufacturing facilities from spinning to finished textile products under one roof.

APTMA has always tried to build relations with China due to their economic growth and product reliability factors.



Measures Taken for Developing Textile Business in Pakistan With China:

Recently, a meeting was held between the head of Chinese textile companies and head of Pakistani textile companies in which Pakistan showed its their keen interest in developing business with the textile sector of China that would change the economic landscape of our country.

As a result, the head of the Chinese companies showed a keen interest in making investments in the textile sector of Pakistan. As you know, the textile sector is a large sector of Pakistan, and there are vast opportunities of investment in this sector.

Not only this, but special economic zones are being set up in various parts of the country, and Chinese investors are willing to invest in these special economic zones. It was revealed that a garment city spread over 400-acre land would be established soon, and a Chinese company will invest their money in this garment city, which will also produce job opportunities for Pakistani people.



Five Top Textile Companies to Invest in Pakistan:

Following are the top five textile mills in which China can invest:


5. Capital Spinning Mills Ltd Raiwind:

Capital Spinning Mills is one of the leading groups in the textile industry of Pakistan through their dedicated efforts, hard work, and the grace of God. The group today is broadly diversified and is involved in Textile (Weaving and Spinning), Power Generation, Footwear manufacturing/Retail, Leather manufacturing, Leather Garments, etc.

Capital Spinning Mills Ltd is a trusted and respected name in the business world, known for its financial soundness and impeccable creditworthiness.

It is also well known throughout the world for its quality standards. The group is known to never compromise on the quality of its products through the strict quality control system, implemented in projects, has resulted inconsistency in the maintenance of quality standards. Their motto is customer satisfaction, employee motivation, technology innovation, and cleanliness foundation.

The core business of Capital Spinning Mills Group has always been textiles.

China has always believed that it can play an essential role in lifting Pakistan’s economy by investing in its leading textile companies. This will also help in building an industrial co-operation and strengthening the economic partnership between the two countries.


4. Nishat Mills Ltd Lahore:

Nishat Mills Limited is the flagship company of Nishat Group. It is one of the most modern, largest, vertically integrated textile companies in Pakistan. Nishat group of companies is a premier business house of Pakistan. The group has a presence in all major sectors, including Textiles, Cement, Banking, Insurance, Power Generation, Hotel Business, Agriculture, Dairy, and Paper Products.

Today, Nishat Group is considered to be at par with multinationals operating locally in terms of its quality products and management skills.

China continuously tries to invest money on Pakistan’s economy. Recently, a textile delegation came to Pakistan for the same purpose, and Pakistan offered its cost-effective and skilled labors for the prosperity of the economy.

China wants to invest in the Nishat Mills Ltd textile industry to transform the company into a modern and dynamic yarn, cloth and processed cloth, and finished product manufacturing company that is fully equipped to play a meaningful role on a sustainable basis in the economy of Pakistan. It wants to transform the company into a new and dynamic power generating company.


3. Ideal Spinning Mills Faisalabad:

The utmost commitment to standards of quality has been the only reason Ideal Spinning Mills has grown incredibly over the last couple of years. Ideal Spinning has the most modern manufacturing technology used by a highly professional and experienced team. They use the latest technology with high-speed ring frames to produce yarn.

Ideal Group started its journey with Ideal Spinning Mills Ltd producing high-quality yarn and fabric for customers. The mill has shown remarkable growth not only in the area of sales but also in quality. It is a Public Limited Company, which is ISO 9001:2000 Certified.

The company aims to anticipate market trends and offer their customers options to expand its existing ranges and have always responded to a dynamic market place.

This is why China is collaborating with our textile industries so that success comes from a relentless focus on innovation and execution. Both China and Pakistan believe that these concepts are not only vital for our business, but also our sustainability efforts.


2. Zaib textile Group Faisalabad

Zaib Textiles Group is one of the leading textiles and garments manufacturing exporters in Pakistan. They have a complete setup from knitting, dyeing, sewing, printing, embroidery to packing.

Based on this wholly-owned and operative capability, Zaib Textile Group is driven by the effort to excel in whatever they do. They have strived to create a niche in spinning and weaving. With growing strengths in research, design, product development, manufacturing, and marketing, today, they have been able to achieve a coveted in the industry, but yet continuously aim to scale even greater heights in the years to come.

China wants to help Pakistan’s textile industries so that they can pride themselves and lift Pakistan’s economy. Moreover, China has always played a large role in contributing to the development of Pakistan’s skill improvement and technology sharing through its various training and latest knowledge sharing platforms.


1. Ravi Spinning Mills Ltd Lahore:

Ravi textile is one of the most successful spinning mills in Pakistan with a local and international clientele. It always aims at serving its customers with quality products and has pride in itself as a fabric manufacturer of high-quality fabric. It believes in ever-changing and ever-evolving fashion world.

It has worked very worked to turn around the performance of the company into sustainable growth for the benefit of its stakeholders. It has always focused on its quality to stand the expectations of its valued customers redefining excellence with craft, creativity, professionalism, and quality control.
The company strives hard for boosting exports of the country to earn more foreign exchange to rebuild its economy.

China will sooner collaborate with Ravi Spinning Mills Limited so that the group prides itself on possessing top-of-the-line vertical integrated processes of spinning, weaving, dyeing, printing, and finishing. The company aims in buying automated and manual machines that ensure quality stitching in different fabric blends for a variety of purposes.

Ravi Mills provides customers the best home textiles in terms of quality, service, and cost-effectiveness, all the while staying observant of fulfilling their responsibilities as responsible corporate citizens.




CHALLENGES PAKISTAN TEXTILE INDUSTRIES FACE:

International economists urge that the textile is the most significant manufacturing sector and has the longest production chain, with inherent potential for value addition at each stage of processing, from cotton to ginning, spinning, fabric, dyeing and finishing, made-ups and garments.

In Pakistan, the textile sector contributes approximately one-fourth of industrial value-added and offers employment to about 40 percent of the industrial labor force. Barring seasonal and cyclical fluctuations, textile products have sustained an average share of about 60 percent in nationwide exports.

No doubt, Pakistan’s textile industry considered as the backbone of the export sector is facing new issues that should be dealt with promptly. Therefore, the government should take serious initiatives to safeguard the local industry, which is the highest foreign exchange earner and the largest urban employment provider.


CONCLUSION:

The Textile industry in Pakistan is the largest manufacturing industry in Pakistan. Pakistan is the 4th largest producer of cotton with the third largest spinning capacity in Asia after China and India and contributes 5% to the global spinning capacity.

 

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Textile industry in Pakistan


Textile Sector of Pakistan is the heart and soul of this nation since Independence. It is the largest Manufacturing Industry in Pakistan. Export of $3.5 billion (6.5% of total exported cotton in world) in 2017-2018.

