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TEXTILE COMPOSITE

Applied economics

Submitted By: ALI RAZA (06)

AHMAD ALI (17)
SHAH ABDUL AZEEM (18)
AMARA ASHFAQ
……
Instructor : Sir Badar UD DIN
Date : 23 Feb 2018
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ACKNOWLEDGEMENT

On the road to completion to this project there are many people that we would want to thank. We are
grateful to ALLAH Almighty who gives us potential to cover and hold this project successfully. We are
extremely grateful to our instructor Sir Badar for rendering her support and guiding us till the completion
of this project. The Special gratitude to all group members for explaining very interesting and relevant
information about the project and for the wonderful coordination. At the end we are highly obliged to
UCP as a whole, which made us capable to undertake this highly informative and practical research work.
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TEXTILE INDUSTRY OF PAKISTAN

Textile is a term that comes from “texture” which is a Latin word that means “to weave”. A cloth
is manufactured by weaving or knitting forms a fabric.

The textile industry is often considered a backbone of the Islamic Republic of Pakistan’s
economy. Pakistan’s textile Industry is the fourth Largest Cotton Producer, sixth largest importer
of raw cotton and the third largest Consumer.

INTRODUCTION
The textile industry contributes approximately 46percent to the total output or 8.5 percent of the
country GDP. In Asia, Pakistan is the eighth largest exporter of textile products providing
employment to 38percent of the employer of the country.

OVERVIEW
Pakistan’s textile industry ranks amongest the top in the world.Cotton based textiles contribute
over 60% to the total exports, accounts for 46% of the total manufacturing and provide
employment to

Pakistan’s textile industry

38% manufacturing labor force. The availability of cheap labor and basic raw cotton as raw
material for textile industry has played a major role in the growth of the Cotton Textile Industry in
Pakistan.
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PERFORMANCE CHART:

Performance chart
IMPORTANCE OF TEXTILE INDUSTRY IN ECONOMIC SECTOR:
Pakistan’s economy relies heavily on its cotton and textile sectors. The cotton-processing and textile
industries make up almost half of the country’s manufacturing base, while cotton is Pakistan’s principal
industrial crop, supplying critical income to rural households. Altogether, the cotton-textile sectors
account for 11 percent of GDP and 60 percent of export receipts.

TEXTILE SECTOR’S CONTRIBUTION TO THE ECONOMY OF PAKISTAN:

According to the economic survey of Pakistan2008-09 the Pakistan textile industry contributes more than
60% to the country total exports, which amounts to around 5.2billion US dollars.• According to the 2012
Economic Survey of Pakistan, issued by the finance ministry, the textile industry itself constituted about
4% of the total size of the economy.

TOP BUYERS OF PAKISTANI TEXTILE GOODS:

They are USA, UK, Hong Kong, Japan, Korea, Saudi Arabia, Italy, Turkey, Germany, Norway, France,
Canada, Sweden, Australia, etc.

IMPORTANCE OF TEXTILE SECTOR:

In Asia, Pakistan is the 8th largest exporter of textile products. Cotton is the basic Cash crop of Pakistan.•
Textile products are one of the essential and basic human requirement next to food.• Pakistan is the 3rd
largest exporter of raw cotton

Cheap labor and raw cotton are available. It provides employment to 38% of the work force in the country
which amounts to a figure of 15million. However, the proportion of skilled labors very less as compared
to that of unskilled labor. Pakistan is the 2nd largest supplier of cotton yarn with 26%share of the
international market.
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SECTORS OF TEXTILE INDUSTRY:

 Spinning
 Weaving
 Processing
 Printing
 Garment manufacturing
 Filament yarn manufacturing

FACTORS OF PRODUCTION:
Cotton is an economic asset of Pakistan, it is a natural fiber used primarily as a raw material in
textile industry. The World cotton production is estimated at118.8 million bales in 2007-2008.

