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| Issue date:12/04/2010 |
| ATA Journal for Asia on Textile & Apparel - Apr 2010 Issue |
| Source:Journal for Asia on Textile & Apparel |
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Southeast Asia
Thailand
Expecting positive growths
Thailand earned US$17.628 billion from fashion exports in 2009, a moderate increase of 2.24% from 2008, according to the country’s Department of Export Promotion (DEP). Of which, US$6.443 billion (-10.5%) came from the textile sector; US$2.961 billion from apparel (-15.53%); US$1.422 billion from leather goods, travel kits and shoes (-19.7%); and US$9,761 billion from gems and jewelry (+18%).
Following an export slowdown in 2009 due to global economic downturn, Srirat Rastapana, Director General of DEP at Ministry of Commerce of Thailand, expected recovery this year.
Fashion exports for 2010 are projected at US$20.315-20.999 billion, or a 9-13% growth. The textile sector is expected to earn US$7.058-7.205 billion, up 10-12% from 2009. Apparel exports are estimated to grow 10-15% to US$3.238-3.386 billion, while export of fabrics and yarns is likely to make a 10% improvement, or US$3.819 billion. For leather goods, the export value is forecast to grow 0.98% to US$1.429 billion. Export of gems and jewelry is expected to increase by 10-15% to US$11.826-12.364 billion, with reference to DEP’s projections.
A major contribution to this positive growth figure is that the government and private sectors are joining forces to extend competitive advantages and promote sustainable development in the Thai fashion industry on its course to stand out as ASEAN’s fashion center, said Mrs Srirat.
Vietnam
inatex to invest US$58.5 million for technology upgrade
The Vietnamese textile and apparel industry is estimated to invest VND1,100 billion (or US$58.5 million) in 2010 to increase productivity and improve technologies of the industry, according to the Vietnam National Textile and Garment Group (Vinatex).
Vinatex’s president, Le Quoc An, said that the investment would help the industry reach its export turnover target of US$10.5 billion and an annual industrial production value growth of 12% for this year.
Vinatex is the biggest textile enterprise and investor in the country. It announced a plan to establish two new textile-specific industrial zones in the fiscal year of 2010.
These two industrial zones, in the provinces of Thai Binh (north) and Tra Vinh (south), will be jointly invested by both local and foreign entrepreneurs and equiped with advanced solid-waste and wastewater treatment systems.
“Each industrial zone is planned to have a 150-ha land area with initial infrastructure investment cost of US$20/m2 and an estimated production of at least 200 million square meters of fabric per year,” said Vu Duc Giang, General Director of the Vinatex. Prior to this, the enterprise had invested in the construction of five industrial zones specially engineered for textile and apparel production. A range of textile manufacturing activities from knitting, dyeing to garment-sewing are present in these integrated industrial zones.
In addition, due to heavy reliance on foreign fabrics and fibers, Vietnam is aware of further development of local fabric supply. The government was outlining a master plan for cotton development, according to Vinatex.
The Vietnam Textile and Apparel Association (Vitas) reported that the country’s textile and apparel industry annually needs about two billion square meters of fabrics. The local supply at 700 million m2 fabric/year meets about 35% of the demand in the country. The shortage has been met by imports from the Asian region, such as China, Korea, Japan, India, Taiwan and other southeast Asian countries. Consequently, the Vietnamese textile and apparel industry can be considerably impacted by international market prices of textiles and related raw materials.
Investor from China to expand spinning capacity in Vietnam
Vietnam’s cheaper production cost attracted Chinese investors to shift their production facility to Southeast Asia. A large Shanghai-based fabric supplier, Texhong Textile Group, planned to invest US$100 million for a new yarn plant in the northern province of Quang Ninh after the president, Hong Tianzhu, held an official meeting with the provincial government this January.
The new plant is designed to have a production capacity of 200,000 spindles. Cotton used for the manufacture in the plant will be imported, according to Texhong.
Texhong Vietnam Textile JSC, a subsidy of Texhong operates a US$100 million of 210,000 spindles and 10 sets of vortex spinning in Dong Nai province, located in southeastern Vietnam.
