INTERVIEW WITH SHEHZAD SALIM, FORMER CHAIRMAN PRGMEA SOUTH ZONE

KHALIL AHMED
(feedback@pgeconomist.com)
May 30 - June 5, 20
11

PAGE: CAN YOU PLEASE TELL US SOMETHING ABOUT YOURSELF AND ABOUT PAKISTAN READYMADE GARMENTS MANUFACTURERS & EXPORTERS ASSOCIATION (PRGMEA)?

SHEHZAD SALIM: I joined Karachi Grammar School and then for higher education proceeded to the U.S.A. where I got degree in Economics & Business. After my return to Pakistan, I joined Citibank in Karachi and later joined the textile industry. My experience in the textile industry spans over two decades. I have been involved in the entire value chain, right from spinning to garment making. I worked with Master Textile Mills Limited as marketing director. There my primary responsibilities were not just marketing, but strategic planning, quota management, production/planning, finance etc. As evident by my position, I have travelled extensively and developed business all over the globe, bringing companies to Pakistan that had never worked here before. Recently, I have embarked on a new project and set up a buying house, and am currently sourcing multiple products for multiple companies located in Europe, USA, Far East etc. Furthermore, I am also associated with PRGMEA for well over a decade now. I was the Chairman of PRGMEA South Zone and dealt with all the issues related to the garment industry. Currently, I am the member of the central & zonal managing committees of PRGMEA.

PAGE: WHAT KIND OF IMPACT LOAD SHEDDING HAS LEFT ON THE TEXTILE SECTOR'S PERFORMANCE?

SHEHZAD SALIM: Load shedding has had a major adverse affect on the production of our textile sector. Majority of the textile mills are working on 50 per cent capacity at present, especially in the Punjab region. The main reason is not only lack of electricity supply from various discos in the country but also the non-availability of gas for power generation for both the independent power producers and the mills. This situation has further led to substituting of gas to furnace oil, further enhancing the cost of production. Thus, the lead times to execute orders have increased substantially and mills have to face cancellation of orders as well. Due to the electricity shortage, cost of production has also gone up. Textile sector has no options to resolve the situation. The SME sector within the textile industry suffers the most as it cannot afford oil or gas based power generators. Cost of furnace oil is exorbitant. When small and mid sized companies shut down their garment factories, looms, etc. thousands of workers loses jobs. This in turn causes more lawlessness and leads to further increase in crime and terrorism.

PAGE: WHAT KIND OF IMPACT LOAD SHEDDING HAS LEFT ON THE ECONOMY?

SHEHZAD SALIM: The affect of load shedding is visible on every aspect of the economy. A miniscule GDP growth rate of 2.5 to three per cent, unemployment unofficially touching 25 per cent, and inflation at over 15 per cent were some of the implications. There are no foreseeable improvements in any of these areas for the coming 1-2 years. There will be no local and foreign investments that we need desperately.

PAGE: HOW WOULD YOU DESCRIBE THE AVAILABILITY OF ELECTRICITY FOR THE INDUSTRIAL SECTOR?

SHEHZAD SALIM: Availability of electricity is extremely poor. Load shedding is increasing every week. Currently, power is shut down for more than 12 hours in some of the industrial areas: load shedding is variable from province to province. On average, it would be between 6-8 hours. Industrial sector should be provided the electricity without any disruption, as it is proportionally related to the development of people as well as the country. If the productions are run on 100 per cent capacity, we will generate more revenue and thus more taxes and eventually spend more on development programs.

PAGE: WHAT KINDS OF EFFORTS ARE REQUIRED TO TACKLE THE ENERGY CRISIS?

SHEHZAD SALIM: First and foremost, we need to explore hydropower resources. Small and large size dams need to be built on war footing. Our vast resources of coal need to be utilized to generate electricity and finally alternate energy sources such as wind and solar need to be harnessed to generate electricity. Side by side, we need to improve our distribution networks, reduce line losses and theft of electricity. This requires huge investments, which are need of the hour.

PAGE: HOW WOULD YOU COMPARE NEIGHBORING COUNTRIES WITH PAKISTAN IN TERMS OF AVAILABILITY OF ELECTRICITY AND TAX RATES?

SHEHZAD SALIM: Currently, our regional competitors are also not in good shapes. India and China are seeing rising cost of productions. Bangladesh is facing acute gas and overall energy shortages. Petroleum prices are also high in the region than that of ours.