Pakistan is the 8th largest exporter of textile commodities in Asia. Contribution in economy is equal to approx. 8.5%of total GDP. Textile Sector employs about 45% of the total Labor force in the country. In the year 2017-18 Exports of textile sector grew by $4.4 billion.

Pakistan is also 3rd largest consumer of Cotton in the World. Total Textile mills are 464 in Pakistan out of which 5% are on the PSX .Textile has a total processing capacity of 5.2 billion square meters.

International brands working in Pakistan with local textile mills are namely; H&M, Levis, Nike, Adidas, Puma, Target etc. Textile businesses are concentrated in Karachi with a share of 38% and 18% in Faisalabad. Out of 464, 316 textile units in Punjab, 116 in Sindh.


Pakistan’s exports are under threat mainly from regional competitors because the governments of these countries support their textile industry a lot as compared to Pakistan’s government. Rs.185 million has been approved in Pakistan for the Export Development Fund for the development of the textile sectorThe textile industry provides 40% of the bank credit in Pakistan.

In the 1950s, textile manufacturing emerged as a central part of Pakistan's industrialization, shortly following independence from the British rule in the South Asia.

In 1974, the Pakistan government established the Cotton Export Corporation of Pakistan (CEC). The CEC served as a barrier to private manufacturers from participating in international trade. However, in the late 1980s, the role of the CEC diminished and by 1988-89, private manufacturers were able to buy cotton from ginners and sell in both domestic and foreign markets.

Between 1947 and 2000, the number of textile mills in Pakistan increased from 3 to 600. In the same time period, spindles increased from 177,000 to 805 million.[6]

Pakistan has a supply base for almost all man-made and natural yarns and fabrics, including cotton, rayon and others. This abundance of raw material is a big advantage for Pakistan due to its beneficial impact on cost and operational lead time.

Production

There are six primary sectors of the textile production in Pakistan:

Spinning
Weaving
Processing
Printing
Garment manufacturing
Filament yarn manufacturing

Cotton is the largest segment of textile production. Other fibers produced include synthetic fiber, filament yarn, art silk, wool, and jute.

Cotton: Cotton spinning is perhaps the most important segment in the Pakistan textile industry.

Synthetic fibers: Within synthetic fibers, nylon, polyester, acrylic, and polyolefin dominate the market. There are currently five major producers of synthetic fibers.

Filament yarn: Three types of filament yarn are produced in Pakistan. These are acetate rayon yarn, polyester filament yarn, and nylon filament yarn.

Artificial Silk: This fiber resembles silk but costs less to produce. The looms in the country are located mainly in Karachi, Faisalabad, Gujranwala, and Jalalpur Jattan.

Wool: The main products manufactured from wool include woolen yarn, acrylic yarn, fabrics, shawls, blankets, and carpets.

Jute: Jute sakes and hessian cloth are primarily used for packing agricultural products such as grain and rice.

 

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Textile Policy 2020-25: Pakistan to increase textile exports to $25.3 bn by 2025

ISLAMABAD: The draft of Pakistan Textile Policy for 2020-25 with four tier strategy and 21 recommendations is all set to be pitched any time before the ECC (Economic Coordination Committee) for approval. It will try to increase the country’s textile exports target by 2025 to $25.3 billion and $50 billion by 2030. It was $13.33 billion in 2018.

The Pakistan Textile Policy draft, available with The News, also narrates a clear roadmap to achieve the textile export targets along with vision to fully utilize the potential of home-grown cotton augmented by Manmade Fibre/Filament to boost value added exports and become a major player in the global textiles supply chain.

The draft of Textile Policy also spells out its the objectives which include

1) Restoring profitability of cotton farmers by increasing cotton yield, improving quality of cotton and decreasing cost of production for the farmers;
2) Strengthening manmade fiber/filament sector to make this chain internationally competitive and export oriented;
3) Regionally competitive energy pricing fixed for five years;
4) Prompt Sales Tax Refund System;
5) Abolition of Zero- Rating has created serious liquidity crisis for exporting sectors as the current refund system is soaking up market liquidity and is not working;
6) Long Term Financing Facility for the entire textile value chain;
7) Revival of impaired textile capacity and introduction of bankruptcy law.
8) Establishment of Textile clusters and Export Processing Zones with plug and play facilities.


It says that the global textile trade that stands at $837 billion had an average growth rate of 0.1% over the last decade. When it comes to the global market for textile sector exports, it is dominated by China, which accounts for over 32pc of textile sector exports, valued at $266 billion. Presently, Pakistan’s share is 1.6pc in the world textile trade, which will be increased to 3 percent by 2025. The world textile export that stands at $837 billion will reach $843.35.

The textile export growth comparison of Pakistan and regional peer countries shows that our regional competitors have surpassed Pakistan manifold. Pakistan was once a leading player in textile trade but over the last decade, our textile sector growth has remained dismal owing to several policy limitations and lack of enabling environment necessary for industries to flourish.

Two decades back, Pakistan’s textile exports were ahead of its regional peers like Bangladesh, Vietnam and Cambodia. In 2003, when Pakistan’s textile exports were $8.3 billion, Vietnam’s textile exports were $3.87 billion, Bangladesh’s were at $5.5 billion. Now Vietnam is $36.68 billion and Bangladesh is at $40.96 billion.

The textile policy draft argues saying that the essence is that if these countries were able to achieve record growths in this short time period, the goal of reaching $50 billion of textile exports in next 10 years for Pakistan is attainable, subject to strict implementation of Long-term Textile Policy.

Mentioning about the roadmap to export growth, it mentions that the ultimate goal of export-led growth is poverty reduction and enhanced welfare of Pakistan’s citizens. Rapidly growing exports and millions of new jobs created, along with skill upgrading, will increase productivity and wages, which over the long term is the only sustainable way to improve living standards. Furthermore, an ambitious strategy has been formulated to move from low value added semi-processed textile exports to high value-added garments and fashion articles.

A growth rate target has been set starting from 10pc in the first year of FY20 and gradually adding up to 13pc in fifth year would achieve almost $25 billion exports in the first phase of five years and for the second phase of six years 2025-30, growth rate of 15pc to 16pc on compounding basis be taken to achieve the target of $50 billion exports.

The graphs and tables mentioned in the Textile Policy show that growth in textile exports in FY20 will be at $14.66 billion, in FY21 $16.13 billion, in FY 22 $17.90 billion, in FY23 $20.05 billion, in FY24 $22.46 billion and FY25 the textile exports will be at $25.38 billion. And summarily in the next five years, from 2025 onward to 2030, the textile exports will be at $50.15 billion.

