Challenges Faced By Pakistan Textile Industry


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Challenges Faced By Pakistan Textile Industry

  1. 1. Challenges Faced By Pakistan Textile Industry BBA 5rd Semester A Batch 2010- 2014
  2. 2. Group Members Haris Khan Abdullah Safir Sardar Abdul Saboor
  3. 3. Contents Textile Industry Policies Statistics Problems Recommendations
  4. 4. Textile Industry The textile industry is primarily concerned with the production of yarn, and cloth and the subsequent design or manufacture of clothing and their distribution. The raw material may be natural, or synthetic
  5. 5. Production Process Cotton Ginning Filaments Weaving Printing & Dyeing
  6. 6. Statistics Pakistan has dynamic, vigorous and export oriented textile industry that has an overwhelming impact on economy. Textile being largest industrial sector generates the country’s highest export earnings of about 58%; providing the bulk of employment (39%) to largely under utilized workforce, and contributes 8.5% to GDP.
  7. 7. Textile industry trend during last ten years. The Multi Fibre Arrangement (MFA) governed the world trade in textiles and garments from 1974 through 2004, imposing quotas on the amount developing countries could export to developed countries. Source Economic survey of Pakistan SBP.
  8. 8. Challenges • Energy Shortage – As a consequence of load shedding the textile production capacity of various subsectors has been reduced. The representatives of the all textile associations presented their serious concerns on the huge losses being incurred due to electricity & gas load shedding and the instant rise in the Electricity tariff. They said that the industry has already been crippled due to record high load shedding.
  9. 9. • High Taxes – The provisions of Finance Bill 2009-10 are not textile industry friendly at all. Provisions like reintroduction of 0.5% minimum tax on domestic sales, 1% withholding tax on import of textile and articles, 16% Federal Excise Duty on banking and insurance services besides withdrawal of exemption of 16% sales tax and 4% withholding tax on machinery and parts in the Finance Bill 2009-10 are badly affecting already crippled industry.
  10. 10. • Image Problem – United States cancel more than 50% of textile orders of Pakistan .US also impose a high duties on the import of textile of Pakistan which effect the export in a bad manner. US & EU are the major importer of Pakistan textile which creates a huge difference in export of Pakistan textile after imposing a restriction on import of Pakistani textile goods.
  11. 11. • Cotton Production The cotton production dropped to 12.845 million bales up to March 15, 2013 as against 14.548 million bales produced in the corresponding period last year. Data was jointly compiled by the Pakistan Cotton Ginners Association, All Pakistan Textile Mills Association and Karachi Cotton Association.
  12. 12. Other Factors Raw material Prices Lack of new investment Lack of Research & development (R&D)
  13. 13. Because of these problems Pakistan’s exports which declined by over 9.64% during the last 11 months. On the contrary, the textile exports from India, China and Bangladesh have increased by 5%, 6% and 8% respectively during the same period. Chairman Rana Arif Tauseef Pakistan Textile Exporters Association(2012)
  14. 14. Textile Policy 2009 – 2014 Textile Policy 2009 – 2014 • Objectives – Support development of allied industry – Promote research and development – Encourage exports
  15. 15. Primary Target The primary target of the policy will be to double the rate of value addition in textiles chain from the present $ 1 billion per million-bales to $2 billion per million- bales over the next five years.
  16. 16. Recommendations • Revision of Government policies is required – There are non-conducive government policies in term of bank loans and interest rates. – The government may give subsidies to share the burden of the industry.
  17. 17. • Focus on Value Addition – Pakistan is a leading exporting nation in raw yarn, cotton, and fabrics. If we emphasis on the value added products like garments, Hosiery, knitwear and other textile madeups, the export volume of textiles can be increased by manifolds. In this respect top priority should be given to stitching industry that leads to highest value addition and employment generation
  18. 18. • Technology Modernization – Sophisticated technology should be introduced to compete with the other countries (India, Bangladesh & China) in the global market in term of cost and quality.
  19. 19. • Human Resources Development • The Textile Board should establish a separate training wing as a Center of Human Resource Development where training courses should be conducted for the capacity building of labor. There is also urgent need to increase the number of such Vocational Institutions where modern technical education is provided.
  20. 20. References
  21. 21. Any Questions…? FIN