TEXTILE VALUE

TEXTILE CHAIN (TVC)

POLICY
2020-25

TASKFORCE ON
TEXTILES

Shahid Sattar

Executive Director APTMA

Former Member Energy, Planning Commission
TEXTILE VALUE CHAIN

 Pakistan is one of the few countries having a complete textile value

chain – FARM TO FASHION

 Textile Sector is the biggest employment generator- especially

Garments.

 $1.5 / kg cotton can be converted up to $25 / kg product.

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TEXTILE VALUE CHAIN

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STRUCTURE OF
APPAREL/GARMENT
GVC

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 Pakistan as a
Pakistan World’s Best
Crop percentage of
(Tons/Hectare) (Tons/Hectare)
best

Wheat 3.1 8.1 (France) 38%

Cotton 2.5 4.8 (China) 52%

AGRICULTURAL Sugar Cane 63.4 125.1 (Egypt) 51%

PRODUCTIVITY
Maize 4.6 11.1 (France) 41%

Rice 2.7 9.2 (USA) 29%

Source: Pakistan Business Council (PBC)

* As a result, the cost of production of cotton in Pakistan is more than

the double of world average.

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  Decreasing profitability of cotton
 Poor planting seed
 Poor research support for farmers
 Major insect problems (resistant pink bollworm, whitefly)
Unmanaged access to once in a life-time transgenic cotton
technologies (ad hoc adoption → resistance
PROBLEMS
 Water - delivery to farm & drainage/storages on farm
 Climate change - heat tolerant cottons
 Rural labor issues - machine pickable cottons
 Insecticide resistance monitoring & management
 Climate change - more weather stations required, untimely
late rains
 Outdated ginning technologies
 HVI testing - different labs give different results
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 2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2017-18

2018-19

2019-20
COUNTRY/ % Change
PROVINCE 2011-20

  COTTON AREA (million hectares)

PAKISTAN 2.86 2.88 2.80 2.89 2.86 2.41 2.70 2.68 2.51 -12%

PUNJAB 2.53 2.31 2.22 2.32 2.24 1.77 2.53 2.29 1.86 -27%

RAW
COTTON AREA, SINDH 0.26 0.53 0.57 0.63 0.62 0.63 0.61 0.39 0.65 150%
MATERIALS
PRODUCTION & YIELD
  COTTON PRODUCTION (million bales)

PAKISTAN 13.60 13.03 12.77 14.86 9.77 10.73 11.94 10.84 8.57 -37%

Cotton PUNJAB 11.13 9.52 9.15 10.90 6.00 6.94 8.07 8.07 5.09 -54%
-54%

SINDH 2.36 3.40 3.52 3.98 3.77 3.79 3.87 2.60 3.47 47%

  COTTON YIELD (Kgs. per hectare)

PAKISTAN 815 769 774 782 508 756 752 687 580 -29%

PUNJAB 747 701 707 712 421 664 669 600 466 -38%

SINDH 1,546 1,090 1,055 1,064 939 1,012 1,049 1,122 904 -42%
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SOURCE: TCO/PCCC/PBS
 Yield Kg/hec
Country
2011-12 2019-20 % Change
China 1,345 1,800 34%
India 518 542 5%
Pakistan 815 580 -29%
Source: USDA, PCCC
GLOBAL COTTON Just through Yield catch up with China; Pakistan’s production will go up to 26
YIELD GROWTH million bales.
GLOBAL COTTON YIELD GROWTH

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 45.00 600

566
554
40.00 542.465220352174
524
504 500
Approval of
35.00 transgenic
Bt cotton

30.00 400

INDIA - 25.00 Beginning

TECHNOLOGICAL of hybrid
INNOVATIONS IN COTTON 308 302 300
cotton era
278
20.00 267

15.00 200

169
151
10.00 134 127
99 100

5.00

- 1950-51 1960-61 1970-71 1971-72 1980-81 1990-91 2000-01 2001-02 2002-03 2007-08 2008-09 2013-14 2016-17 2017-18
0

Area In Million hectares Production In Million bales (170 Kgs)

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Yield kgs per hectare
 INIATIVES TO ENHANCE PRODUTION & YIELD

 Improve seed quality

 Introduce latest farming and picking practices
 Reduce contamination and improve cotton quality
COTTON  Production of long staple cotton; resulting minimal reliance on
imported cotton and enhanced overall exports

It is essential to increase the cotton production /

availability from 8.6 Million Bales to 20 Million bales
within 5 years

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 MMF - GLOBAL TRENDS
 World trade is rapidly shifting from cotton to manmade fibres
 Globally, use of man-made / synthetic fibres against natural fibres has shifted to a
ratio of 70:30, with synthetic fibres having the main share
 Pakistan’s consumption ratio of MMF to cotton is 30:70
 Currently there is 7% customs duty on the import of polyester staple fibre with total
MAN MADE import expenses ranging up to 20% including antidumping duty
FIBRES (MMF)  Pakistan should shift focus from cotton to Man Made Fibres (MMF) and
FILAMENT FIBRES
target fibre mix of 50:50