It also highlighted the investment required to achieve the export growth target, saying that Pakistan’s investment-to-Gross Domestic Product (GDP) ratio has been hovering around 15pc while countries like China, India and South Korea have maintained the ratio above 30pc to put their respective economies on a sustainable path. And to improve job creation, productivity and exports, investment-to-GDP ratio, the Pakistan Textile Policy draft says, should be raised to at around 20pc.

To achieve the targeted exports, business friendly policies should be ensured for the industry to grow and further achieve the increased targets. "Our industry cannot achieve any ambitious target within a short period of time since there are various complicated issues, including development of infrastructure which hamper growth," it says.

The draft also comes up with 21 recommendations to achieve the textile export of $25.3 billion by 2025 and $50 billion by 2030. It asks for the continuation of the provision of RLNG at $6.5 per MMBTU and electricity at 7.5 cents per unit, which is at par with energy cost of exporters of regional competitors such as Bangladesh, Vietnam and India for growth in exports.

The provision of energy at the said cost would ensure Pakistan’s products in international market at competitive rates. It advocates for the regionally competitive pricing for the whole textile chain with removal of implementation hurdles.

On the front of better cotton availability, it also urges the government to ensure acquisition of high-yielding seed technology from international sources with restructuring of R&D on modern lines.

It also recommends the removal of non-tariff barrier and duties stressing facilitation of land routes. And to avoid the contaminated cotton, it also suggests to the government to place ban on use of Polyethylene film cotton picking bags. "Bags made of cotton should be provided to cotton pickers and specialized targeted outreach programs should be designed to educate women cotton pickers."

To encourage the value added sector, it also asks for favorable rebate rates. The Textile Policy draft also recommends reduction of corporate tax rate for exporters with upper cap to be fixed at 25pc and subsequently reduced to 15pc; it also asks for reduction in turnover tax to 1pc. It also advocates for reduction in sales tax rate, simplification of refunds system and asks for a specially-designated FBR cell to deal with complaints.

It recommends no sales tax on machinery imports and demanded that 90pc claim should be paid on “A” classification of companies' past performance on submission of sales tax return and 80pc of “B”, 50pc on “C” and nil on “D”.

 

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The art of printing blocks

By Afreen Seher


Block prints are a timeless trend and favour the ethos of what we call slow and sustainable fashion. A block printed tunic you buy one year is unlikely to go out of fashion the next year, or the next.

Block printing in the subcontinent originally has its roots in the Indus Valley civilisation, where the famous Sindhi ajrak was also handcrafted and dyed. While the essence of this technique is over 4000 years old, with time the process has evolved and has been brought into commercial production.

The dyes, variety of fabrics, the patterns and the designs have all progressed according to current fashion trends, but the elements of wooden block carvings, which are delicately and carefully hand-stamped by local artisans, more or less remain in practice even today.

Block prints are a timeless trend and favour the ethos of what we call slow and sustainable fashion. A block printed tunic you buy one year is unlikely to go out of fashion the next year, or the next. Moreover, handicrafts like block prints fall well in line with responsible fashion; communities of artisans in rural areas do benefit from the business that comes in and that’s just the core of its strength.

When it comes to fashion and style, handmade block prints are a wardrobe staple, especially in summer. As the mercury rises and organic cottons and lawns or even lightweight silks become essentials, we look past prints and indulge in brands that are heralding this ancient craft.

Koel Fabrics

Spearheaded by Noorjehan Bilgrami, Koel is considered pivotal in the preservation of Pakistani traditional craftsmanship. Bilgrami’s atelier is over four decades old and is a vital channel for skilled artisans to continue their traditional profession of dyeing, weaving, block printing and thread spinning by hand.
Koel quintessentially has a soft, radiant yet earthy signature; the brand plays within a unique colour palette and their dyes are extracted from plants, minerals, and other natural sources. From a wide range of cotton fabrics to formal wear in chiffons and silk, Koel’s choice in block-printed fabrics is symbolic of nature with an overall simple and classically rustic style.

This year Koel brings out scintillating block prints on natural dyed handloom fabrics, including choices ranging from chundari, ajrak, casual wear to formal wear. Options are available exclusively for women and men both; it’s possible to select from the brand’s ready to wear line as well as loose fabric. Koel block prints also extend to household linen, including table cloths, towels, dullai (quilts) bathmats, loungewear and bathrobes.

Blocked Textiles

Blocked by Afsheen Numair is a success story that began with the textile graduate’s love for craft and continues with her sense of responsibility towards the community she works with.

Maintaining an almost decade-long collaboration with rural and semi-rural skilled artisans, Blocked engages in a significant amount of recycling fabric. Every last scrap of fabric that gets leftover is repurposed to create fresh, new designs by using intricate patchwork and hand appliqué techniques, a small yet noteworthy contribution to make fashion sustainable.

Numair has trained skilled village women in the Sanghar District of Interior Sindh, with the goal to teach them how to utilize their special knowledge of embroidery and rare handmade traditional crafts by infusing contemporary design aesthetics. All this makes Blocked appeal to women of all age groups.

This summer season, keep a special eye out for their Pink Lotus collection, an elegant choice for the hot summer months. A kurta featuring block printed polka dots lining a lotus motif on pale salmon pink lawn certainly does make an easy day wear option to dress up or down, according to your needs. The White Kinari Gala is a cotton shirt that has been rendered a signature Blocked Textiles look, where the front is hand printed with the Mughal floral motif in hints of silver and gold hand-made gota kinari. It makes this shirt a good option for understated and elegant summer festive wear
.
Wardha Saleem

As someone very rooted to her traditions, heritage, culture and craft, Wardha Saleem began her career with fabric block printing and now designs casual and formal wear in block prints under an exclusive brand, Jhirki, which means sparrow in Sindhi.

Saleem has mastered the art of mixing myriad colours and delicately stitched embroideries with diverse silhouettes. The brand particularly focuses on youngsters so their pieces are often radiant and replete with fluorescent overtones and a relatively bright and electric colour palette categorized as a sub-brand within her extensive designer clothing label.

“I wanted a line that benefits the artisans, crafts-persons and karigars of Sindh. The concept behind Jhirki is sort of a giving back to the community initiative for us. To keep up with the latest fashion trends we have added a new age feel and modern aesthetics to this ancient craft. We tend to experiment a lot with motifs and colours and add quintessential Wardha Saleem quirks while staying true to the traditional essence of the process intact,” said Saleem when explaining the ethos behind Jhirki.

While Jhirki’s colour palette varies from season to season, this summer the hues are mostly centered around bright shades like yellows and magenta, which are then juxtaposed with earthy tones to counterbalance the brighter shades.