First eco-tannery plant opens
ISA Tan Tec Leather Limited opened its tannery plant early this year in the Viet Huong II industrial zone, which is situated in Binh Duong province, South Vietnam.
Based in Ho Chi Minh City, ISA Tan Tec Leather Limited is a subsidy of Sino-German leather manufacturer ISA Tan Tec. With an investment of US$12 million, the new plant is the first ecological tannery facility in Vietnam as well as the second one of ISA Tan Tec worldwide after the first being in China.
The new plant in Vietnam was expected to employ some 300 workers with an annual capacity of two million square meters of high-quality leather, the company said. Its products would be exported to regional countries and supply for local shoemakers, processing for international shoes brands including Timberland, Rockport, Merrell, New Balance and Hush Puppies, it added.
East Asia
China
Textiles, garments exports rise in January
China’s textiles and garments exports reached US$15.57 billion in the first month of 2010, up 2.2% compared to January 2009, according to the Chinese customs office.
Exports of textile products surged 18.2% from a year ago to US$5.58 billion, while that of garments and accessories fell 5% to US$9.99 billion. Shoes exports rose to US$2.93 billion, increasing 1.4% year-on-year.
Chinese textile and apparel exports grew 4.48% in December 2009, with exports to the US increasing 27% compared with the same period of the previous year.
Exports to Australia down 7.36% last year
China’s textile and apparel exports to Australia were US$3.058 billion, down 7.36% year-on-year in 2009, based on the Chinese customs statistics.
Value of textiles exported to Australia was US$791 million, decreasing 6.81% from a year ago, while that of apparel exported to Australia was US$2.267 billion, representing a 7.56% decline.
The total export value of Chinese textiles and apparel dropped in 2009 as a result of the global financial crisis and weak international demand.
China’s textile and apparel imports from Australia were US$23 million last year, sliding 28.65% y-o-y. Textile imports from Australia were US$22 million in 2009, down 29.85%, whereas apparel imports were US$1 million, up 27.94% from the previous year.
South Asia
India
Man-made textile exports to double
The Synthetic and Rayon Textile Export Promotion Council (SRTEPC) targeted to more than double the Indian export of man-made textiles.
G.K. Gupta, Chairman of the SRTEPC, said the global man-made fibre (MMF) trade accounts for 60% of total trade in textiles, and India accounts for less than 3% at Rs 15,767 crore (US$3.42 billion).
“Our target is to increase exports to US$6.2 billion by capturing 4% of market share by 2011-12,” he said at the “Source India 2010”, a two-day trade exhibition in Mumbai, India held in January. He added that the SRTEPC planned to attract more buyers, especially from the Gulf region and Africa.
The Middle East accounts for 32% of India’s total man-made fibre exports, followed by Europe 21%, the US 16% and Africa 15%. Total exports of MMF textiles between April and October 2009 were at Rs 10,124 crore, compared to Rs 8,186 crore in the same period of the previous year, registering a growth of 24%.
Among the Gulf countries, the United Arab Emirates (UAE) is a leading importer of Indian MMF textiles worth about Rs 2,441 crore, according to the SRTEPC. The UAE is also an important market for re-export in the Middle East, the Commonwealth of Independent States (CIS) and North Africa. In addition to the UAE, leading markets in the Middle East include Turkey, Saudi Arabia, Syria, Iran, Israel, Kuwait, Oman, Bahrain, Jordan, Lebanon, Qatar, Iraq and Yemen.
Bangladesh seeks closer ties with India
A 12-member delegation from Bangladesh met officials of India’s Apparel Export Promotion Council (AEPC) to explore the possibility of entering Indian apparel market.
The delegation included two members of Parliament and senior representatives of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and the Bangladesh Textile Mills Association (BTMA).
