SPORTS GOODS FETCHING HEALTHY EARNINGS FOR PAKISTAN
There is a need for Pakistani investors to come forward and open sports goods and sports wear retail outlets in international markets
By M. TARIQ SHAMIM DURRANI
July 04 - 10, 2005
Sports goods have played a pivotal role in the economical development of Pakistan as the country exports quality products in conformity with international standards.
Sialkot, Pakistan's export capital, represents an economy and a class of entrepreneurs quite different from the ones nurtured by the state apparatus over the years. Sialkot epitomizes the industrial bourgeoisie of Pakistan, a class that has created "pockets of efficiency" in the economy. There are over 3,000 small and medium sized sports goods industrial units, and some 50 well established industries functioning in and around Sialkot. It is a labour-intensive industry providing direct and indirect job opportunities to about 60,000 workers, while sub-contracting of work on piece rate is a common practice, resulting in more jobs for people.
In sports, soccer ball industry in Sialkot is famous for quality craftsmanship, however, some time back foreign media alleged that the industry was involving child labour for stitching the balls. Prompt action was taken by Sialkot Chamber of Commerce & Industry (SCCI) to tackle the situation and protect the industry.
The SCCI through the corporate sector signed an agreement at Atlanta, Georgia, USA with ILO-IPEC and UNICEF in February 1997 to purge the soccer ball industry from the stigma of child labour, through progressive implementation of Sialkot project with emphasis on providing social protection to children and their families.
The children were provided proper schooling under the programme. The programme met with unprecedented success due to unstinted participation of manufacturers who were invited to join the programme on voluntary basis.
The success achieved in this programme is evident from positive remarks appearing, every now and then, in international media, and even the former US President Bill Clinton in his address to the ILO Convention at Geneva in June 1999, specifically quoted the Sialkot project as a model of success, advising others to replicate it.
In 2002, sports goods exports from Pakistan totaled Rs 11,039 million, indicating a 16.91 percent increase in foreign exchange earnings as compared to the previous year.
Presently, Pakistan is competing with India, Japan, Taiwan and South Korea in international markets. India has an advantage of cheap labour and raw material, whereas countries with semi-automatic mechanized units can produce low-cost and inexpensive sports gear such as metal rackets and cricket bats etc.
Since the entry of Japan, Taiwan and Korea, the industry is tilting towards mechanization and the use of modern equipment, which has resulted in tougher competition for manufacturers and exporters of sports goods in Sialkot.
It speaks volumes for the quality of sports goods of Sialkot that it continues to compete in the global market without a fully mechanized industry, relying mostly on old and traditional production techniques.
Pakistan needs to adopt new technologies and sophisticated materials for items such as tennis rackets, hockey sticks and footballs etc, so that it can achieve the standards required in EU markets and also effectively meet the competition from the other Asian countries. New technology is essential for achieving economies of scale and once economies of scale is achieved we may come up with competitive prices in the market.
SPORTS GOODS EXPORTS IN RS. MILLION
SPORTS GOODS EXPORT IN MILLION US $
Source: The Federation of Pakistan Chambers of Commerce & Industry
SPORTS GOODS EXPORTS IN MILLION RS
Majority of our exporters are presently weak in the marketing management abilities and the financial/human resources required for aggressive market share enhancement and product and geographical diversifications. Due to the need of up front investment of funds, SME exporters are shy to invest. It is essential that professional and financial help be provided by the government in partnership with the exporters, for aggressive international promotions, distribution and gaining access to new customers and markets.
Nike, Reebok and various international brands are marketing Pakistan-made soccer balls under their brand names. There is a need for Pakistani investors to come forward and open sports goods and sports wear retail outlets in international markets. Branded retail chains will not merely boost the foreign exchange in international market but will also develop the brand image of Pakistani sports goods.
A business cannot excel without effective supply chain management. To develop the on-shore capacity to produce the right quality at internationally competitive prices, based on customer needs, the supply chain needs to be closely examined by our entrepreneurs, in close collaboration with the government; bottlenecks need to be removed and infrastructure strengthened. This would include the use of state-of-the-art technology and manufacturing process development.
Culture of 'TQM' (Total Quality Improvement), 'KAIZEN' and 'CI' (Continuous Improvement) needs to be inculcated and embedded in support of quality, social and environmental opportunities. This should aim to achieve world class levels progressively and meet international standards and specifications as a minimum. Appropriate regulatory framework, quality and social management processes such as ISO/SA certifications and a transparent efficient judicial process also needed to be in support.
Export Promotion Bureau is doing well in promoting locally manufactured goods in international market. Local sports goods manufacturers and exporters should participate in international trade fairs and exhibitions to present their quality goods. In recent years the pace of trade fairs and exhibitions has been increased to great extent that shows government inclination towards boosting exports.
Recent removal of duties on the import of sports goods raw material would strengthen the industry and will result in competitive prices to offer in the international market.
The author holds a Masters degree in Public Administration with dual specialization in Marketing and Human Resource Management. He is currently working as Executive Marketing (Brand Management) in Cambridge Garment Industries and has an internship experience in Indus Motor Co., PSO and NCR.