LAYOFFS STARTED IN TEXTILE INDUSTRY
TARIQ AHMED SAEEDI (firstname.lastname@example.org)
Feb 02 - 08, 2009
The shockwave of decline in the industrial output has engulfed a range of industries all across Pakistan translating into a nightmare mostly for industries with substantial shares in GDP and overall national exports and relatively high concentration of country's labor force as they are forced towards inhuman and most disliked stride called downsizing for compensating production losses and overarching cost of doing business arising out of chiefly electricity and gas load shedding.
"Only textile industry has 50% contribution in regression of industrial output," said Tariq Mehmood chairman All Pakistan Textile Mills Association when asked the industry's share in total industrial output decline by five percent during July-Nov FY09. It is safe to assume that so far 25% downsizing has been taken place in the textile industry owing to disturbed industrial production, he said while talking to PAGE on telephone from Lahore. Since there is no authentic source of information "we can not come up with an exact figure of actual numbers of employees who have fallen prey to industrial retrenchment", he added.
However, he verified that significant numbers of mills nationwide have been closed down leading to unemployment. He said partial closure of mills also unleashed job losses. 'One shift stoppage in a factory is analogous to 20% closure.' For instance, spinning mills and power looms have to cut back working hours because of lack in production orders and lingering electricity outage, said chairman association majority of 400 to 450 members of which belong to spinning sector. "We are still enduring eight-hour long spell of electricity outage in the province of Punjab," he underscored adding intensity of gas shortfall is really felt in the province. 'Textile industry remains prime casualty of blend of economic troubles as it directly employs 2.8 million of total workforce in the country.'
News reports about energy-deprived weaving and spinning industries are echoed nowadays that electricity and gas shortage are making them adopt labor cutoff measure. Yet, as the situation is spreading its arms it seems to be affecting both upstream and downstream sections of the textile industry, rippling domino-effect. Perhaps, the development has not as confined itself into a particular area but enveloped entire nation. It is different thing that its impact varies according to the level of energy supply constraint and industrial demands for any of electricity or gas sources of energy. It is reliably learnt that one wave of layoffs spilled over in the country's industrial hub Karachi and some garments manufacturing units (composite unit) from downstream sector initially hit by the energy crisis and range of production downsides are relieving themselves of workmen load.
While the information was not approved or disapproved, a source in Aptma commented "In a given precarious condition, there is a possibility that any composite garments unit might allow downsizing". "Basically, recruitment and layoff is an internal matter of members and the association is not aware of any development in this regard. There might have been some retrenchment in some composite units in Karachi, but I don't have any such information," said a former official spokesperson of the association.
Foremost challenge textile industry is facing presently is of uncertain supply line of electricity and gas, said Tariq. This gathers enormity from various other outlets for certain subsectors of the industry, he added. Consuming 100% cotton available for local consumption, spinning process getting slow due to input constraint like energy deficiency takes lower cotton intakes and subsequently produces low output for downstream sector. Energy crisis is increasing costs of raw materials.
He said in spinning 75% cost was made up of solely cotton. Replying to a question, he said annual cotton production had never been up to the mark in the country. There is an expectation of low volume of cotton production this year. It is usual to import raw cotton for local consumption due to insufficient local production. The import figure surpassed textile group import bill in the first half of the current fiscal year. Out of total $696 million spent on textile imports, $326 million was spent on raw cotton purchase from outside the country during the period.
He said with an important role in the economic building of Pakistan textile industry should be given full support to deal with competition in the international market. "That textile industry has begging bowl to cry for charity is a wrong impression to have been created. We ask for support which is common in all textile oriented economies," he said. 'Other countries are providing incentives to industries.' From downstream to upstream there is value addition, he mentioned referring to a suggestion to link government financial assistance to instances of value addition in an industry. 'Even there is value addition in spinning sector.' Most basic issues should be resolved immediately, he urged.
The textile industry woes have been building up since many years but have become severe now, he said. When asked about strategy to tide over the crisis, he answered "major problem lies in electricity and gas scarcity that is playing havoc with the industry", adding "its redressing means end of a part of crisis". Solutions for textile industry lie in government will that can provide immediate remedies. We have been hearing of textile policy for fifteen years, sarcastically concluded Tariq.