Siddiqur Rahman, vice-president (finance) of the BGMEA, said Bangladeshi manufacturers are keen to have a 10% share of India’s growing domestic apparel market. This will increase Bangladesh’s US$10.9 billion annual apparel exports by another US$2 billion. Quoting a survey by US-based retailer Wal-Mart, he said that an average middle-class Indian spends about Rs 2,500 a year on apparel. Delegates from Bangladesh also showed interest in India’s single count yarns, while they believed India needs Bangladeshi support to meet demands in the booming Indian apparel sector. India has a raw material supply and good design capabilities, and Bangladesh has the advantage of cheap labor and is strong in knitwear production, the delegates explained.
Pakistan
German assistance
A 10-member Pakistani delegation visited Germany early this year. Dr Christian Brecht, Consul General of the Federal Republic of Germany, believed that Pakistani textile sector can benefit greatly through interacting with German organisations possessing specialised expertise and technological know-how of the textile industry.
Dr Brecht said Germany is exploring ways and means on how it can help Pakistan’s textile industry. Delegates from Pakistan included two representatives each from five major textile associations. The nine-day visit was a study tour on management of business associations and cleaner production in the textile industry and was part of a project funded by the German Ministry of Economic Co-operation and Development.
The objective is to equip Pakistan’s textile industry with techniques enabling them to work economically, more efficiently and in an ecologically sustainable manner. Additionally, the delegation visited a warp knitting machinery builder, Liba, and learned about latest textile innovations.
>Promoting R&D
The Ministry of Textile in Pakistan disbursed Rs1 billion among 200 registered enterprises in the country with fully verified certifications were endorsed for research and development (R&D) claims. The government was estimated to earmark approximately Rs5.6 billion for R&D claims.
To claim R&D dues, it is mandatory for textile enterprises to register with the Ministry of Textile. The Ministry has a three-tier scrutiny system for verification including that from the related associations. About 7,000 enterprises had submitted their requests; 600 of them were issued provisional certificates for further procedures.
Bangladesh
Deal for eco-compliance
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the Bangladesh Export-Oriented Garments Washing Industries Owners Association (BEOGWIOA) and the South Asia Enterprise Development Facility (SEDF) entered into a tripartite agreement to improve environmental compliance in the textile and apparel sector.
This SEDF-BGMEA-BEOGWIOA programme aims to promote cleaner production methods in the sector. The SEDF will develop the capacity of the associations to monitor and provide advisory services to their members on issues of environmental compliances. “This represents a big step forward. We are committed to work together to promote environmental compliance standards in the industry so as to ensure its long-term sustainability,” said Abdus Salam Murshedy, BGMEA president.
BEOGWIOA president, Shafiqur Rahman, added that the project would provide assistance to the washing, dyeing and finishing industry to reduce cost of operations, and also make the industry environmentally compliant.
Yarn producers optimistic on 2010
Bangladeshi textile yarn manufacturers began to move away from dark clouds of the global economic downturn. In the first few months of 2010, domestic yarn spinners experienced a pick-up, largely due to the government’s restrictions on yarn import through the Benapole port.
“We are now close to a happy ending of what was initially a very difficult year for the country’s yarn spinners,” said Masudur Rahman, executive director, Delta Spinners Ltd, one of the country’s leading listed spinning manufacturers.
Mr Rahman said that cheap cotton prices in the international market had also helped, as they sought to ramp up production to recoup the losses incurred by the end of 2009.
“Almost every manufacturer I talked to is expecting a rise in profits and annual turnover. Many are trying to expand the production to bring down overhead cost and be as competitive as their Indian counterparts,” he said. Delta Spinners announced to modernize, renovate and expand the existing spinning facilities.
Another listed textile company Metro Spinning, a member company of Maksons Group, also planned to set up an export-oriented composite textile unit, a forward linkage for the yarn maker, according to Mohd Mohsin Adnan, executive director of Metro Spinning. The company struggled to sell its yarn to local apparel makers in the past few months and saw its inventory piling up in the warehouse. It prompted the company to establish its own composite knitting plant for a stable demand of its yarn supply. The new plant is expected to operate by September 2010, producing 8.7 million yards of finished fabrics a year.
Mr Adnan believed that Bangladeshi apparel exports would pick up fast from 2008-09, as its competitors including China face higher labor cost.