Textile Value Chain Process:

Cotton value chain starts from Ginning that adds value to it by separating cotton from seed and
impurities but Spinning can rightly be called as the first process of the chain that adds value to
cotton by converting into a new product i.e. conversion from ginned cotton into cotton yarn.
Since spinning is in the beginning of value chain, so all the later value added processes of
weaving, knitting, processing, garments and made-ups manufacturing are dependent upon it.

If spinning industry produces sub-standard yarn, its effect goes right across the entire value
chain. The spinning sector forms the heart of the textile industry. This sector produces yarn for
downstream sectors, namely weaving, processing and knitting. Pakistan is the third largest player
in Asia with spinning capacity of 5% of the total world and 7.6% of the capacity in Asia.
Pakistan’s growth rate has been 6.2% per annum and there is only Iran amongst the major
players.

TEXTILE NEWS:
Textile industry of Pakistan worst hit by powercuts. The energy crisis has forced the textile mills
to close their units, especially in Punjab the industry is under severe pressure. ChairmanAPTMA
Punjab said ”daily electricity load shedding has increased to 12hours. The Pakistan textile
industry contributes more than 60 percent (US $ 9.6 billion) to the country’s total exports.
However, currently this industry is facing great decline in its growth rate. The major reasons for
this decline can be the global recession, internal security concerns, the high cost of production
due to increase in the energy costs etc.”

A spokesman for the All Pakistan Textile Mills Association (APTMA) claimed that 60 to70 per
cent of the industry had been affected and was unable to accept export orders coming in from
around the globe, as a result of gas load shedding ‘’

PROBLEMS FACED BY TEXTILE INDUSTRY:

 Lack of Research and Development in Cotton Sector

 Lack of Modernize equipment
 Finance bill to burden industry further
 Increasing cost of production
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 Internal issues pose a Larger Threat for Pakistan’s Textile Industry

 Effect of inflation
 Energy crisis
 Electricity crisis
 Gas shortage
 Tight monetarypolicy
 Removal of subsidy on textile sector
 Lack of new investment
 Raw material prices
 Export performance of textile sector

SPECIAL ORGANIZATION:
All Pakistan Textile Mills Association (APTMA) is the chief organization that determines the
rules and regulations in the Pakistan textile industry. APTMA is the premier national trade
association of the textile spinning, weaving and composite mills. APTMA represents 391 textile
mills out of which309 are spinning, 45 weaving and 37 composite units

HUMAN RESOURCE:
The textile sector employs 45% of overall labor force, with 38% of the manufacturing Workers
employed under textile sector. Pakistan has the advantage of cheaper labor as compared to its
competitors, but unfortunately thelabor productivity is very low. There are hardly any training
programs to develop the skills of labor hence, the craftsmen entirely depend upon their inherited
skills with no advancement and movement towards technical knowledge.

CLIMATIC CONDITION:
Although Pakistan has the ideal climatic conditions for the growth of cotton providing a factor
advantage to the textile industry, but it is also quite vulnerable to pesticides that can lower the
yield per hector.ØThe textile sector is largely dependent on the supply of raw material of the
agricultural sector and hence whatever happens to the agricultural sector like floods will
adversely affect the textile industry rendering it even more vulnerable to environmental
conditions.

TRAINING:
Limited availability of trained technical staff to maintain and run machinery at full efficiency is a
constraint upon the developmentof Pakistan’s textile industry. This shortfall is partly due to a
lack of technical education facilities. Some of the developments in the textile industry include:
Advances in ring spinning, computerized dyeing and finishing, computer-aided designing ,
manufacturing and developing retailing links hence, all these demand new and greater skills and
Pakistan lacks it.

EDUCATION:
Education is essential for the development of the textile industry. Even if the basic factors are
present, unless value-addition is not done on them, they will not be productive enough. Even if
there is not enough production a country could still manage through research and development.
A recent survey shows technical manpower requirement is 12,750 graduates whereas total
number of technical personnel available up to 2003 was approx.7, 950, so there is a shortage of
4,800 graduates in textile science.
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ADVANTAGE:
The advantage of cheap labor as compared to its competitors, but unfortunatelythe labor
productivity is very low.

