Pakistani Textiles: Condition Red!
By Ibrahim Mahmood • Jul 4th, 2009 • Category: Politics, Worth A Second Look • 4 CommentsThe Trade Development Authority of Pakistan (TDAP) recently released the export figures for the month of May. These numbers paint a very grim picture for the largest industrial and employment generating sector of Pakistan and for the economy as a whole.
For the 11 months of the current fiscal year (Jul-May 2009), the textile sectors’ exports decreased by US$ 931 million, a fall of 9.6% compared to the same period last year. Almost all the sub-sectors are in red now especially the made-up sectors i.e. the bedlinen and the garments, which declined by US$ 184 million (10%) and US$ 331 million (11%) respectively. Only two sub-sectors i.e. towels and raw cotton, are showing a marginal increase. Towel exports increased by US$ 16 million (3%) while raw cotton exports surged by US$ 18 million (28%) during the 11 months of current fiscal year. It is worthwhile to mention here that increase in export of raw cotton is not a matter to rejoice because raw cotton is a commodity which sells very cheap and saps the down-stream value-added industry of valuable raw material.
Implications of the above figures can be felt far and wide in our economy. Couple of months back there was an article in the largest English daily which claimed that more than 300 textiles units have so far been closed rendering more than 700,000 people unemployed. But as there are no updated official figures on employment the figures would actually be much higher than what is claimed.
It is really alarming to know that despite this grim picture, the government has yet take single step to stem the faltering textile sector or the economy. The anticipated trade and textile policies are yet to be unveiled despite news that it is being given final touches for the past couple of months now. In any case, seeing the performance of this government in the past year, it can be claimed with certainty that these policies will not contain anything radical and so we should not be too optimistic. The ineffectiveness of this government can be gauged from the fact that the only demand put forward by the industry was a duty-free import status from USA and EU considering the tight financial conditions in Pakistan, even this demand has not been taken up properly despite Pakistan being a key ally in war against terror.
Government alone is not to be blamed for this whole scenario and the industry should be criticized here also. The industry is still running without any sense of direction or vision despite Pakistan being a cotton rich country. The industry has only managed survived on subsidies and doles handed down by the successive governments in the past. The industry has concentrated on taking only without giving anything back to Pakistan.
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Very nice Article Ibrahim, industry focuses on relying on government support but despite the most important and biggest export oriented industry, our waste and rejection levels are same which were ten years back, we lack professionals i-e, right man for the right job. Hundreds of examples CEO’s cuz director admn, CEOs nephew director HR, CEOs son Director Marketing, CEOs uncle director production most of these relatives know absolutely nothing about textiles, they join and make the mess of every thing in 2-3 years before they start knowing a little about it. Banks give loans blindly, I think there should be a condition of reviewing the profiles of senior management and even top management. Our textile sector invests heavily through banks in machinery, one of the reasons is getting kick backs on over invoiced machines, we hardly see investment in training and human resource apart from few good groups. We hardly see investment in industrial engineering which could guide mills how to improve process flows, how to control rejections, how to save costs etc and we still see Textile sector weeping. In the good old days they have earned a lot through fake sales tax refunds and biggest reason is that they dont re-invest profits for timely maintenance of pplant and machinery, employees social welfare etc. We talk about profits they even use loans for the mills to have cars like Porsche Cayyane, Range rovers, Bentley, BMW 7 series, Audi Q5 and Q7, Mercedes S class or invest the mills loan in the real estate buying and development.
Again a very timely effort on you part backed up by the figures but my blame to government is 40% and rest 60% on industry as like you I have served this sector for 15 years and have deeply studied what actually goes on there.
Mian Usman, and Ibrahim
fully agreed
being related to textile sector, i would put the balme 50%-50% on private and Government sector and an additional 20 % on the banking sector
only last week i came to know about a private textile mill owner getting a loan of 25 cr rupees, and the first thing the owner and his son did was to buy a brand new zero meter Land Crusier and a Mercedes, despite having the same brand of cars they bought last year which were also brand new zero meter
i know it takes two to clap, here everyone is a culprit
Hi Ibrahim,
US or EU cannot give duty free access without breaking WTO guidelines for pakistan textiles. Bangladesh had this quoto system as also pakistan and Nepal.Now China and India are catching up. But bangladesh is fighting back. Your textile industry must fight back as you have plenty of cotton yourself.
Your textile OWNERS must learn to survive in WTO regime like Bangladesh.
Here, we are also neglecting the frequent power outages common these days. With loadshedding for almost 12 to 14 hours daily, how can we expect our textile industry to compete at international level?