Masud Advani, chairman of ACS Textile, commented that Bangladesh and other Asian countries are chosen for low-cost apparel partly due to China’s gradual withdrawal from low-cost apparel manufacturing. ACS Textile is a British-invested supplier of quality home textiles in Bangladesh.
Italy helps upgrade Bangladeshi and Iranian textile making
The Association of Italian Textile Machinery Manufacturers (ACIMIT) and the
Italian Trade Commission held a technological seminar in Dhaka, Bangladesh, this March.
Led by ACIMIT President Sandro Salmoiraghi, the delegation presented latest textile machinery technologies, with which the Bangladeshi textile operators can improve the competitiveness. Participating Italian companies included Bellini, Comez, Danti, Fadis, Jaeggli, Marzoli, Obem, Pentek, Plm, Reggiani, Roj, Salmoiraghi, Santoni, Savio and Unitech.
The upgrading of installed equipments is considered by Bangladeshi companies necessary for enhancing their competitiveness, the ACIMIT said. Hence, Bangladeshi companies had invested in foreign textile technology in the past five years, including that of Italian textile machinery. Imports of Italian textile machinery grew at an annual rate of 17% between 2004 and 2008.
Italian textile machinery sales to Bangladesh rose to 41 million euros in 2008 from 31 million euros in the previous year, confirming Bangladesh as the third leading Asian market behind only China and India. Italian manufacturers delivered technology to Bangladesh’s market worth around 18 million euros in the first nine months of 2009, including finishing machinery (58% of the total), spinning machines (17%), weaving machines (14%), accessories (10%) and knitting machines (1%).
In addition, Iran was the fifth largest market in Asia for Italy’s textile machinery industry. The sales of Italian textile machinery to Iran amounted to 16 million euros in the first nine months of 2009. In recent years, more Iranian manufacturers invested in advanced finishing machinery. About 46% of Italian textile machinery sold to Iran was used in the finishing sector between January and September 2009, ACIMIT observes.
The growing interest of Iranian companies for Italian finishing machinery prompted ACIMIT (Association of Italian Textile Machinery Manufacturers) and ICE (Italian Trade Commission), in partnership with the Iranian Textile Association, to conduct a technology check-up with Iranian manufacturers. The check-up was made by an Italian expert in the sector visiting 10 Iranian textile manufacturers in the second half of 2009. Visited companies were given data outlining an overview of their existing situation and possible technology solutions, according to ACIMIT.
Sri Lanka
EU temporarily withdraws GSP+ trade benefits from Sri Lanka
EU Member States announced this February to withdraw preferential tariff benefits to Sri Lanka under a special incentive arrangement for sustainable development and good governance, known as GSP+. The decision follows an exhaustive investigation by the European Commission, which identified significant shortcomings in respect of Sri Lanka’s implementation of three UN human rights conventions relevant for benefits under the scheme.
The suspension of GSP+ benefits is temporary, as the overarching EU objective remains to use GSP+ as an incentive to underpin improvements in the human rights situation in Sri Lanka. The suspension will only take effect in six months time, giving Sri Lanka extra time to address the problems identified.
EU Trade Commissioner Karel De Gucht stated, “I would like to emphasise that I hope Sri Lanka will sit with us over the next six months in order to agree upon a set of measures that will result in rapid, demonstrable and sustainable progress in relation to the human rights shortcomings we have identified.”
The EU remains open to a full dialogue with the government of Sri Lanka, above all to encourage it to take the necessary steps towards an effective implementation of GSP+-relevant human rights conventions. The temporary withdrawal takes effect six months. At that time, Sri Lankan exports would revert to standard GSP preferences as provided for in the current GSP Regulation (732/08). These preferences are still more generous for key Sri Lankan exports such as clothing than those provided by other major developed countries, according to the EU.
Latin America
Brazil
Fast-growth of Brazil’s technical textile and nonwovens market
Technical textiles and nonwovens sectors in Brazil are developing at a fast pace, and more local textile manufacturers targeted the two sectors, ACIMIT observed.
