Upswing in textile exports

From InpaperMagazine Updated Jul 08, 2013 03:18am Comment Email Print

INCREASED investment in textile machinery, cheap labour and improved manufacturing processes have increased earnings from foreign sales of cotton yarn, fabrics and value-added products. In the last three fiscal years, about $1.3 billion worth of textile machinery was imported, mainly for high-speed and qualitative yarn spinning, fabric-making and textiles made-ups manufacturing, according to the Pakistan Bureau of Statistics (PBS). This huge investment started paying off in FY13, when exports of value-added textile products picked up. One key factor behind the recent rise in textiles export earnings is that Pakistan has almost doubled its exports of cotton yarn and fabrics to China. In seven months of FY13, our textiles exports to China crossed the $1 billionmark, against half a billion dollars or so in the same period of FY12, according to data compiled by PBS. Cotton yarn constituted the bulk of shipments to China, as growing global demand for cheap Chinese textile made-ups created room for buying of cotton yarn from Pakistan. People associated with the textile industry say that whereas the energy crisis had hit all textile mills alike, particularly those in Punjab, some units had mitigated the impact by energy conservation and efficiency. Under a project of the National Productivity Organisation, a number of textile mills learnt how to become energy efficient. The first phase of the project, which was completed in 2012, helped some 60 mills cut energy consumption by 10 per cent, without sustaining any loss of productivity. The second phase aims at extending this programme to 150 mills. Besides this, a productivity benchmarking project of the NPO, which aims to ascertain quality norms for various sub-sectors of the textile industry, is also in progress. These are in addition to textile mills own initiatives for productivity enhancement, which include obtaining ISO certifications of varying degrees in different fields of information management systems, human resource management, production and workplace safety.

Compared to FY12, when overall textile sector export earnings were down 10 per cent to $12.357 billion, in 11 months of FY13, textile exports grew six per cent to $11.931 billion. And unlike in FY12, export earnings of value-added products also recorded an increase, ranging from a little more than two per cent (in bed wear) to 15.5 per cent (in towels). Export earnings of knitwear and readymade garments posted 2.4 per cent and 12.6 per cent growth respectively. Bedwear exports grew 6.6 per cent in volume, which suggests that a lower increase in its export bill was rooted in exporters strategy to remain competitive. What is important is that the declining trend (in exports of value-added products) seems to be over, says a local textile exporter. A combination of factors has pushed up exports. Weve invested in textile machinery, streamlined our manufacturing processes and focused more on designing. Interest rates have become a bit lower and joblessness in the country has kept our labour costs low, he adds. Textile millers say that between 2006 and 2012, hundreds of thousands of spindles and a few thousand shuttle-less looms had been added to textiles manufacturing base. But acute energy shortages keep the utilised capacity of medium and small factories below or around 50 per cent. Only large companies, that run captive power plants, are utilising higher capacity. Cotton cloth exports, however, have remained below two million square metres in the last two fiscal years, down about 10 per cent each year compared to FY11. But this is more due to higher domestic demand than exporters inability to sell abroad, says a leading yarn exporter. Most textile mills in the country, big or small, continue to remain competitive in yarn and fabrics manufacturing, which drives up exports. In FY12, exports of cotton yarn totaled 572,000 tonnes, up 6.7 per cent from FY11. And in 11 months of FY13, export volumes rose 29 per cent to 673,000 tonnes, fetching $2 billion against $1.6 billion in the year-ago period. The recent upswing in textile export performance appears to be sustainable in the near future because unlike in the past, the gains on the exports front is also reflecting in the stock market performance of major listed textile units this time around. And this also shows that despite all the problems facing the industry, individual textile units are keeping their house in order. According to an AKD research report, prices of 11 major listed textile mills recorded 216 per cent increase in the first half of FY13, and their price to earnings multiple rose to 4.3 against a three-year average of 2.2. Officials of big brand textiles say they are keenly watching the momentum of non-traditional foreign sales of textiles, particularly to Pakistanis living in the US, UK, UAE, Canada, Australia and Saudi Arabia. If brought into mainstream marketing, this would help further boost export earnings.

Thousands of men and women are now sending abroad high-quality, bigbrand cotton lawns and cotton suits, often after enriching them with embroidery or specific fashion works. Sometimes such dispatches are in the form of gifts, but in many cases these are plain commercial selling to people they know. If the services of such sellers are pooled and put to use under more scientific ways, it would supplement textile mills own efforts to market their products abroad