TEXTILE VISION 2005-10

Foresees $16 billion exports in next five years

From SHAMIM AHMED RIZVI,
 Islamabad
Feb 21 - 27, 2005

Pakistan's Textile Vision 2005-2010 envisages an investment of about Rs300 billion with a raise in export of textile products to above $16 billion per year (from present about $7 billion) during the next five years.

The All Pakistan Textile Mills Association (APTMA) experts claimed that they have made realistic projections on the basis of an in-depth study of the textile sector which is of course the mainstay of our economy.

The assessment has been carried out on the basis of (a) historic expansion in the textile industry in Pakistan, (b) relocation of textile industry from high cost to low cost countries, i.e. China, Pakistan and India, (c) increased market access in EU, USA and Canada, (d) better revealed competitive advantages of Pakistan, (e) historic growth in domestic consumption of textile products i.e. yarn and fabrics, and (f) since textile industry is being relocated from developed countries, demand of basic items is increasing in these countries.

The textile experts are of the view that under globalization, textile industry is being relocated to cost competitive areas. Therefore, value addition in textile would take place where strong basic textiles exist. Therefore, textile industry and exports will expand in China, Pakistan and India. According to them Pakistan textile industry is relatively less sheltered (i.e. tariff protection and subsides); enjoys an edge in technology i.e. western technology; better cotton yield per hectare than India; an opportunity to attract relocation of American, Korean and European textile industry; prospects of converting US cotton in Pakistan for export of textiles under duty free access under TIFA/FTA; and view prospects of alliances with Sri Lanka and Bangladesh.

The experts estimated that cotton consumption would reach 17 million bales and consumption of man made fabric (MMF) would be around 1 million tons during the next five years. They foresee yarn distribution as:-

1. Export of yarn 11 percent
2. Ready-made garments 30 percent
3. Knitwear 22 percent
4. Bed wear sector 28 percent
5. Towel and other made ups 11 percent

GROWTH RATES FOR 5 YEARS

1. Man made fabric production 11.1 percent per annum
2. Spinning production) 6 percent per annum
3. Weaving production 11 percent per annum
4. Finishing production 11 percent per annum
5. Knitwear exports 30 percent per annum
6. Ready-made garments exports 6.85 percent per annum

FUTURE PROSPECTS (2010)

1. Fiber consumption is projected to increase to 3.9 million tonnes cotton 2.9 million tonnes, MMF 1 million.

2. Production of basic textiles will increase.

3. Value addition in basic textile products.

4. Exports of basic textile will decrease i.e. domestic consumption of these products will increase.

5. Distribution of yarn will change in favor of value-added sector, and exports of value-added textile will increase.

BASIC GROWTH

The experts said that these growth rates have been estimated on historic performance of production and exports of textiles. Certain growth rates are based on exports performance under availability of market access to value-added sector.

They expect that exports in basic textile would decrease as local consumption in these sectors is on the rise.

The experts said they were confidant that exports of bedwear, knitwear and ready-made garments would also show good potential for growth and it is expected that these sectors would gain in exports. The quantum of exports expected from each sector is: spinning $600 million; weaving $800 million; bedwear $3000 million; knitwear $3500 million; ready-made garments $2500 million; finishing $2500 million; other made ups $3500 million.

INVESTMENTS EXPECTED TO BE MADE TILL 2010

1. MMF Rs13,000 million
2. Spinning Rs154,000 million
3. Weaving Rs3,450 million
4. Finishing Rs4,250 million
5. Knitwear Rs11,640 million
6. Ready-made garments Rs13,290 million

The experts said that the present structure of textile industry is unbalanced in favor of basic textiles and 35 percent of the textile exports are in basic products. They said that "Textile Vision 2010" lays stress on value addition in basic textile products which is not difficult to achieve with the reigning upbeat mood of the textile industry.

Though the Textile Vision 2005-10 focuses on value addition and quality of the textile products which are the most significant areas and can help meet WTO challenges and hitting the targets of the textile vision, yet another area which is equally important to survive amidst the cut throat competition in the world market especially to cope with the onslaught of cheaper textile products from China and India. It is high time that our industry should take concrete steps to put the textile industry on the track of economic scale which is the open trade secrete to bring down the cost of production and thus survive in the world market.