According to a recent survey conducted by IEMI, a Brazilian consulting firm, the two sectors (nonwovens and technical textiles) account for well over 200 companies currently operating in Brazil, employing roughly 40,000 people. Total production amounted to about 462,000 tons at 3.9 billion Brazilian Reais in 2008. In the same year, over 160 million Reais were invested in modernizing and/or acquiring new machinery (a value of about 4% of annual revenues). Exports of products for these two sectors in 2008 totaled US$269 million. Between January to September 2009, Italian exports to Brazil amounted to 23 million euros. Italian machinery most in demand in the Brazilian market are finishing machinery (32%), followed by accessories (26%) and knitting machines (21%), according to ACIMIT.
Indian textile sector seeks US$24 billion investment by 2015 Indian Textile Minister Dayanidhi Maran made a strong pitch for India’s textile sector during his tour of a number of European countries in the first week of February 2010, and urged investors to tap business opportunities unfolding in India’s huge textile market.
Accompanied by a large delegation of senior officials of India’s textile ministry, representatives of textile industry and trade and industry groups, Mr Maran said that the Indian Government was looking favourably at foreign investments to prop up textile manufacturing in India.
The minister pointed out that even in 2009, which was considered a crisis year, India achieved an economic growth of about 8%, fuelled by rising domestic demand. “The textile industry benefited from this economic growth,” he said.
With more than half of India’s population under 25 years, there will be a growing demand for textiles and apparel as this young generation acquire greater earning capacity and a taste for upper-end textiles, he believed.
India’s textile and apparel exports were negatively impacted by the recession in major markets such as the US and Europe. The Indian government is thus keen to improve the international competitiveness of India’s textile industry by attracting investments and high technology.
According to the Indian Textile Ministry, a major overhaul of the industry is needed, entailing extensive investments for modernization and increased productivity.
The ministry estimates that an investment volume of US$ 24 billion will be needed by 2015. To attract greater investments in the textile sector, India is further liberalizing its economy and hopes to get a quarter of such investments through foreign direct investment (FDI), according to Mr Maran.
He drew attention to the setting up of a simplified one-stop investment window, the “automatic route”, to facilitate the entry of foreign investors in India whose textile and apparel market was worth some US$ 40 billion in the fiscal year of 2008/09, a 14% growth over the previous year.
Mr Maran maintained that India has a firm intellectual property rights (IPR) regime in place. He said: “Foreign investors have adequate protection against piracy in India and can resort to our local judiciary for redressing any complaints.”
Nevertheless, some overseas textile companies are worried by India’s infrastructure, which is considered relatively inadequate for distribution of textile products, along with the slow bureaucracy. “The Indian bureaucracy has changed and is now a facilitator. Our infrastructure may have been inadequate in the past but it is progressing rapidly,” said Mr Maran.
Technical textile market potential untapped
Realizing that technical textiles are a domain of German textile manufactures, Mr Maran spoke of the business potential inherent in India’s technical textiles.
“The market for technical textiles is presently worth US$ 7.5 billion and is expected to grow annually by 11% in the next five years, rising to US$ 14.3 billion by 2012/13.” Demand for packaging materials had a strong growth, generating demand for technical textiles. Another growth engine is India’s automobile industry, which is showing a large appetite for technical textiles, he added.
In addition, the Indian Government launched a number of supportive programmes to promote the textile and clothing sector.
A Technology Upgradation Funds Scheme (TUFS) promotes investments in the modernization of production capacities. The Indian authorities provide financial assistance by taking over 5% of the interest for banking credits used for modernization of textile factories and installation of new machines. The government, according to the minister, is willing to provide greater assistance if investments are designated for innovative segments such as that of technical textiles.
The government also created a Scheme for Integrated Textile Parks (SITP), which is built with infrastructure especially for the textile industry.
Under the SITP, the government partners with the private sector by providing a 40% participation in the park’s infrastructure costs when private textile entrepreneurs invest there for production. The SITP can be set up in Special Economic Zones (SEZs) and new companies can enjoy a 10-year tax holiday, duty-free import of textile machinery and more.
Arvind Singhal, chairman of Technopak Advisors Private Limited, a management consultancy firm, said that, India’s growth is supported mainly by the domestic market. “Indeed, two-third of India’s GDP is accounted by domestic consumption,” said Mr Singhal, a member of Mr Maran’s delegation to Europe.