Saleem’s design house, which also designs bridalwear during wedding seasons and formals along with myriad seasonal collections, curated a separate brand for casual and semi-formal block prints because Saleem wanted to have an on-going year-round product which offered casual wear for her clients to buy block prints at any given time of the year. Jhirki, which has now been around for over three years, offers comfortable, breezy, casualwear which is also borderline fancy in nature.

What adds to the elegance of the collection is the selection of fabrics, for instance khaddi cotton net and tasser cotton silk, which has an alluring sheen to it. The motifs that set the brand apart are unconventional, such as whirling dervishes, cyprus trees, and animals like horses and elephants along with birds.

Saleem tends to juxtapose traditional block printing techniques contemporary styles, which cater to different individuals and lets them play around with classics.

Sonya Battla

While Sonya Battla is a brand name synonymous with high end luxury wear, one branch of her design house - created under the umbrella of her label - just as elegantly weaves fabric with storytelling. These collections derive and depend on craft, specifically the craft of block printing, and pay tribute to traditional floral patterns. Merged with hand-embroidered borders, her handmade block prints are made with natural batik bleed in both cotton and silk fabric and are a favourite every summer.

This year’s cotton block print collection has eight Chaukhandi prints inspired from the exotic Chaukhandi tombs nestled on the outskirts of Karachi; pieces like ‘saffron symmetry’ and ‘ocean wave’ reflect upon the designer’s passion for art and style. Her silk block prints are inspired from light and music and include pieces like anthem, chorus, symphony, melody, shine, lustre, radiance, and luminosity. Inspired by nature and traditional handicrafts and with almost two decades of experience in the fashion industry under her belt, Battla has continued to keep her silhouettes contemporary and cutting edge.

The Silk Sherezad collection 2021 consists of kaftans and tunics hand block printed by artisans who are masters of the ancient trade. While describing the collection, Battla said “Sherezad is a mythical queen spotted walking around the beaches in Kafkaesque deep hued styles. The colour palette is reflective of our signature blood base and undefined inner motifs and the colours used to bind the collection together are inspired by Zanzibar.”

Bombaywala

It wouldn’t be possible to complete a story on the art of block printing in Pakistan without a mention of Bombaywala. Set up immediately after partition by the grandfather of Shahzad Bombay Wala, under the household name, Bombaywala considers itself to be a pioneer of block printing and dyeing in Pakistan. An interesting amalgamation of bright colours, breathable summer fabrics and traditional motifs (which are often inspired from Shahzad’s visits to India, Bangkok and Malaysia) Bombaywala has a rich variety of casual block prints, formal wear in silk and chiffon, ethnic sarees, partywear, informal shirts and a separate linen collection that you can choose from round the year.

These are just five standout brands associated strongly with block printing, but of course it is a craft that is adapted by almost every design house in Pakistan, every now and then. It’s a craft that is quintessential to the core identity of the country’s fashion identity. It’s survived for centuries and it’s just as important that it be kept alive in the future too.

– Afreen is a creative writer and a digital media professional with special interests in film, TV and pop culture. She can be reached at writing.likhaai@gmail.com

 

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Pakistan’s exports of textile and clothing posted a 22.94 per cent growth in the outgoing financial year compared to the same period a year ago, data released by the Pakistan Bureau of Statistics showed on Monday.

In absolute terms, the total exports of textile and clothing were $15.4 billion in 2020-21 against $12.526bn of the previous year.

The growth in exports of value-added sectors contributed to an increase in overall exports from the sectors. One of the reasons for growth in these sectors is because of low-base of last year when export-oriented industries remained closed due to the Covid-19 lockdown and cancellation of orders from international buyers.

The breakdown shows exports of readymade garments went up by 18.83pc to $3.032bn in FY21 against $2.552bn over the corresponding months of previous year. The exports of knitwear increased by 36.57pc to $3.816bn against $2.794bn over the corresponding months of last year. Exports of bedwear went up by 28.87pc to $2.771bn this year against $2.150bn of the last year.

Growth attributed to last year’s low base caused by the pandemic

A growth of 31.81pc was seen in export of towels to $937.536m in FY21 against $711.265m of the last year.

The export of leather garments was up by 14.02pc and leather gloves by 22.26pc. The exports of raw leather declined by over 12.04pc.

The cotton cloth export posted a growth of 4.98pc in FY21 to $1.921bn, while the export of cotton yarn went up by 3.26pc to $1.016bn on a year on year basis. The export of raw cotton declined by 95.27pc this year over the last year.

It indicates that these raw materials were consumed maximum in the value-added sector as the government has also allowed duty-free import of these products.

The exports of cotton carded were up by 3.17pc and yarn other than cotton yarn by 29.62pc.

The exports of tents, canvas and tarpaulin went up by 12.10pc, art, silk and synthetic textile by 17.68pc and made up articles, excluding towels and bed wear, by 28.08pc.

In the budget 2021-22, several measures, including reduction in duty on raw materials to promote exports of pharmaceutical, plastic, chemicals, engineering, and value-added textile products, had been proposed.

Between July 1 last year and June 30 this year, the overall exports reached $25.304bn as against $21.393bn over the corresponding months of last year, indicating a growth of 18.28pc.

The import of textile machinery posted a growth of 35.35pc to $592.076m on a year on year basis. This indicates that the industry has started importing textile machinery as part of modernisation or expansion in the sector.

The industry imported 857,373 tonnes of raw cotton in outgoing year against 536,707 tonnes last year, showing an increase of 59.75pc, to bridge the shortfall in the domestic sector.

Similarly, the import of synthetic fibre grew by 52.69pc as industry imported 447,351 tonnes this year as against 292,972 tonnes of previous year.

The import of synthetic and artificial silk yarn stood at 392,092 tonnes this year as against 248,834 tonnes last year, showing an increase of 57.57pc. The import of worn clothing recorded a growth of 89.64pc to 732,623 tonnes this year as against 386,320 tonnes of previous year.

Published in Dawn, July 20th, 2021

 

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Textile exports: higher value addition and volumes

Shahid Sattar | Saad Umar
21 Jul 2021

Textile industry has witnessed an unprecedented growth as depicted by an increase of 22% in exports in FY21 as compared to FY20 and 15% when compared to FY19. The resulting hike in exports was the direct result of enabling environment provided by the current government.

Contrary to a “rudimentary” analysis in an article published by BR on July 16, 2021 (https://www.brecorder. com/news/40107598), where higher world cotton prices has been stated as cause of higher earnings. It is important to highlight that FY20 was the year of Covid where prices plummeted due to black swan event. Thus, we must compare prices with previous year i.e., FY19 where A-index prices decreased by 4.24 percent from 86.07 in FY19 to 82.42 in FY21. Given the fact that orders and prices are booked 6-8 months in advance, the earnings are certainly not the result of increased prices.