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SOCIO-ECONOMIC
SIGNIFICANCE OF
TEXTILE
INDUSTRY

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 GLOBAL TEXTILE EXPORTS - 2018 ($
$350 Billion) Global market for textile
$302
$300 exports is dominated by
$250 $227 China, having 32% share of
$200 textile exports that amounts
$150 to $ 302 billion.
$99
$100
Presently, Pakistan’s Share is
$50 $42 $33 $33 $25 $25 $25 $13 only 1.6% in the global textile
GLOBAL TEXTILE
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TEXTILE EXPORTS
TEXTILE EXPORTS ($ Billion)
Pakistan’s Share in 45
40 Growth Value
Global Textile Trade 35
Countries
(2009-18) (2018-19)
In Billion Dollars

30
China 65% 302.42
25
20 Bangladesh 201% 40.96
15 India 69% 37.12
10
Vietnam 252% 36.68
5
0 Pakistan 41% 13.57
2002 2004 2006 2008 2010 2012 2014 2016 2018
Cambodia 434% 13.1
13 BANGLADESH COMBODIA INDIA PAKISTAN VIETNAM
 Strengths
• Complete Textile Value Chain
STRENGTHS & • Technical & Entrepreneurial
OPPORTUNITIES Expertise
• Compliant Factories
• Young Labor Force
• Captive Energy Generation
Internal Challenges
• Energy affordability
• Current account deficit
• Shortage of raw materials
• Credit availability
INTERNAL & EXTERNAL
• Lack of institutional
CHALLENGES support
• Infrastructural constraints
(Integrated Textile Parks)
• Common influent treatment
plants
• Skill development institutes
• Volatile exchange rate
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Opportunities
• CPEC Investment Corridor
• Regional Textile Production-
Consumption Hub
• FTA 2nd phase with China
• EU GSP+ until 2023
• Growing Domestic Market
External Challenges
• Perception Management
• Market Access/ ASEAN, USA,
Japan, Australia
• GSP plus status continuation
• Sustainable Supply Chain
• BCI Cotton
• ZDHC
• Carbon /water foot prints
reduction
• Social standards compliance
• Compliances linked with SDGs
& WTO rules
 Articles of Apparel and Clothing Accessories is the leading
textile export USD 452.4 Billion
Articles of apparel and clothing accessories, not knitted or crocheted 227.1

Articles of apparel and clothing accessories, knitted or crocheted 225.3

Other made-up textile articles; sets; worn clothing and worn textile articles; rags 63.5

Cotton 56.9
TEXTILE & CLOTHING Man-made filaments; strip and the like of man-made textile materials 46.7
PRODUCTS TRADE
Man-made staple fibres 36.1

Knitted or crocheted fabrics 35.1

Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cables and articles 25.3

Impregnated, coated, covered or laminated textile fabrics; 25.2

Carpets and other textile floor coverings 15.9

Wool, fine or coarse animal hair; horsehair yarn and woven fabric 13.2
Special woven fabrics; tufted textile fabrics; lace; tapestries; trimmings; embroidery 12.4
Other vegetable textile fibres; paper yarn and woven fabrics of paper yarn 4.3

15 Silk 2.1
 EU and USA are the largest markets of textile of USD 373 Billion

EU 28 258.6

USA 114.1

TOP TEXTILE & Japan 35.1

CLOTHING MARKETS
United Kingdom 31.9

China 31.1

Hong Kong 18.8

Vietnam 17.7

South Korea 14.5

Canada 13.9
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 China (33%) is the leading exporter of textiles in World followed b
India (4.7%) & Bangladesh (4.6%). Pakistan’s share is only 1.7%
India 37.2
Bangladesh 37.0
Germany 35.8
Italy 33.9
TEXTILE EXPORTING Vietnam 31.7
PLAYERS Turkey 26.8
USA 25.9
Hong Kong 21.3
Spain 18.6
France 15.8
Belgium 15.0 China Textile Export
USD 257 Billion
Netherlands 13.3 33% of World Textile Exports
South Korea 13.3
Pakistan 13.0

17 Indonesia 12.5
 Pakistan’s Apparel exports have grown at a slower rate than
regional average

APPAREL EXPORTING
PLAYER AND GROWTH
TRAJECTORY

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 Raw Materials
• Vertical & Horizontal increase in production of cotton.
• Provide Polyester Staple Fiber without incidentals, duties & taxes.
Energy
• Long term uniform & internationally competitive energy prices
across the country for exporting industry
Liquidity
• Liquidate all textile Industry refunds of sale tax, income tax, policy
& package initiatives.
• Provide ERF to all exports including yarn & greige fabric.
Investment
ENABLERS • Allow LTFF to indirect exports & enhance credit limit for
investment under LTFF to Rs. 3 billion per project.
• Industrial Credit allocation policy of SBP be reintroduced.
• Fast Track establishment of Integrated Textile & Apparel Parks
enabling plug & play facilities for local and foreign investors.
• Special task force on revival of closed mills.
Market
• Market Promotion measures for attracting international brands and
retail chains of Europe & USA.
• Drawback of local taxes & levies to zero rate export (long term
schemes).
Long Term Textile Policy
• Most importantly a Long Term Textile Policy
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THANK YOU