Womenswear in India has potential: consultant
Mr Singhal, an expert on Indian consumer behaviour, said that women’s clothing segment in India was largely untapped.
“The wardrobes of young Indian women are rapidly changing. Opportunities in India are available for manufacturers of women’s wear. Many Indian women still wear the traditional Indian clothes, but they are increasingly adding denim jeans and other western clothes to their wardrobes,” said Mr Singhal, adding that apparel and intimate wear for women are expected to grow dynamically in coming years.
India’s requirements of technical textiles (Individual segments in million US$) | 
Some apparel consumption in India in 2008 | 
India’s textile and apparel industry will need an investment of US$ 43 billion for various segments |
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Optimistic aura surrounding Asian textile producers by Manik Mehta in Frankfurt The gloom of the economic downturn, though slowing down, has not been completely stopped. Take the case of Germany’s textile industry. According to a December 2009 survey on the business climate conducted by the Confederation of the German Textile and Fashion Industry, textile sales had fallen by 20.6% on a year-on-year as of October 2009. Domestic textile production had dropped by 22% compared to the January-October 2008 period. Exports also fell by 14%.
Similarly, Italy and Spain also had their cup of misery full. However, in Turkey, whose textiles has traditionally been a main export driver, the effects of the crisis were less severe, according to the Istanbul Textile and Apparel Exporter Association. The textile sector was hit by weak exports, recording a 22% decline during the first eleven months of 2009.
With reference to the latest figures from the China National Textile and Apparel Council (CNTAC), China’s textile and clothing production increased 10% for the whole of 2009, showing a slower pace of growth. China’s textile and clothing exports fell by about 11% in the first 11 months of 2009, and the declining rate narrowed to over 9% for the whole year of 2009.
The situation in India is similar to China. The export-driven textile industry suffered from the lack of demand in the United States and Europe, which together account for some 60% of India’s textile exports. However, there were signs of recovery in the final quarter of 2009. Indian Textile Minister, Dayanidhi Maran, mentioned about investing US$22 billion for product innovations and securing new market segments in order to boost the country’s exports.
The economic pick-up will probably appear much earlier in Asia than in the US and Europe, as exhibitors at the recent Heimtextil fair were saying.
“China and India are extremely strong forces. China is booming and India is also on the rise. Production and exports of both countries are surging. I believe we will see a recovery in 2010 in the global textile sector. Of course, it is still going to be a tough process before the textile sector returns to its former glory though I do see the light at the end of the tunnel. Many of the exhibitors we talked to said that they had received more orders at this show than at the 2009 event,” said Detlef Braun, the managing director of the show organizing Messe Frankfurt GmbH.
India
Indian exhibitor Abishek Industries Ltd of Ludhiana, Punjab, a US$500 million turnover vertical company manufacturing terry towels, yarn and more appeared upbeat at the event. “We did lose some business in 2009 as a result of the economic crisis but that was expected. However, our business bounced back and we see here that the market is regaining its momentum. Our customers have given us a positive response in terms of business enquiries. We are also increasingly going to concentrate on India’s huge domestic market which is very promising for us,” said Sandeep Mittal, the company’s head of marketing.
Textile continued to be India’s main export item, and Germany is India’s leading market in the European Union, said Ajit Kumar, Indian consul general in Frankfurt. India’s textile exports to Germany in the first ten months of 2009 amounted to 1.1178 billion euros. “There is a large growth potential inherent in our textile exports to Germany,” he said.
Indonesia
P.T. Paberik Tekstil Kasrie Hendro Subekti, an Indonesian company manufacturing plain and jacquard textiles, has automated its production tools at its factory in Surabaya, Indonesia. The company, whose annual turnover is between US$12-15 million, with Scandinavia, Hungary, Russia and more being the main markets, said that its business had declined by 7% in 2009. “We feel that the decline has slowed down or even stopped in some product segments,” said Antonius S. Ayunguga, the company’s export manager.