Since, the increased exports have not resulted from higher cotton prices, it is logical to assume that reduced yarn and cloth exports have translated into manufacturing of value-added products. As already stated in the article that yarn consumption increased 38% to produce value-added products, and we already established that export earnings are not due to higher prices and are based on a volumetric increase in exports.

=========================================================================================
Table 1: Value Added Textile Exports
=========================================================================================
In Million Dollars
-----------------------------------------------------------------------------------------
Year Value of Local Value of Value of Total 25% Value of Ratio
Production Imported Cotton Exports Domestic Production
Cotton
-----------------------------------------------------------------------------------------
FY12 7157.88 490.35 7648.23 13360 3340 16700.00 2.18
FY13 4502.09 881.13 5383.22 13060 3265 16325.00 3.03
FY14 4906.94 573.86 5480.80 13720 3430 17150.00 3.13
FY15 5182.42 343.81 5526.24 13450 3363 16812.50 3.04
FY16 2992.05 750.36 3742.41 12450 3113 15562.50 4.16
FY17 3190.54 805.13 3995.67 12450 3113 15562.50 3.89
FY18 3545.24 1077.92 4623.16 13520 3380 16900.00 3.66
FY19 3392.00 767.50 4159.50 13320 3330 16650.00 4.00
FY20 2391.55 880.11 3271.67 12530 3133 15662.50 4.79
FY21 1641.37 1316.00 2957.37 15330 3833 19162.50 6.48
=========================================================================================

Demand in the domestic market maybe on the rise and there are more than 400 textile mills in the country - not all of them are exporters - to cater for rising demand. It is only viable to sell a value-added product for dollars rather than rupees. Those hard-earned dollars have significantly contributed to Pakistan’s economic growth – Balance of Payment (BoP) improved, rupee appreciated, and it also funded our imports.

Increased exports were the result of implementing Regionally Competitive Energy Tariffs (RCETs) which reduced the conversion cost while making Pakistani products competitive in international market. When majority of (regional) markets were down with Covid-19, the industry not only endured the crises but also flourished – industry was running round the clock on full capacity to meet the high demand which paid off in terms of record number of exports.

The cloth consumption has increased many folds to cater for higher demand of value-added products. Exports of knitwear and bedwear increased 40% and 30% respectively.

In terms of improvement in quality, approx. USD $ 2 billion has been invested, and another $2 billion is in the pipeline, to upgrade existing and add new machinery, so that Pakistani products meet international standards.

The industry has dealt with many crises including historic cotton decline, gas and electricity outages, billions of rupees in tax refunds, efficiency audits, labor and raw material shortages etc. Despite all, we performed the exports have increased. Textile industry – Pakistan’s single largest contributor to exports (60%), manufacturing sector employment (40%) and banking credit (40%) and almost 8.5% contribution in GDP is not only the result of window-dressing or fudging numbers (as highlighted by our friend in the aforesaid article) but as a result of sustained industry profitability.

The All Pakistan Textile Mills Associations (APTMA) as a trade organization representing the largest sector of Pakistan – Textile – encompassing more than 400 textile companies has always played a pivotal role in safeguarding the business interests of not only textile companies but of other sectors to enable their contribution in country’s economic prosperity. APTMA through its political, economic, and social capital capabilities, has always played a leadership role for business facilitation and government relation services.

Copyright Business Recorder, 2021

 

[ghazi52]

 

[ghazi52]

Textile exports: taking off?

BR Research
28 Sep 2021

Feelings of bloom and gloom are coming before the autumn season. Fears of growing imports and slipping current account deficit have gripped discourse on mainstream media. In the midst, the story of textile exports growth taking off has been largely missed. Back in 2018, BR Research had noted that textile exports can grow up to $20 billion in 3-4 years, provided government provides the right incentive structure. (For details, read: “Textile ready to take off”, published on 14th December 2018).


It appears that textile exports are finally indeed taking off. According to PBS data, textile group exports crossed $15 billion during FY21. The federal government is convinced that exports shall cross $20 billion in FY22. Textile industry lobbyists insist that for exports growth to maintain its momentum, incentive structure must ensure provision of energy on regionally competitive pricing, flexible exchange rate, and availability of long-term finance at concessionary markup.

Back in 2018, this space had mentioned that China is moving away from textile while USA is looking to reduce reliance of its textile imports from China for strategic reasons. Fortunately for Pakistan, the pandemic has not altered the strategic outlook on textile of these two economic superpowers. The change in international trade tailwinds could not have come at a better time for Pakistan. Since PTI came to power, the regime has adopted a textile-friendly approach, making the environment conducive for exports growth.

Out of $800 billion world textile trade, China’s share is one third. Recently, China is moving from low value-added exports, as labor and other factors of production are becoming expensive, and the government is moving away from subsidies to exports.

Buyers in the West are recognizing the new reality as retail margins are also squeezing. Thus, in general, buyers are looking for suppliers that can enhance supplies at current pricing. If Pakistan secures even a small fraction of China’s share, its textile exports could double. Buyers moving away from China can either move to Bangladesh, Viet Nam, India, or with any luck Pakistan.

The requisite infrastructure already exists in these nations, while exporters have access to cheap labour. Moreover, the shutdown of industrial base in Bangladesh during Covid has cemented the belief that buyers need to diversify supplier-base. Thus, Pakistan stands to gain from this paradigm shift in buyer strategy.

It appears that the textile sector is also gearing up for grab. Anecdotal evidence based on a conversation with a knitwear manufacturer reveals that the company has increased capacity by over three times in the past few years. According to the company, buyers are willing to double the size of purchase orders if the exporter can meet timely delivery. Thus, the company is convincing spinners to expand so raw material for knitwear is in abundant supply.

The textile industry demands that exchange rate must be priced at fair-value, which means that REER must hover at 100. Moreover, the industry demands energy – gas and electricity - at regionally competitive rates. While the third demand is long term concessionary financing. So far since PTI came to power, all three building blocks have been in place and appear to be paying dividends (based on textile growth). A little over half of TERF is utilized by textile players. LTFF is another avenue for exporters where textile has lion’s share. During 2MFY22, textile machinery imports have witnessed 160 percent growth over same period last year, which is indicative of the ongoing expansion within the sector.

However, export growth is not fully reflecting in the first two months of FY22. According to the industry, container shortages are delaying shipments; exporters claim that their warehouses are full of inventory ready for export. Textile exports stood at $3 billion during 2MFY22, which translates into $18 billion or 20 percent increase on annualized basis.

At the same time, textile lobbyists advocate that SBP needs to revisit its markup subsidies to exporters. There are two kind of subsidies – one is Export refinance scheme (ERF) and the other is long term financing facility (LTFF). ERF was introduced several decades ago when export dynamics were very different. Exporters can get dollar financing against shipments at subsidized rates which allows them to hedge against adverse currency movement.

