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Article for Textile)

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Published by: mms_mz on Sep 28, 2008
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06/13/2012

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M.Idrees AhmedTextile Commissioner 
 
June - 2004
GOVERNMENT OF PAKISTANMINISTRY OF INDUSTRIES & PRODUCTIONTEXTILE COMMISSIONER’S ORGANIZATION******
 
SUBJECT:-
 
FUTURE SCENARIO OF TEXTILE INDUSTRY
Textile Industry is the major economic sector of Pakistan and for quite some timeto come it will continue to be the main driving force in the industrial and agriculture area.It contributes more than 66% to the total export earning of the country, accounts for 46%of the total manufacturing and provide employment to 38% manufacturing labor force.The availability of cheap labor and basic raw cotton as raw material for textile industryhas played the principal role in the growth of the Cotton Textile Industry.Potentials of Textile Industry.During the boom periods Pakistan has emerged as the major supply source of cotton textiles in the world market confirming its competitive strength. Pakistan’s sharein the world yarn trade is about 30% and the share in cloth is 8%. This describes itscompetitive position in international market and future potentials for improvements &growth. The Textile Industry has an in built potential for performing better both in production as well as in export by virtue of its inherent competitiveness in theinternational market for its conventional products. However, to sustain its position and tomove in high value added products as well as for the increased market share, a largeinvestment in machinery equipment and new technology is essential.Textile Vision – 2005In order to revitalize the Textile Industry the Government of Pakistan hasdeveloped a Textile Vision – 2005 to serve as broad target to aim at ;An open, market driven, innovative & dynamic Textile Sector which is :
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Internationally integrated.
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Globally Competitive
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Fully equipped to exploit the opportunities created by the MFA phase out.Current & Future Investments.Textile Vision – 2005 has envisioned an investment program of approximatelyUS$.6 Bln. by next five years. The current trend is for establishment of Air jet Loomsunit & open width Textile Processing Units. In printing the major strength is of Rotary
 
-2-Printing Machine. Trends is the past had been for wider width fabrics, however, recenttread is for continuous bleaching, dyeing in medium width to cater to Garment sector.The processing industry is catering the needs of both “Home Textiles” & ReadymadeGarment Industry (local & export). Besides processed fabric is also exported in bulk.Introduction of Cad-Cam & laser techniques in Printing & Garment Units is recent phenomenon however, “Inkjet-Direct Printing & Weave – Gate network system” are being studied with interests.Almost all the major machinery manufacturers of E.U.& Japan in SpinningWeaving – Bleaching – Dyeing – Printing – Finishing – Knitting – Readymade Garmentsetc. are quite active through their agents in Pakistan. Major imports are from Germany – Holland –Switzerland – Italy – UK – France & Japan. The local agents have good liaisonwith their principals and also have back up service facilities.Industrial Policy:Developing countries, regardless of their ideologies have in the recent year beenre-assessing their industrial development policies with the basic aim of facilitatingindustrial change and re-develop competitiveness. With the onset of trade liberalizationunder W.T.O. and phasing out of quota restrictions under Agreement on Textile &Clothing’s a highly competitive Textile Trade environment is anticipated by the year 2005and beyond. It is clear that between developed and developing countries no one is prepared to lose its international market positions. The restructuring programs in futurewould thus aim at not to meet low-cost competition, but to meet high efficientlycompetition. The Industrial Development Policy should therefore stress on shifting theemphasis from creation of industrial capacity to the encouragement of more efficient useof resources, with the aim of increase in supply response in the short term, and broader industrial base that can sustain growth in output employment and productivity in the longrun. Besides grooming the domestic industry another way is to develop strategic alliancewith internationally progressive foreign firms in the form of joint venture with equity participation, technical know-how or marketing tie-up. In textiles Japanese and Chinesefirms can be persuaded for setting-up of joint venture in Pakistan.Performance of Textile Industry:The performance of Textile Industry during the last four years had beensatisfactory. The market was responsive, the Govt. Policy was supportive and inputs wereviable. The industry made profits and re-invested in new machinery for BMR andExpansion. This resulted into substantial increase in capacities of all products.Consequently yarn production has increased by 6%, cloth production by 14% andsynthetic fibers by 26%. The exports showed positive improvements and textile exportgrows from $ 5.9 billion last year to 7.4 in 2002-03. The Fabrics – Bedwear – Knitwear 
 
-3-& Garments crossed billion dollars level and consequently the share of made-up andclothing increased to 57% while share of yarn & fabric was 43%. The industry thoughfollowed “Low Road Scenario” but was moving in the right direction and preparing itself for the 2005 Scenario when a highly competitive environment would develop.Robin Anson a renowned consultant on textile in his address in at ITMFgave an overview of world textile trade and production trends, and highlighted theregions which would be most at risk after the elimination of quotas in 2005.China is onesure winner. The country possesses almost unlimited human resources and very lowlabour costs. In general terms, its people are hard working and motivated by a desire toimprove their living standards. And the surge in China's exports to the USA and EU in2002 and early 2003 was spectacular. Chinese exporters are equipped and able to respondquickly and flexibly to increases in demand. China has given companies in other developing countries a very loud wake-up call. They are worried about China's potentialto exploit the world's markets when quotas are eliminated at the end of 2004. Theconscious and forward looking entrepreneurs are pursuing one are more of the followingstrategies to prepare themselves for the competitive scenario of 2005.
improving production efficiency through increased automation;
re-engineering of production systems;
expanding capacity and integrating operations;
collaborations with foreign companies;
 backward and forward integration of operations;
moving up the value chain; and
enhancing marketing capabilities.For Mexico, quota-free access to the US market will cease to be a competitive weapon.However, Mexico will continue to enjoy the competitive advantages of market proximity, preferential tariffs and low labour costs. In addition, it will continue to benefit from closelinks and production-sharing arrangements with US manufacturers. Although China hastaken over as the USA's leading supplier -- and stands to make further gains in 2005 and beyond -- Mexico should be able to retain a high share. The same applies to Caribbeancountries, which have been granted enhanced benefits in recent years. For suppliers inCentral and Eastern Europe and the Mediterranean Rim, including Turkey, quota-freeaccess to the European Union will similarly cease to be a competitive weapon oncequotas have been eliminated for all. This is likely to lead to falls in market share at theexpense of Asian suppliers. But major exporters in the region will continue to benefitfrom market proximity, duty-free access and low costs. Also, ties with importingcountries will be strengthened for a number of the region's exporting countries in 2004when they join the European Union. Hong Kong is a likely loser but is a different case.Once quotas go, Hong Kong's advantages as a major quota holder will become worthless.

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