DISADVANTAGE:
There are hardly any training programs to develop on the skills of these labors and the craftsmen
depend upon their inherited skills with no advancement.

STRENGTHS:

 Self-reliance
 Manufacturing flexibility
 Abundance of raw material production
 Design expertise
 Availability of cheap labor
 Growing economy and domestic market
 Progressive reforms

WEAKNESSES:

 Highly fragmented sector

 High dependence on cotton
 Lower productivity
 Declining mill segment
 Technological obsolescence
 Non‐participants in trade agreement

RESEARCH & DEVELOPMENT:

Developed countries are using the technology of biotechnology and genetic engineering to
increase the quality and quantity of their cotton production. In Pakistan, there is very some
research done on small scale by private companies. Practically no efforts are being made by the
APTMA in theR&D of the textile industry to enhance the quality of its products.

 Highly fragmented sector

 High dependence on cotton
 Lower productivity
 Declining mill segment
 Technological obsolescence
 Non‐participants in trade agreements
 Poor quality standards
Pakistan’s textile industry should focus on latest material handling techniques and should train
workers. The inability to timely modernize the equipment, machinery and labor has led to the
decline of Pakistani textile competitiveness

THREATS:
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1. New competitors
Pakistan are facing new competitors in textile sector such as Bangladesh, Vietnam and Turkey.
Though we cannot avoid competition but we can always stay ahead of them by reforming our
strategies and educating our entrepreneurs so as to move one step forward in every aspect.

2. Phasing out of quota system

As the quota system is ruled out by WTO, there is a threat by the Chinese and Indian
manufacturer to gain most of the market share. We have high costs, low labor productivity and
inefficient production processes.

3. Fashion life cycle

Fashion changes day by day these days. Media has so much penetrated in our daily lives that we
easily adapt ourselves as it wants us to. This has resulted in shortening the fashion lifecycle thus
increasing the fashion risk. Now the buyer does not want to wait long for his consignment
because he is insecure that by the time it will reach to him he will lost its demand due to change
in fashion. Therefore, they prefer to buy from neighboring countries even at higher cost to get
their products instantly rather than to wait weeks or months for their consignments to reach
them.

Stiff competition from developing countries especially China and India, Pricing pressure,
Locational disadvantage, International labor and environmental laws.

ENVIRONMENTAL ISSUES
Textile industry is associated with some environmental issues some of them are:

 Large volumes of water

 Usage of complex chemicals
 Discharge of untreated effluent
 Water Pollution,
 Air Pollution.
 Labors concern.

RECOMMENDATIONS

 Remedy though Foreign Direct Investment (FDI)

 Image Building of Pakistan to attract Foreign Direct Investment (FDI)
 Focus on Value Addition
 Technology Up-gradation & Capacity Building
 Human Resources Development
 Subsidy Removal should be taken a back
 Interest Rate should be Low in order to survive
 Electricity & Gas Tariff
 Removal of Energy Crisis
 Exploration of new Export Markets
 Reducing the cost of doing Business in Pakistan
 Needs for Improving Textile Production
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 Improvement in productivity
 Awareness of International Quality Standards
 Introducing concept of on the job-training
 Introducing efficient management techniques

CONCLUSION
Textile industry is the backbone of the Pakistan’s economy. The textile industry of Pakistan
plays an important role in earning foreign exchange, providing employment to the country.
Pakistan’s textile industry is going through one of the toughest periods in decades. Our textile
sector needs to capitalize on the new emerging opportunities by adhering to global best practices,
adapting rapidly changing technologies, better supply chain management while trying to reach
global value chains.
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Top four firm of Pakistan textile industry

1. Nishat Mills Limited

2. Gul Ahmed Textile Mills Limited
3. Masood Textile Mills Limited
4. Nishat (Chunian) Limited

1.Nishat Mills Limited

Company profile :
Nishat Mills Limited is the flagship company of Nishat Group. It was established in 1951. It is
one of the most modern, largest vertically integrated textile companies in Pakistan. Nishat Mills
Limited has 227,640 spindles, 805 Toyota air jet looms. The Company also has the most modern
textile dyeing and processing units, 2 stitching units for home textile, Two stitching units for
garments and Power Generation facilities with a capacity of 120 MW. The Company’s total
export for the year 2016 was Rs. 35.931 billion (US$ 344.744 million). Due to the application of
prudent management policies, consolidation of operations, a strong balance sheet and an
effective marketing strategy, the growth trend is expected to continue in the years to come.

