KAISER SHAFI ULLAH of
Ghurba Textiles is a distinguished name among the manufacturers and
exporters of hosiery products from Pakistan. His contribution in making
the textile quota distribution policy more transparent is enormous. His
dedication to protect the interest of small exporters has hurt his own
business interest, some times. He hails from Hyderabad and family
business is construction, other brothers are still involved in this
business. He started his professional career from construction industry
but then gradually got involved in hosiery manufacture and export
business. He is still involved in construction business. He was also
Chairman of Pakistan Hosiery Manufacturers Association. At present he is
Chairman of Pakistan Export Development Forum.
do you review the growth of hosiery industry in Pakistan?
KAISER SHAFI ULLAH:
There has been enormous growth of hosiery industry in Pakistan over the
last two decade. However, the country has not been able to attain the
level of exports it should have got. In my view the slow growth of this
industry can be attributed to the prevailing working environment. Many
people, even the policy planners, believe that exports are due to large
business houses. Whereas the fact is that medium and small manufacturers
are the backbone of this industry. While large exporters produce only
15% of the total quantity of hosiery products exported, the remaining
85% is being produced by small manufacturers. The small manufacturers
mostly work on CMT or job order basis.
Why small manufacturers are forced to work on CMT basis?
main reason for this dilemma has been the textile quota allocation
system being followed in the country. Since bulk of the shipments are
made in the name large exporters they get the allocations. These
exporters have also become the 'quota barons', attained the largest say
in the formation of textile quota policy and quota management. They also
submit the highest bids at the time of quota auction. Since the quota
acquired in auction cannot be transferred to another party, they usually
sell part of the quota got of performance basis. In some of the
categories the premium on quota is double or triple the value of
product. Therefore, it is almost impossible for a new entrant to export
items belonging to 'fast moving' categories.
Are there other reasons also for small manufacturers remaining small?
sole reason for small remaining small is the financial system of this
country. Financial institutions are ready to dish out millions to those
who have billions but never ready to lend the money to those who need it
the most. Though, lately many financial institutions have been
established with the specific mandate to lend to small and medium
enterprises the lack of expertise has also made their lending also
collateral-based. The other reason is that these specialized
institutions lend such meager amounts that do not suffice the needs.
Do you believe that Export Promotion Bureau help the small exporters?
Export Promotion Bureau (EPB) has two important responsibilities 1)
arranging participation of exporters in international fairs and 2)
arranging delegations to different countries. However, in both the cases
preference is given to large exporters, who are already making millions
of dollars exports. I believe that the EPB must include the names of
small exporters in the list of exhibitors and delegation members.
Though, this should been done by the trade associations, but the fact is
that associations have also become the platform for self-projection.
Aren't the small exporters also responsible for the prevailing
KAISER: It may
be true that at times the small exporters are helpless before the
associations and EPB. However, unless they start asserting themselves
they will remain small. The unfortunate part of the story is that the
representatives of small exporters once attain a 'nuisance' value are
obliged by the associations and soon become part of the system. Since
they also have the stake they also start following a famous old saying
'I scratch your back you scratch my back'.
Do you believe that local manufacturers have got ready to face the
challenge once textile quota regime is completely phased out?
KAISER: It is
being said that Pakistani manufacturers are making substantial
investment to improve productivity and attain greater value addition.
However, I believe not much has been done as yet. First, we woke up very
late and our competitors are far ahead of us. Second, a lot of
investment is being made in second-hand machinery. The manufacturers
installing old and obsolete machinery will never be able to compete with
those who have installed state-of-the-art machinery. If we are serious
in retaining our market share, once the quota regime is completely
phased out, we must invest only in the latest technology. The GoP must
also ensure availability of fund to all and sundry.