OVERVIEW OF THE PAKISTAN TEXTILE INDUSTRY
DR. S.M. ALAM AND M.A. KHAN
June 25 - July 01, 2007
The textile industry has been the bulwark of Pakistan's economy. The textile and garments are the largest industry and prestigious foreign exchange earner of the country. Its performance is directly dependent on cotton lint availability and its prices in the local and international markets. The share of textile industry in the country's economy along with its contribution to exports, in terms of GDP ,employment, foreign exchange earnings, investment and value added and revenue generation altogether placed the textile industry as the single largest manufacturing sector in the economic growth of the country. This textile hub contributes more than 68% of the total export earnings, accounts for 46% of the total manufacturing and provides employment to 40% of the industrial employment. Pakistan's exports are heavily dependent on the textile sector and this is clearly evident from the fact that 68% of our exports are textile related products.
Pakistan is fast emerging as a hub for textile and garments trade in Asian region endowed with one of the largest textile and garment producing industries in the world. In agriculture sector , the availability of cotton contribute a lifeline of its economy , making textile and garment the largest industrial sector in the country. Pakistan is he fourth largest producer of cotton in the world. Cotton, the basic raw material for textile industry has played a vantage role in the growth of the industry. Pakistan is the fourth largest cotton producer after China, India and USA. From among seven members of SAARC only two-Pakistan and India are cotton producers and are enjoying an edge of local raw material over the countries of the region. However, it is equally encouraging that cotton yield per acre in Pakistan is more than India and with little more efforts on the part of the growers and the government control over the supply of spurious fertilizer and pesticides could mean a lot for much higher production per acre So this is one area where Pakistan will be having an advantage of local raw material. Attempts are made to increase the total land acreage, yield per acre apart from the technical support, research emphasis, public encentives etc.
The country's textile and garments industry has spent over US$ 4 billion on BMR and expansions during the last two years equipping the manufacturing capacities with state of the art machinery and technology. The very encouraging policies of the government and further strengthened by the enthusiastic support by leading international buyers from conventional and unconventional markets, have positioned Pakistan to allow additional international market access for the top producers and exporters from within and elsewhere that are in search of new avenues to fully strengthen their existence in the world.
Pakistan's exports performed strongly in April 07 , a growth of 7% in textile products due to the phenomenal growth in yarn sector. Pakistan exported textile products worth $8.027 billion during this period compared to $7.051 billion in the previous year. The government has fixed a target of $11.5 billion for textile sector exports during 2006-07. However, the government is trying to achieve a target for textile exports 0f US$14.5 billion by 2010. The top buyers of Pakistan textile goods are: USA, EU, Gulf region, Hong Kong, Japan, Republic of Korea, UK, Saudi Arabia, Italy, Turkey, Germany, Norway, France, Canada, Australia, Sweden etc. The textile industry in Pakistan has tremendous potential to grow, provided its comparative advantages are maintained. Pakistan has gradually emerged as world's largest supplies of yarn, with China as one of the major buyers. The domestic consumption of yarn in weaving, knitting and towels industry is rapidly growing as is evident from 14 per cent per annum increase in export of value-added textile for last five years. The major textile exports items are, cotton cloth, cotton yarn, bed wear, ready made garments, knitwear, raw cotton etc.
Pakistan has become on the largest consumers of US variety Pima cotton for manufacturing fine count value-added yarns to make sophisticated fabrics for use in made ups for high end of the market. The processing industry in the textile value chain holds an important position as far as value addition is concerned. Garments and made-ups comprising the downstream industry rely heavily on the processing sector for the provision of value added fabrics and materials. Unfortunately, the processing segment also in most susceptible area that can be affected by global environment regulations regime. More than 650 units are in operation majority of which operate at small and medium sized scale. These units carry out processes include: bleaching of fabrics, dyeing and finishing of fabric and printing and finishing of fabric.
In the export of textile products, China and India are very close rivals and they are competing with Pakistan's goods in all sections. However, the finished qualities of Pakistani products are superior to these countries. Most probably the working environment is the worst for textile processing units. The industrial consumers have to pay not only high electricity tariff but also have to face disruptions and breakdown in supply and frequent voltage fluctuations. Since textile industry particularly spinning and weaving units is deploying the latest technology it can neither afford interruptions nor surges in voltage. Besides electricity they face the problem of water supply and its quality. A large number of processing units have to buy water from tanker supplies which is not only expensive but its quality is inconsistent up to the standard. Such water quality adversely affects the quality of bleaching and dying. On top of this, the interruption in electricity supply creates havocs. In addition the rising domestic costs(oil. Gas and power failure, inflation, minimum wage rte, cotton price ) and resultant product price has disturbed the normal functioning of the textile industry. It is suggested that efforts should be made to save the existing industrial sites from becoming in bad conditions. The environmental effects of pollution of wastewater products is very serious. A wide range of chemicals are used by the textile industry for dyeing and printing operations. and these include bleaching agents vat dyes, azo dyes, sulphur dye, color pigment, which are manufactured by using formaldehydes, hydrochloric acid, chromium salts, ammonia, caustic soda, and many other toxic chemicals. Such chemicals are creating environmental pollution.
The textile industry in Pakistan has tremendous potential to grow provided its comparative advantages are maintained. There is a widespread recognition that Pakistan's textile industry has made its mark up particularly those textile industry operators who have been able to develop their niche markets and continue to compete in international markets. There is a lot of scope for textile industry to further grow as it improves its productivity and competitiveness. The share textile sector in GDP is estimated to increase from 10% to 18.95 % by year 2015.