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Company Profile

Science & Technology

Special Report

Mar 12 - 25, 2001

Abid Farooq was recently elected Chairman of All Pakistan Textile Mills Association (APTMA). He has been very active member of APTMA since 1994 and belongs to the new breed of young and dynamic textile entrepreneurs of Pakistan. Before being elected Chairman APTMA Abid Farooq was Chairman APTMA, Punjab Zone and Vice Chairman APTMA for two consecutive years. Abid Farooq is the Chief Executive of Ali Akber Spinning Mills located at Lahore. The Company is listed at Karachi Stock Exchange. He is an MBA from Claremont Graduate University, USA. He is 44 years old and has four children.

PAGE: What is the role of textile industry in economic revival of the country?

ABID FAROOQ: Textile industry is the largest organized industry and earns more than 60 per cent of total export proceeds for Pakistan. No efforts should be made to undermine its role. Rather efforts should be made to enhance its contribution as it has the largest infrastructure. Textile industry is playing its due role and has invested over US$ 500 million to expand and revamp its operations. The seriousness of sponsors is evident as the companies have largely used their own resources retained earnings. The fresh investment has been made to achieve greater value-addition and to improve unit price realization. While the industry is making efforts to make the best possible use of each gram of cotton produced in the country, it also seeks help of the GoP. It does not demand protection but certainly deserves level playing field.

PAGE: There was a sort of confrontation among various sub-sectors, what efforts are being made to resolve the situation?

ABID: It may be true that various sub-sectors were facing a head-on collision situation in the past. However, the situation was more an outcome of efforts to attain political mileage. No one should forget that each sub-group has a due role to play and Pakistan cannot optimize the benefit of silver fibre unless each group gets its due share. Farmers need a decent price of cotton, spinners want cotton at competitive price in required quantity and made-ups manufacturers can only compete if quality of fabrics is of international standard. APTMA's demand is 'price of cotton must commensurate with quality'. The industry also demands its first right on locally produced cotton. Why should we allow our competitors to get the benefit whenever the country has a bumper cotton crop?

PAGE: How does the textile industry plan to implement Textile Vision 2005?

ABID: A new Focus Group has been formed to suggest measures to implement Textile Vision 2005. It is using the available database. The industry is striving hard to get ready to meet the challenges to be faced after quota regime is completely phased out on December 31, 2004. It is evident from an investment of over US$ 500 million by the textile industry. This time, bulk of this investment has been made from internal resources and there was less reliance on bank borrowing.

PAGE: What is the outlook of textile industry?

ABID: The year ending on September 30, 2000 was very good. Most of the listed companies are declaring substantially higher dividend. Even those units which were perennial loss making entities were able to curtail their accumulated losses. The investment which has been made lately should have been made much earlier and should continue as a normal feature. The sponsors of most of these companies have forward looking vision and have been investing even during the worst period.

PAGE: Despite such a mega investment, it is feared that the industry faces confusion?

ABID: I will be honest and not minced my words. Textile industry has committed certain mistakes in the past and the result is, even if it asks for legitimate covers, its demand is not received by the policy planners in true perspective. For example when we say that industry suffers due to lack of long-term policy, high electricity and interest charges, our woes are not given due attention. Similarly, when we demand for buffer stock of cotton it is not understood properly. The data shows that often the surplus is marginal and it is the right of local industry to get the benefit. The other problem is that due to a marginal gap in demand and supply of cotton, its prices remain highly volatile. Our demand is that when spinners are asked to pay international prices of cotton, the electricity tariff and interest should also be comparable with international rates. If the electricity tariff and interest rates cannot be lowered the local industry must be compensated in some other ways. Our only demand is availability of cotton at affordable prices. Unless we are able to rationalize yarn cost, our made-ups cannot compete in the global markets.