Products of NML:

The Company's production facilities comprise of spinning, weaving, processing, stitching and
power generation.
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Gul Ahmed Textile Mills Limited:

The Gul Ahmed Group (cloth company) is a Pakistani company that includes Gul Ahmed
Textile Mills, Gul Ahmed Energy and Habib Metropolitan Bank. More recently, a chain of retail
outlets has been operating under the name "Ideas by Gul Ahmed". The group's other concerns go
by the name of Swisstex Chemicals (Private) Limited, which is a large chemical distribution
company that has the sole rights for supplying Ciba Specialty Chemicals in Pakistan. The group
has invested in outsourcing information technology with Arwen Technologies.
The Gul Ahmed Group began trading in textiles in the early 20th century. In 1953, the group
decided to enter the field of manufacturing under the name Gul Ahmed Textile Mills Limited,
and was incorporated as a privately limited company. In 1970, it was listed on the Karachi Stock
Exchange. Since then, the company has made rapid progress and, in 2017, has a market
capitalisation of Rupees 12.7 billion (0.12 billion U.S. dollars) and one of the leading composite
textile houses in Pakistan.

Products of Gul Ahmad textile mills Ltd:

 Fabrics,
 Bedding
 Yarn
 Apparel
 accessories

MASOOD TEXTILE MILLS:

Masood Textile Mills (MTM) is a vertically-integrated textile manufacturing company based out
of Faisalabad, Pakistan with in-house yarn, knitting, fabric dyeing, processing, laundry and
apparel manufacturing facilities. MTM is publicly listed on the Pakistan Stock Exchange. It is
currently the largest knit-wear manufacturer and exporter in Pakistan.

PRODUCTS

 Yarn
 Knitting
 Fabric dyeing
 Processiong
 Laundary
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Nishat (Chunian) Limited:

Nishat Chunian Group has an enviable business history of over two decades. From a modest
start in 1990 with a spinning mill of only 14,400 spindles, the group today has a vertically
integrated textile company which prides itself of being the fourth largest textile company in
Pakistan (in terms of turnover). In 2007, the group diversified into the power sector by
setting up a 200 MW Independent Power Plant, followed by incorporation of Nishat Chunian
USA Inc. in 2013. Another company was added in 2014- NC Electric, a captive power plant,
the first coal fired power plant in the textile industry. The group further branched out into the
entertainment industry by setting up NC Entertainment in 2015.

Products of Nishat Chunian:

 Bed Linen
o Products in this category include Flat Sheets, Fitted Sheets, Pillowcases, Pillow
Shams, Dec Pillows, Bed Skirts, Duvet Covers, Comforter Shells and Bed in a
bag.
 Quilting
o Availability of Single needle as well as multi needle Embroidery Quilting
Machines allow us to produce a diversified range of quilting designs and
embroidered quilting Patterns.
 Embroidery
o State of the art Multi head embroidery machines from “Barudan” delivers very
fine, intricate and high quality Embroidery designs.
 Curtains
o The product range also includes 100% Cotton & Cotton Polyester Blended
Window and Shower Curtains. Some of the different styles that we offer are Tab
Top Curtains, Rod Pocket Curtains, Back Tab Curtains, Grommet Curtains and
Tie Backs.
 Table Linen
o We produce Table cloths, Table Runners, Napkins, Kitchen Linen and Ruffles
Round.
 Institutional Textiles
o Health Care Textiles and Hospitality Textiles.