Fiscal and Monetary policy

Consumption Lead Growth:

Researchers recorded that Pakistan is exporting a large portion of its sports goods from
Sialkot to international famous brands like Adidas, Nike, Puma, Lotto, Umbro, Mitre,
Micassa, Diadora, Wilson and Decathlon. They also recorded that in the country no doubt
sports goods industry plays a vital role in foreign trade of sports goods. Now, this industry is
exporting its products to dissimilar estates globally. These products are manufactured to
export according to requirements of foreign targeted markets.
Due to better quality of sports goods Pakistan’s sports items gain foreign fame. Because of its
well production process starts from adaptation of raw material to delivering to customers.
This process involves better selection of raw material, designing of goods, production process
and timely delivering to customer. Today the Pakistan’s sports goods are being explained by
the following statistics.
1. During FY2015-16, sports goods posted a slight fall of 1.6 percent in value during
July-March FY2016 against the corresponding period last year; while on month-on-month
it registered a growth of 2.3 percent in value. The export of football during July-March
FY2016 grew by 3.2 percent in value and 17.4 percent in quantity, but on month on month
it enhanced by 2.6 percent in value and in quantity fell by 4.8 percent.
2. During FY2016-17, in case of sports goods, major item export of football recorded a
fall of 9.7 percent against 7.2 percent fall in quantity terms explained that prices were not
favorable in international market.
3. During FY2017-18, sports goods recorded a slight raise of 0.5 percent in value during
July- February FY2018 against the corresponding period last year. Football with a share of
0.7 percent in total export rose both in quantity and value by 15.8 percent and 7.8 percent,
respectively, on account of an innovation driven football making company which
maintained the largest global presence with renowned global brands, organizations and
Pakistani football was used in FIFA World Cup 2018.
4. During FY2018-19, sports goods declined in value by 9 percent on the back of 7.35
percent fall in exports of football.
Furthermore, the sports goods industry in the country is chiefly clustered around the city
of Sialkot which accounts for nearly 95 percent of the industry’s total production. The
location of this cluster is largely a result of agglomeration economies with Sialkot being the
center of excellence for the production of sporting goods for greater than 100-years. This has
been attributed to the availability of skilled artisans and entrepreneurs in the city, which also
possesses favorable indicators in literacy, health, electricity and water facilities. In addition to
this, Sialkot also benefits from the availability of basic infrastructure for industry including a
dry port and an international airport which serves as an export hub for manufactured goods.
Experts also recorded that sports goods producers in Sialkot are predominantly small and
medium sized firms comprising over 360 formal and over 10,000 informal units. The main
sports goods produced can be divided into 5 categories that include articles and equipment for
physical exercise/gymnastics/athletics, articles and equipment for fishing, sports gloves,
articles and accessories for billiards also articles for funfair. Among these, articles for
gymnastics/athletics and articles for funfair have been the key drivers of the sports sector’s
growth in global market.

Furthermore, Pakistan is considered a leading manufacturer of football, cricket balls, hockey

sticks and cricket bats. Around the world these products enjoy market recognition. Statistics
showed that this industry has therefore been an integral part of Pakistan’s economy offering
employment to 300,000 to 350,000 skilled and unskilled laborers. In addition to this, the
sector also represents roughly 1.42 percent of Pakistan’s total export base. In spite of the
current and potential significance of this sector to Pakistan’s economy, it remains mired in
difficulties because of limited opportunities for growth. For instance, most of the firms in
Sialkot fall under the commercial exporters’ category which have minimal staff and
resultantly operate with a very short term orientation, facing high failure rates.
In addition to this, the present energy crises have adversely affected the sector’s
competitiveness and have been a serious impediment to its overall growth. Therefore this
industry has failed to perform to its capacity and hence faces a fall in its share of sports goods
exports. Although Pakistan’s sporting goods have enjoyed a good reputation globally, the
industry has failed to convert this into a sustainable and growing share in the global market,
with Pakistan accounting for less than 1 percent of the total globally sale of sporting goods.
Statistics also revealed that previously Pakistan’s global exports rose more than 100 percent
from US$7.5 billion in 1999 to US$18 billion during 2009. This is evident in the stark
differences between the average market share of exporting goods of China and Pakistan.
However, a greater cause for concern is that in present years, not only has Pakistan’s share of
sports goods exports fell, the sector has also registered the highest negative annual growth of
exports relative to its competitors.
Reference:
http://www.pakistaneconomist.com/2019/09/02/pakistans-sports-goods-and-global-image/

Supply Lead Growth:

Sialkot is the capital of the country’s sports industry. About 98 percent of products
manufactured in small and medium industries of the city are exported to various countries.
These industries, particularly sports industry, have been an important source of the foreign
exchange earnings for the country. More than 400,000 people are engaged directly or
indirectly with export activities in Sialkot, which earns around $1 billion from exports
annually. Sports goods sector is the main export sector of the city with total exports of $450
million per annum.
Soccer ball industry of Sialkot is famous for its unique production all over the world. Tango
Ball produced in the local industry was for the first time used in FIFA Football World Cup in
1982. Ahead of the FIFA Football World Cup 2014, over 42 million soccer balls worth
Rs17.473 million had been exported from Sialkot. Sialkot made soccer ball Brazuca was used
in FIFA Football World Cup 2014 matches in Brazil. The ball was produced by Forward
Sports Sialkot for Adidas. The Brazuca reflected unmatched skill and craftsmanship of local
workers. The global brands like Nike, Puma, Adidas, Decathion, Select, Litto, Umbro, Mitre,
Micassa, Wilsoms and Diadora have been sourcing their supply of footballs from Sialkot.

Sialkot caters to around 70% of total world demand of hand stitched inflatable balls which
translates into around 40 million balls annually worth $ 210 million. These balls are produced
by a workforce of nearly 60,000 and exported to world markets by 1,000 plus entrepreneurs,
majority of which fall under SME definition. Sialkot’s hand-stitched ball industry is a big
business, which has been affected by the machine-made footballs. The penetration of
machine-made footballs in the international market caused a serious dent to the country’s
hand-stitched soccer industry. But unfortunately, Pakistani football lost market to China, as
local manufacturers were facing rising cost of production due to rising POL prices and
unreliable power supply. The local industry has made a shift from hand stitched balls to
mechanically stitched balls bringing in use the advanced technology, as the industry cannot
survive with outdated manufacturing techniques. Having a huge market, Chinese are
interested in importing Pakistani machine-made footballs. China received large export orders
of footballs from a number of countries ahead of the 2010 Football World Cup. Adidas, the
German company and a major World Cup sponsor, had chosen China for producing the
thermally bonded balls for the 2010 World Cup. But proudly Pakistani footballs had been the
preferred choice for Adidas in the 2006 FIFA World Cup.
A number of units have started manufacturing mechanized footballs in Sialkot. Local
manufactures have created a Sport Industry Development Trust (SIDT) with one hundred
units pooling Rs100,000 each to raise the seed money of Rs10 million. With setting up of a
Sports Industry Development Centre(SIDC) for the modernization of the soccer ball
manufacturing units would enable the local manufacturers to cope with the new challenges of
the global market. The CIDC is a project of Small and Medium Enterprise Development
Authority (SMEDA) funded by Ministry of Industries and Production to help sports goods
sector to adopt new technology of mechanized thermo laminated balls by providing the
production facilities for SME’s, technical advisory services, mold making machinery services
and training to manpower. The project has been completed and it is currently rendering
services to the local sports goods industry.
Reference:
http://www.pakistaneconomist.com/2019/09/02/sialkot-sports-fame-and-economic-input/

Strategic Management for Industrial Development:

Small and Medium Enterprise Development Authority (Smeda) has prepared a multi-
dimensional strategy for the modernisation of Sports goods industry especially the soccer ball
manufacturing sector enabling it to cope with the new challenges of global market.

Official sources told Business Recorder here on Saturday that under the programme Sports
Industries Development Centre (SIDC) costing Rs 273.11 million would be established
shortly in Sialkot.

The Main concept of the project was to enable sports goods sector to adopt new technology
of mechanised ball, which was threatening the current hand-stitched inflatable soccer ball.

The main benefits to amass from the project were to facilitate in sustainable Pakistan's
position in international market of hand-stitched inflatable balls in general and soccer ball in
particular, provide skilled workforce to the sector, help develop imported machinery locally
through reverse engineering, develop an indigenous patent for mechanised soccer ball and get
it registered internationally, provide assistance in setting up mechanised ball production lines
in individual industrial units, developing proto type balls for the industry and developing
quality vulcanisation and past molds.

The Sports Goods sector of Sialkot was the main export sector of the city with total exports
of about $350 million per annum. The city caters to 85 percent of total world demand of hand
stitched inflatable balls, which means around 40 million balls annually worth $210 million.
Sialkot globally known for production of value-added products and quality production of
sports goods, surgical instruments, leather garments, musical instruments and sportswear etc
and contributing $800 million annually to national exchequer.

The local soccer ball manufacturers were facing serious threats in the form of "Thermo-
Molded Ball" that uses medium end technology to produce a ball having most of the
characteristics of hand stitched ball.

Under the plan SIDC will introduce thermo-bonded ball technology in Sialkot industry. The
SIDC would provide technical know how, trained labour force, reverse engineering prototype
development and mold making services besides, the centre will also manufacture and sell
thermo-molded balls to the exporters on order.

The capacity of the centre on single shift basis would be 5000 balls per day while the centre
will generate employment opportunity for 432 persons.

According to a rough statistics the balls were stitched by a work force than 60,000 including
female stitchers and exported to world market.
Reference:
https://fp.brecorder.com/2006/08/20060806461618/