According to sources, exporters that heavily rely on ERF have a tendency to retain dollars outside Pakistan till the six-month limit expires, and in turn are able to gain from currency depreciation. The legacy structure of ERF needs to be revisited and brought in line with subsidized short-term financing offered by other countries.

 

[ghazi52]

Cotton output: all eyes on October report

BR Research
27 Sep 2021

In a televised interview last week, the Special Advisor to PM on Agriculture noted that the “cotton crop is witnessing a quantum jump in productivity, never before witnessed in history”. If national average yield manages to land anywhere over 825 kg per hectares, it will break all past records. Could it be true?

Earlier, BR Research had noted that “if the momentum of cotton arrivals as reported by Pakistan Cotton Ginners Association maintains itself, the country could ‘theoretically’ report national output in the vicinity of 13 million bales”. That ‘outlandish’ figure is based on historic trend of cotton arrivals, as only 20 percent of seasonal arrivals are reported by mid-September.

Later in the same interview, SAPM explained that the 13 million bales estimate appears unlikely, considering that area under cultivation is lowest in 40 years, and the final estimate may clock in around 10 million bales. Given cotton’s poor luck in recent years, that is still an extremely impressive performance.

All earlier forecasts of import demand for raw cotton – including those by BR Research – will get thrown out of the window if the country manages to pull off even 10 million bales. Unfortunately, the SAPM did not explain why the cotton arrivals momentum witnessed so far will not continue in coming months.

One explanation making rounds in cotton circles indicates that arrivals may witness an early peak than in the past. Why? Historically, cotton arrivals in Sindh peak by end of September, while season’s highest arrival in Punjab are witnessed by October end. This has been in line with the harvest patterns in various regions, as harvest initially begins in South and then continues northwards.

But why this might change in the ongoing season? First, reports from the farm indicate that many areas witnessed early sowing of cotton by February, even in Punjab. If the crop is sown earlier, it is only logical that it would be ready for harvest earlier as well. But more significant is the sowing pattern within each province.
As PCGA report suggests, southern Sindh districts such as Badin and Mirpurkhas may have witnessed a sharp decline in cotton cultivation. Although official data from Crop Reporting Services, Sindh is unavailable, consider that to-date arrivals in Mirpurkhas already stand at 75 percent of peak historic production. If the trend holds in central Sindh as well – primarily Sanghar – crop harvest in Sindh may have very well peaked already. Cotton watchers will note that historically, district Sanghar has accounted for as much as 50 percent of Sindh’s output in recent years.

More importantly, between 3rd and 18th September, fortnightly flows reported by Sindh declined by 61 percent! In fact, cumulative arrivals in five districts of Hyderabad, Mirpurkhas, Sanghar, Nawabshah, Jamshoro and Badin fell by as much as 82 percent during this short period, with the decline in fortnightly flow partly mitigated by northern districts such as Khairpur, Ghotki, Naushero Feroze, and Sukkur which showed modest growth. If this deadly trend continues, output in Sindh may clock in at no more than 2.5 million bales, which will put a sharp dampener in the latest optimism.

Which means Punjab will bear the brunt of pulling the national total past the finish line. Unfortunately, arrivals in the northern province have also plateaued at half a million bales between 3rd and 18th September PCGA reports. While this is alarming, it may not necessarily be reflective of a trend yet. Why?

Although early sowing and early harvest may also hold true for Punjab, it is important to emphasize that cotton sowing in the province this year has remained restricted to “core cotton acres”, usually synonymous with districts in Multan, Bahawalpur, and D.G. Khan divisions. Although crop yield even in core cotton belt has been battered in recent years, all conversations with farmers indicate that the weather has been extremely friendly, with statements like “such lush fields have not been witnessed for at least past 10 years”.
Anecdotal accounts notwithstanding, yield in core cotton belt of Punjab has averaged above 700kg per hectare in good years, and may leapfrog by as much as 10-15 percent if weather remains just as friendly.

That’s a big if (and it is best that researchers steer clear of fancying themselves as weather experts). Already, farmers report that pink boll worm attacks have begun after delayed monsoon rains in many areas.

Cotton crop’s fate then remains very much uncertain. However, what is indeed clear that all past predictions have come to naught. Officialdom too has not been able to explain why its “subsidies on seed, fertilizer, and pesticides helped improve early arrivals by 160 percent”, but the application of same inputs will not help maintain the momentum going forward.

That cotton arrivals have only been preponed remains a real risk. Government should still feel free to claim victory, considering how miserable crop’s performance has been over last six seasons, and the current season is anything but. But it would do well to pay heed to the exaggerated effects of climate on this highly temperamental crop, which seemingly can take cotton farmers from rag to riches and back again overnight.

 

[ghazi52]

Addition of 100 new plants in textile industry to create 0.5 million jobs

Wed, 6 Oct 2021,

Raja Khayam

ISLAMABAD, Oct 6 (APP):All Pakistan Textile Mills Association (APTMA) has announced that the textile industry is all set to invest $5 billion by adding 100 new textile plants which will help create 500,000 jobs for the youth of the country beside increasing the existing volume of textile exports.

It was said during the annual general meeting of the association held last week by the APTMA Patron-in-Chief Gohar Ejaz who also hoped to achieve the current year’s textile export target of $21 billion. He said that the majority of the plants would be completed by February 2022.

The APTMA as a trade organization representing the largest sector of Pakistan – Textile – encompassing more than 400 textile companies has always played a pivotal role in safeguarding the business interests of not only textile companies but of other sectors to enable their contribution in country’s economic prosperity.

According to the data, the State Bank of Pakistan has provided financial support to the industry through Temporary Economic Refinance Facility (TERF) and Long Term Financing Facility (LTFF).

The TERF showed significant growth until March 2021 as reflected by increase in the requested amount from Rs. 36.1 billion by end of April 2020 to Rs. 690 billion at maturity while over the same period approved financing has reached to Rs. 435.7 billion from mere Rs. 0.5 billion.

According to official source, “For every dollar investment in the textile industry, there is $1 to $1.5 increase in the exports expected.” It stated that the textile sector exports reached a new peak, recording $1.49 billion during the first month of the current fiscal year 2021-22.

The recent expansion is attributed to unprecedented investment in expansion and new projects – a direct consequence of the government’s regionally competitive energy pricing policy. The export-oriented sectors are highly labor intensive – particularly the textile sector – and create jobs at every tier of the economy, it added.

According to the available data, the textile industry has witnessed an unprecedented growth as depicted by an increase of 22% in exports in FY21 as compared to FY20 and 15% when compared to FY19. The resulting hike in exports was the direct result of enabling environment provided by the current government.

