pakistan textile industry

1. Presented by ;
– Muhammad Taimoor Saifal
– Aliya Nawaz
– Muhammad Atif khattak
– Zahid Gul

2. Textile
Industry Of
Pakistan

3. Introduction
– 1947 (6) (521)
– Pakistan's’ largest industry and manufacturing sector.
– GDP 8.5%, high employment opportunities (15m) and bringing in foreign exchange.
– 4th largest producer of cotton yarn and cloth.
– 3rd largest consumer of cotton.
– 2nd in the export of cotton
– 2nd largest supplier.
– 8th largest textile exporting country.
– 26% share in international market.

4. – GDP 6.2 % 2016-17
– Basic raw material cotton
– 60% export US $ 5.2b
– Top buyer

5. Buyer of Pakistan textile good
– U.S.A.
– UNITED KINGDOM
– GERMANY
– CHINA
– ITALY
– BANGLADESH
– SPAIN
– UAE
– BELGIUM
– TURKEY
– NETHERLANDS
– HONG KONG
– FRANCE ,SAUDI ARABIA, SOUTH AFRICA ,,CANADA
PORTUGAL .SRI LANKA S,OUTH KOREA ,AUSTRALIA
OTHER
30%
14%
7%
6%
5%
4%
3%
3%
3%
3%
3%
3%
3%
2% 2% 1% 1% 1% 1% 1% 1%

6. Textile Industries
– Cotton industry.
– Woolen industry.
– Silk industry.
– Linen industry

7. Main Sectors
– Spinning.
– Weaving.
– Finishing.
– Dyeing/ Printing.
– Pressing.
– Fashion designing.

8. Process Of Textile Value Chain
Textiles planning
Spinning
Weaving
Dying
printing
Raw material Apparel plant Distrib. centers
Retail stores
customer

9. Key Drivers
For Change

10. Key Drivers For Change

11. Driving Forces In Textile
Industry
– Legal factors
– High government taxes.
– F.B 2009-10 SED
– Government-backed supportive policies.
– Heavy subsidies .
– External trade (high import duties)
– APTMA –government
– Textile Policy 2009-14 Analysis ( $25 b exports, 40b)
– 17%GST
– P(CAPTA) ,C(PRGMEA)
– United States & uk cuts imports ( high duties, cancel 50% orders)

12. Driving Forces In Textile
Industry
– Economic factors:
– Increase Cost of Production ( interest rate, inflation, depreciation of Rs.)
– Electricity Crisis (30% less load shedding)
– Raw material Prices fluctuates (downsizing)
– Social Factors:
– Customer taste changes frequently.
– Design can obsolute very quickly.
– Need innovation every other minute.

13. Scenario Building
And
Alternative Plan

14. Scenario 1 (Inflation and taxes)
Good
possible
worst
possible
best
possible
fair
INFLATION
TAXES

15. Alternative plan
– Inflation & tax high worst possible
– inflation high & tax low good possible
– Inflation & tax low best possible
– Inflation low & tax high fair possible

16. Scenario 1
–Inflation and taxes
– ALTERNATIVE PLAN:
– More policies that support textile industry should be introduced and
implemented.
– Policies that are more friendly, unlike textile policy 2009-14.
– Material wastage at different levels of production process should be
minimized
– Alternative sources of electricity supply, reduced gas terrify etc

17. Scenario 2 (awareness and
disposable income)
Worst
possible
good
fair
Best
possible
Customer
behavior
(awareness)
Disposable income

18. Scenario 2 (Disposable Income
and awareness)
– ALTERNATIVE PLAN:
– Pakistan’s textile industry should focus on latest material handling
techniques and should train workers
– Improve production process
– Knowledge of customer choice

19. Industrial
Analysis

20. Porter’s Five Forces
– The most widely used framework for analysing industry attractiveness is
Porter’s five forces framework.
– The five forces at play in any industry are:
– Threat of potential entrants.
– Threat of substitutes.
– Power of buyers.
– Power of suppliers.
– Competitive rivalry.

21. Threat Of Potential Entrant
– Profitable markets that yield high returns will attract new firms. This results in many new
entrants.
– Competition in this industry is not only limited to domestic competitors but it is rather
global competition. Therefore the porter’s forces are explained in this wide perspective.
– Barriers to entry
1. Capital requirements.
2. Risk of retaliation.
3. Patents.
4. Customer loyalty.
5. Absolute cost.

22. Threats Of Substitutes
– In textile, identifying substitute product groups proves difficult.
– Variations in types of clothing and material. Variations in textile segment can
also be identified as trends in fashion and styles.
– There is no substitute to apparel

23. Power Of Buyers
– The bargaining power of customers/buyers is strong.
– For that reason, it is of importance for a producer of apparel to differentiate
their products or production so it will not compete with price as primary mean.

24. Power Of Suppliers
– The large number of available suppliers in Pakistan gives an initial indication of a
weak bargaining position for the supplier group.
– Additionally, the supplier group lacks switching costs and has a low level of
product differentiation. This leads to great possibilities for textile manufacturers
to scout the supplier group for best terms and prices for production
– As a result, manufacturers can contact a large number of suppliers and play
suppliers against each other.
– Such behavior weakens the bargaining power for suppliers and as a result
pushes prices down and makes prices similar among suppliers.

25. Competitive Rivalry
– The apparent high growth rate of total textile exports indicates that the rivalry
between manufacturers is low.
– Textile as a perishable product group is in the risk of temptations to cut prices
when demand slackens.
– Both these factors exemplify and indicate that the rivalry between
manufacturers is high.

26. Textile Industry’s
Life Cycle

27. Industry life cycle
– Pakistan was once leading textile sector.
– It has lost i’ts international market share from 2.2% in 2006 to 1.7% in
2017.
– Poor trade performance because of diminishing export competitiveness.
– Pakistan’s exports dropped by 20%.
– The policies have not been implemented.

28. Industry life cycle
– Countries % Change 2011-17
– India 31%
– Bangladesh 63%
– Vietnam 57%
– Sri Lanka 20%
– Pakistan -10%

29. Industry life cycle
– The major reason behind this decline:
– Failed to innovate and modernize production.
– Electricity crisis .
– Low profitability due to ever-increasing cost of doing business.
– High raw material price
– R& D

30. Industry life cycle
– 70 % to 80% machinery is more than 10 years old.
– Employee
– Production capacity

31. Industry life cycle
– Effect of inflation
– Lack of new investment
– Export performance

32. Conclusion
– The threat of increased competition globally.
– Awareness of international standard
– In order to compete with the world (C&Q)
– The textile sector is at declined stage. (INNOVATION)
– Revision of Government policies is required
– Human Resources Development
–

33. Thank you