MECHANISED FOOTBALL-MAKING BEGINS IN PAKISTAN

SYED FAZL-E-HAIDER
(feedback@pgeconomist.com)
Aug 16 - 22, 20
10

Pakistani manufacturers have started production of mechanised footballs by establishing new units in the country as several Chinese companies have reportedly shown keen interest in importing mechanised footballs. China is the largest exporter of footballs to the US.

The penetration of machine-made footballs in the international market has caused a serious dent to the country's hand-stitched soccer industry. Pakistani football lost market to China, as local manufacturers were facing rising cost of production due to rising POL prices and unreliable power supply. The experts believe that the local industry has made a shift from hand stitched balls to mechanically stitched balls bringing in use the advanced technology, as the industry cannot survive with outdated manufacturing techniques.

China produced the thermally bonded soccer balls for the recent 2010 FIFA World Cup, while Pakistani footballs were used for only training and promotional purposes and not for the playing purpose. The World Cup organiser, Fifa, has a policy banning child labor at factories which produce its official balls. The most production takes place in Chinese factories where some workers reportedly complained of unsafe conditions and forced overtime. In Pakistan, most footballs are stitched by casual workers who work in cottage industries, rather than official factories. The local soccer ball manufacturers had been able to grab only 30 per cent of the total orders floated globally for the recent mega event, compared to the 70-80 per cent the country bagged during the 1998 and 2002 World tournaments.

At least 10 units have reportedly started manufacturing mechanised footballs in Sialkot in Punjab province, according to Safdar Sandal, former chairman Pakistan Sports Goods Manufacturers and Exporters Association.

The local manufactures have created a Sport Industry Development Trust (SIDT) with one hundred units pooling Rs100,000 each to raise the seed money of Rs10 million. The arrangements have been finalised for setting up a Sports Industry Development Centre for the modernisation of the soccer ball manufacturing units enabling them to cope with the new challenges of the global market.

Having a huge market, Chinese are interested in importing Pakistani machine-made footballs. China had already received large export orders of footballs from a number of countries ahead of the 2010 Football World Cup. Adidas, the German company and a major World Cup sponsor, had chosen China for producing the thermally bonded balls for the 2010 World Cup. Pakistani footballs had been the preferred choice for Adidas in the 2006 Fifa World Cup. Pakistani football lost market to China, as local manufacturers were facing rising cost of production due to rising POL prices and unreliable power supply.

The country had exported around 3.5 million footballs worth $5.2 million for the recent 2010 Fifa World Cup for training purpose. Only a few years ago, the south Asian country has been exporting on average 40 million balls worth $210 million produced annually by some 60,000 highly skilled laborers. New players in the international market, particularly China, India, Japan, and Thailand have posed a real challenge to local football industry.

"Lack of modern technology is the main factor in tilting the balance against the local industry," APP reported Ziaur Rehman, the chairman Pakistan Sports Manufacturers and Exporters Association as saying. "In the past we have been contributing millions of dollars to the national kitty by exporting footballs but our share in the international market has registered a significant decline, mainly due to the use of machine-made balls for the main events."

The industrial city of Sialkot in Punjab province is internationally known for its sports goods. Sialkot is the country's football stitching capital. The export-oriented industries in Sialkot are presently in severe financial crisis due to power and gas shortages. In the last fiscal year, which ended on June 30, soccer exports witnessed a decline, as the soccer ball exporters were facing cancellation of orders for the World Cup 2010 by their foreign buyers due to long power outages causing delay in timely delivery of consignments.

Sialkot gained international celebrity status when it produced the "Tango" ball for the 1982 World Cup in Spain, kicking off a lucrative industry. Sialkot's hand-stitched ball industry with nearly 50,000 stitchers is a big business, which has been affected by the machine-made footballs.

In the year 2006, Sialkot football industry's share in the international market took a significant hit with the entry of new players in the market, notably China and India, according to a report recently published in Express Tribune. Manufacturers from these countries were able to supply balls at a much cheaper rate. The local football industry earned $164 million in export earnings in the financial year 09, as against an average of $221 million per annum earned during financial years 2005-08. Power and gas shortage and technology are major factors in tilting the balance against the local industry.

Sialkot's strong production base has led to the completion of the Sialkot Export Processing Zone (SEPZ). The availability of special incentives, experts, cheap labor, and complete infrastructure facilities in the zone has attracted foreign investors to establish joint ventures with local industrialists. The SEPZ has been developed on 238 acres of land and consists of 900 plots of four different categories. About 22 different industrial units have been accomplished at the SEPZ. Generations of local artisans and laborers have passed down the skills for crafting footballs that are used in international games including the World Cup.

Some five years ago, about 80 percent of the world's soccer balls were produced in Sialkot by Nike, a US multinational. Nike is the world's leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities.

In November 2006, the Nike had severed its import relations with Saga Sports, a Pakistani manufacturer, for alleged violation of code of conduct on worker rights and child rights. It however continued working with its contract factories in China and Thailand to supply hand-stitched balls. Resultantly, Pakistan lost a guaranteed export of about Rs2 billion per annum. At the time of suspension, Saga was supplying 15,000-25,000 balls per day. Each ball depending on quality is to fetch $5-8 to Pakistan in foreign exchange. Saga Sports alone accounted for $33 million of the industry's $210 million total.

The Nike had alleged Saga Sports for hiring outside manufacturers and part-time workers and paying them in per-ball basis for manufacturing and supplying sports goods to Nike.

Former Prime Minister Shaukat Aziz held meeting with President of Nike at Davos in 2007 and assured him of strictly following the international standards and labor laws pertaining to workers rights and working conditions in soccer ball industry.

In 2007, the Nike agreed to resume imports of about 5,000 footballs per day from Pakistan and to increase it to about 15,000 per day after 90 days of successful operations. Silver Star Group, a local soccer manufacturer, was reportedly given a contract of 2-3 million footballs per day out of Nike's international supplies of about 6-7 million balls.

The penetration of machine-made balls hit the local hand-stitched soccer industry. Local industry is currently in process of buying latest machinery, as machine-made footballs have adversely affected their businesses. Experts believe that in the present scenario of fast growing globalization hand-stitched balls will not be able to compete with machine-made footballs; hence, it is important that the local industry moves forward and embraces new technology to meet the needs of the international market.