It is pertinent to mention that FY20 was the year of Covid-19 where prices plummeted due to black swan event. Thus, we must compare prices with previous year i.e., FY19 where A-index prices decreased by 4.24 percent from 86.07 in FY19 to 82.42 in FY21. Given the fact that orders and prices are booked 6-8 months in advance, the earnings is certainly not the result of increased prices.
According to officials the demand in the domestic market maybe on the rise and there are more than 400 textile mills in the country – not all of them are exporters – to cater for rising demand. It is only viable to sell a value-added product for dollars rather than rupees. Those hard-earned dollars have significantly contributed to Pakistan’s economic growth – Balance of Payment (BoP) improved, rupee appreciated, and it also funded our imports.

Meanwhile the exports of textile commodities surged by of 28.67 percent during the first two months of the current fiscal year as compared to the corresponding period of last year and surged by 45.19 percent on year-on-year basis (YoY). The textile exports were recorded at $2933.938 million in July-August (2021-22) against the exports of $2280.119 million in July-August (2020-21), showing growth of 28.67 percent, according to latest data of Pakistan Bureau of Statistics (PBS). The textile commodities that contributed in trade growth included cotton yarn, the exports of which increased from $115.136 million last year to $193.389 million during the current year, showing growth of 67.97 percent.

Likewise, the exports of yarn cotton cloth increased by 24.74 percent, from $294.724 million to $367.624 million whereas, exports of cotton (carded of combed) increased by 100 percent to 0.770 million.
The exports of yearn (other than cotton yarn) increased by 123.73 percent, from $3.473 million to $7.770 million whereas the exports of knitwear went up by 34.12 percent, from $564.343 million to $756.883 million and bed wear by 24.50 percent, from $424.187 to $528.109 million.

The exports of towels during the period under review increased by 20.67 percent, from $133.104 million to $160.612 million, ready-made garments by 22.57 percent, from $477.216 million to $584.913 million, art, silk and synthetic textile by 34.08 percent, from $51.613 million to $69.202 million, made up articles (excluding towels and bed wear) by 21.26 percent from $109.846 million to $133.194 million whereas exports of other textile materials increased by 37.44 million, from $86.743 million to $119.222 million.

 

[ghazi52]

Spurred by latest investment, Pakistan's textile sector eyes $21bn exports in FY22

• Newly-elected APTMA chairman Nasir says there is massive room for growth

BR Web Desk
Updated 09 Oct 2021

Nasir's remark comes on the heels of Adviser to the Prime Minister on Commerce and Investment Abdul Razak Dawood's recent statement regarding new investment of $5 billion in the textile sector.

“We have been informed that an investment of approximately $5bn is in the pipeline under which 100 new textile units are expected to be established,” Dawood said on his official Twitter account.

In response, talking to a private channel on Friday, Nasir said, last year, as the economy was battering the downturn brought by the Covid-19 pandemic, the State Bank of Pakistan (SBP) launched the TERF policy in order to promote the industry, under which loans were provided at discounted rates.

“Taking benefit from this opportunity, the textile sector saw an investment of $5 billion,” said the APTMA chairman.

He said out of the $5 billion investment some $2 to 2.5 billion was invested on machinery, which is under installation, while the remaining would be injected by June next year.

Meanwhile, Dawood said the incumbent government had reversed the de-industrialisation process, and was pursuing a local manufacturing policy. “Our Make-in-Pakistan policy is beginning to show results,” the adviser said. He said that apart from enhancing export capacity, the new investment is likely to create about 500,000 jobs.

On the other hand, Nasir said Pakistan's textile exports were reviving, and there is massive room to grow.

“This is a big step for the textile industry, as investors have started investing back into the industry after a period of 10 years, which is a very positive sign and we are hopeful that our industry will close at $21 billion worth of exports by the end of this fiscal year,” said the APTMA chairman.

He said that the global textile market is worth around $800 billion, while Pakistan remains a relatively small player, signifying room for growth.

“If government policies are consistent and long-term, we could hopefully grow by 20 to 25% each year and within three years we could hit the $50-billion export level."

 

[ghazi52]

Last week, APTMA – the mothership of textile industry associations – endorsed GoPs’ export target of $21 billion for the ongoing fiscal year. Achieving the target would be no small feat, considering it would require 36 percent growth over last year. Can it happen?

In the past 35 years, textile exports have only grown once before at such a high pace. Back in FY11, industry’s exports grew from $10.2 billion to $13.8 billion, a giant leap of 35 percent. Unfortunately, the growth momentum proved fleeting, as sector exports under-performed over the following 10 years, barely struggling to average at $13 billion by FY20.

So, how did exports grow by over one-third in one year back in FY11? Can it happen again? If it does, will the growth momentum be maintained, or stagnate at the new base? One must step back in time to answer to those questions; and examine Pakistan’s textile exports in the pre-2011 era.

In November 2011, world cotton prices had doubled in less than 12 months on the back of phenomenal rise in global prices, quite like the one we see today. Although world cotton prices have so far not doubled over preceding 12 months, they very much appear to be traveling in that direction, especially with China entering international market as a strategic buyer to build its reserves (refer US ban on Xiangyang cotton).

Naturally, a phenomenal rise in global raw material prices back in FY11 quickly translated into improved earnings for textile exporters. More significantly, it wasn’t just unit prices that improved, but also quantity exported (barring few categories), as industry was able to increase volumes, possibly on the back of better margins (due to cheaper raw material buying, before world prices ran amok).

Why then did the industry not manage to maintain the growth momentum in the following years? Of the $3.4 billion incremental textile export earnings recorded between FY10 and FY11, over half were contributed by low-value add products such as raw cotton, cotton yarn, and cotton cloth exports. When world cotton prices crashed back to pre-2011 levels in the following two years, so did export earnings from low-value add goods; whose unit prices never recovered the peaks witnessed in FY11.

The trend changes for medium value add categories (such as towels and bedsheets), and high-value add categories (such as knitwear and readymade garments). Although bedwear and towels prices also tumbled in the years following FY11 (and never did prices aim for the FY11 peak again), volume exported held on. Within higher-value adds, not only did volume sustain themselves in the following decade, but unit prices also continued to march on (albeit incrementally), only suffering minor hiccups in recent years.

But this isn’t FY11. Back then, high-value adds (knitwear and readymade garments) contributed only one-third of textile export revenue; by FY21 the same has breached over half. Concurrently, contribution of low-value add (cotton yarn and cloth) has fallen from a peak of 41 percent to just 22 percent; with a value decline of $2 billion in absolute terms.

