KNITWEAR EXPORTS SET FOR NOSEDIVE
INTERVIEW: CHAIRMAN SZ, PAKISTAN HOSIERY MANUFACTURERS ASSOCIATION
TARIQ AHMED SAEEDI (email@example.com)
July 28 - Aug 03, 2008
So far three hundred units of hosiery and knitwear have completely ceased business operations across Pakistan due to reasons, inter alia, inconsistent textile trade policies, increasing cost of production, discriminatory cost of inputs, lack of government supports, and dispiriting politics-fraught economy.
According to the data compiled by Pakistan Hosiery Manufacturers Association (PHMA), 137 knitwear companies based in Lahore, Faisalabad, Sialkot, Islamabad and 146 in south zone (mainly in Karachi) were closed down.
While talking about the inconsistency in textile sector related polices of all past successive governments in an interview with the PAGE, Jawaid Bilwani, Chairman SZ, PHMA said "the gravest inconsistency links to price fluctuation that undermines business client relationship", and added for instance our product price quotations to clients are not persistent and subject to a sudden change after a little while. This impulse and unexpected price change not only tarnishes image of Pakistan's textile industry in international market, but also is rendering it regionally uncompetitive.
He said regional competitors such as China, Bangladesh have also penetrated with nominal price tagged articles in our markets, leaving local textile producers behind in price competition. Governments have never been supportive and instrumental in expanding growth in textile industry. "These were actually private investors who indeed helped in fuelling robustness in performance of textile industry of Pakistan," he asserted. Due to the individual efforts of private sector, textile industry has reached to this pinnacle and earns highest foreign exchange revenue for the country. Otherwise, governments had never planned nursery to flourish trade in this industry.
Clearly, the lack of government support has effected in the considerable numbers of knitwear units shutdown nationwide while "knitwear export has still a dominant position in the total textile goods moved across the border from Pakistan", he underscored. Knitwear was the third largest foreign exchange earner within the entire exportable textile products after cotton cloth ($1.93 billion) and bed wear ($1.88 billion) during last fiscal year 08 according to official estimate.
"Like of past this trade policy for fiscal 2008-09 also comprises volley of words, out of which nothing would translate into reality," he replied when asked comments about the yearly featured trade policies. In a quite bitter tone, he said, we had not a scintilla of vision about prospects. "We survive on present and have least concerns for our future; with so many years of prosperity and natural resources, what we did was to recklessly keep spoiling on and did not plan the future, and now the extravaganza has closed economy to an alarming zone," he flayed. Still we have a way out if mindsets turn around. He thinks problem lies in thinking process, adding, change of which will help reforming planned economy.
Similar doom of brainless progress has too been cast on the textile industry, which despite "multifaceted problems still stand on its own feet steadfastly", he said. But how long, he enquired, will the status quo maintain amidst mushrooming economic crises rising up the cost of production day by day. "The saddened reality is that sub sectors of agriculture sector are experienced disparate treatments," he said and added notwithstanding the understood fact world over that value added industry is well capable of absorbing employment and production process costs, no specific strategy for promoting value addition has been devised in Pakistan.
Textile industry adds value to agriculture produce and multiplies returns. In return, it has to endure electricity, gas, water, and inputs mismanagement, and that too against stark price differences. "Some textile companies even in the industrial areas have tub wells to meet water requirements." In different zones, we are charged with unequal electricity and other utilities tariffs.
He advises government can at least cope up with the increasing cost of production by rectifying internal root causes. One of such catalysts to cost of production is disparity in prices of inputs. At least textile companies should be provided gas at rates levied on fertilizers, he urged.
Given the precarious condition, government revenue will automatically slide down. Opposing the idea that high units be taxed, Bilwani says, all exporting products manufacturers should be exempted from taxes. He said government should withdraw all kind of taxes from foreign exchange earners. When asked what does such foreign exchange worth for the national treasure, he did not come up with an answer. But he thought tax exemption would encourage investments. Many other countries also lay down attractions for investors. Even if they donít withdraw taxes entirely, they have numerous other incentives for investors. At least, they give to investors due respect, which is totally absent in our business culture.
He says investment in knitwear manufacturing creates more employment opportunities when compared to other sub groups of textile. In a given proportion of investment knitwear occupation inducts more employees. Rolling back investment from knitwear industry, perhaps, is not inasmuch difficult.
Training and technical assistance to workers of knitwear and hosiery is very much needed in the country. He said while training institutes are operating nationwide, their numbers are not compatible with the demand of workforce. Besides, in-house training programmes run in different textile companies merely engage in capacity building of employees. Slight initiative has been taken to develop self-sustainable technical workers who are able to start up at their own. The association in collaboration with ministry of textile and industry is offering free knitwear and hosiery training short course for female to increase workforce in the industry. Previous experience of working in textile company is not prerequisite to participate in the course and matriculation is the sole criteria.