Yet, if FY11 and its fateful commodity price spiral is any guide, lower value-add items will witness the quickest, yet the most fleeting price gains today as well. Once world cotton prices start falling – as they will eventually – yarn and cloth export unit prices will prove to be the most ephemeral, falling faster than they rose.

It remains to be seen whether the rise in global commodity prices will herald a growth in low-value add exports (yarn and cloth) volume. Disturbingly, Pakistan’s total yarn output has recorded no substantial improvement, indicating that the overall raw material available to value-add producers is not growing. GoP may find itself tempted by higher international prices for yarn and cloth. Lobbies may advocate incentivizing a switch to greater share of yarn/cloth in the exports mix, so the FX starved nation may seize on an opportunity to mark quick gains in export revenue. That would be a mistake.

If yarn and cloth export volume grow – even as total yarn output remains static – the situation would translate into lower raw material availability to towel, bedwear, knitwear, and readymade garments producers. Some of these have already been advocating removal of duties on yarn and cloth import (as raw material), which will cancel out any forex gains made from incremental yarn and cloth exports. Given its current account ordeals, GoP may be desperate for quick wins through textile export growth. Rather than seeking the $21 billion target mercilessly, it would be better advised to ensure that export growth is sustainable, and comes on the back of higher value-add volume increase.

 

[ghazi52]

Body formed to fine-tune textile, apparel policy

Mushtaq Ghumman
19 Oct 2021

ISLAMABAD: Ministry of Commerce has constituted an eight-member Inter-Ministerial Committee (IMC) under the convenership of Advisor to Prime Minister on Commerce and Investment, Abdul Razak Dawood to deliberate on the Textile and Apparel Policy 2020-25.

The IMC, also comprising Minister for Energy, Hammad Azhar; Minister for Industries and Production, Khusro Bakhtiar; Secretary Finance, Secretary Commerce, Secretary Power and Secretary Petroleum and Chairman FBR, will submit viable recommendations to the Economic Coordination Committee (ECC) within two weeks for consideration.

The ECC, in its meeting held on October 11, 2021 had constituted the IMC but its notification was issued on October 15, 2021. The first meeting of the IMC is scheduled to be held on October 20, 2021 in the Ministry of Commerce.

Well informed sources told Business Recorder that Minister for Energy, and Minister for Industries and Production had opposed some of the incentives proposed in the much-delayed policy, and its consideration has been delayed again and again on one pretext or another. In pursuance of decisions of the ECC of the Cabinet deliberations were carried out with stakeholders and changes duly been incorporated by the Ministry of Commerce in its revised draft policy.

Manufacturing industry in Pakistan has been complaining about competitiveness vis-à-vis competing countries. Recently government extended considerable facilitation to textile and apparel sector; however, it has not brought much investment which suggests that long-term profitability needs to be restored to attract investment especially by SMEs.

According to the draft policy, electricity will be provided at US cents 9/kWh all-inclusive and RLNG at S6.5/MMBTU all-inclusive for the FY 202l-22 and concessionary regime will continue at regional competitive energy rates for five years after deliberation with stakeholders. Ministry of Commerce will continue DLTL/ DDT scheme for technical textiles, apparel and made-ups only; however, it will be de-linked with increment in exports. Further, diversification within products and markets will be offered as additional duty drawback.

Further, to attract investment, textiles and apparel machinery which has been customs duty free since the first textile policy period will be continued. Additionally, Ministry of Commerce will conduct an exercise with Ministry of Industries and Production on spare-parts which are not manufactured locally and their customs duty will be rendered zero.

Commerce Ministry is also of the view that tariffs have been kept high to encourage investment in upstream value-chain.

Nevertheless, high tariffs encourage domestic sales and inefficiencies are induced in pricing. To encourage exports of value-added products and product diversification, Ministry of Commerce will take following measures on priority: (i) tariff structure of entire textiles and apparel chain including man-made fibre (MMF) and cotton-based value-chains will be rationalized on priority followed by accessories and dyes and chemical; (ii) Customs duty drawback rates of textiles and apparel products will be reviewed taking into account additional customs and regulatory duties; and (iii) temporary importation schemes will be simplified in perspective of SMEs.

Ministry of Commerce will ensure common warehousing, include indirect exporters in temporary importation schemes and pursue FBR to devise new temporary importation scheme to cater to fast fashion trends.

Ministry of Commerce in consultation with SMEs and large sale industry will review federal, provincial and other or organisations-based taxes/cess and provide recommendations to the government to rationalize them to reduce the cost of manufacturing. Federal taxes will be reviewed jointly with the FBR.

The sources said the IMC will review electricity and gas tariffs proposed in the policy whereas SMEs are expected to be removed from the policy as Ministry of Industries and Production is also fine tuning its own SME Policy.

Copyright Business Recorder, 2021

 

[ghazi52]

Over 6.2 million bales of cotton reach ginneries, up 81% year-on-year: PCGA

• As per the fortnightly report, total arrival surged to 6.257 million bales as of November 1, compared to 3.452 million bales in the same period last year

Ali Ahmed Updated 03 Nov 2021

Cotton arrival in Pakistan increased by 81%, showed the latest data released by the Pakistan Cotton Ginner's Association (PCGA) on Wednesday.

As per the fortnightly report released by PCGA, total cotton arrivals in Pakistan surged to 6.257 million bales as of November 1, 2021, compared to 3.452 million bales in the same period last year, a difference of 2.804 million bales and a growth of 81.24%.

Weeks ago, the Ministry of National Food Security and Research said that the revised cotton production target of 9.3 million bales set for 2021-22 is expected to be met or even exceed.

The Cotton Crop Assessment Committee (CCAC) in September 2021 had revised downward the cotton production target by 19.5% — from 10.5 million bales set for 2021-22 to 8.46 million bales, after missing the sowing target by 13.4 percent.

However, later in October 2021, the CCAC revised upward the crop production to 9.374 million bales for the crop season 2021-22. The sowing target was set at 2.310 million hectares; however, cotton was sown on 1.871 million hectares i.e. 83.2 percent of the sowing target was achieved.


Meanwhile, as per the PCGA data, cotton arrivals reported a substantial increase in both Punjab and Sindh.

As of November 1, cotton arrival in Punjab was 2.935 million bales compared to 1.728 million bales in the same period last year, an increase of 1.206 million bales or 69.83%.

Similarly, cotton arrival in Sindh reached 3.321 million bales as compared to 1.724 million bales reported in the same period last year, an increase of 1.597 million bales or 92.67%.

At the same time, Pakistan’s textile exports touched a historic high level during July to October period of the current fiscal year.

According to details, during the period in review, textile exports reached $6 billion, an increase of 27% compared to the same period last year. Textile exports in October also reached a new record and increased by 25.5% to $1.619 billion.