Pakistan
Pakistan, which traditionally presents a large contingent of exhibitors, received numerous visitors. Faiza Jabeen, director (marketing) of Lahore-based Nishat Chunian Ltd, which manufactures a wide range of upper-end home textile products, claimed that her company is Pakistan’s fourth largest listed textile company. Nishat Chunian, according to Ms Jabeen, achieved a US$140 million turnover, with 80% of the turnover coming from exports. She mentioned that the company’s exports declined by 20% in 2009. However, “the key to maintaining our high exports is to provide innovative products, good designs and colours for both US and European buyers. I discern a rise in demand since April 2009 after going through initial uncertainties,” she said, adding that 2010 would turn out to be better than 2009.
Another Pakistani company called Gul Ahmed of Karachi, which manufactures bed-sheets and more, emphasized innovation. Zaki Bashir, the company’s director, predicted a “volatile time” ahead because of the rising costs of raw materials, energy, dyes and chemicals and more needed for textile manufacture. “I anticipate shortages of yarn and fabric, which will be a problem for some companies though not for us as we are a vertically manufacturing company,” he said. The company also eyes new markets in South America, China and Russia, Mr Bashir added.
This story follows ATA Journal’s Feature Story in Feb/Mar 2010 issue
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| Country Focus Pakistan urged to add value to products by Ajay Sinha and Staff Reporters
Pakistan has about 7.6% of spinning capacity in the Asian region and 5% share of the cotton yarn produced globally. It is the world’s fourth largest producer and the third largest consumer of cotton, according to Pegasus Consultancy, show organizer of the Megatech Pakistan 2010 exhibition held this March.
Internally, Pakistan’s textile industry contributes nearly 8.5% to the gross domestic product (GDP) while employing 39% of the total manufacturing workforce. The textile industry contributes over half to the country’s total exports with textile exports worth US$ 7.21 billion and garment exports worth US$ 3.25 billion in 2008.
However, the global economic recession, which decreased demand for goods and services worldwide, had negatively impacted on demand levels in developed countries, the markets for the majority of Pakistan’s exports. Pakistan’s exports for FY2008/09 relative to the previous year slid 6% (US$1.2 billion), shown by the data of Asian Development Bank (ADB). Pakistan’s fiscal year starts on July 1 until June 30 in the following calendar year.
The textile industry lost over 5% of its export earnings (US$578 million) in FY2008/09, with readymade garments the hardest hit (-18%, or $221 million), the ADB stated.
Development challenges
In a draft report jointly prepared by Asian Development Bank and government of Pakistan, Pakistan was found lacking innovation and product development in the textile and apparel sector. Textiles and apparel made in the country are mainly basic products with little added value.
It was observed that Pakistan specializes in the production and export of products at the lower end of the textile range, the ADB stated.
In addition, the report identified another two major disadvantages that hold back the development of the textile and apparel sector, which are labour productivity and relationship with customer, mainly overseas buyers.
The report cited the tariff issue as hindrance, but a secondary one, noting that its competitors have outperformed Pakistan in markets where there is tariff parity. Energy issues were found not a major obstruction as other countries also faced their own problem to supply electricity.
Further, some suggestions were outlined in the report. Pakistan should increase average value of export from US$1000 to US$2000 per bale of cotton by focusing on value-addition. Secondly, it should raise productivity by investing in management training and organizational efficiencies. Thirdly, the implementation of measures in National Textile Policy 2009 in regard to the apparel sector is crucial to promote the industrial development. Lastly, the country can consider developing strategic relationships with large retail or buying houses or develop a convenient sourcing platform for buyers from abroad. Furthermore, it should address the incoming and outgoing travel restrictions, which remain an essential component for facilitating customer relationship, the report stated.
Structure of Pakistani textile and apparel industry | 
Export performance among industries with significant declines in export earnings, FY2008/09 |
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Pakistani textile and apparel association desires GSP-plus status To make Pakistani textile and apparel manufacturing more competent, the All Pakistan Textile Mills Association hopes the country can be a GSP-plus beneficiary to help boost exports of its textiles and apparel products, reports Ajay Sinha
The textile industry of Pakistan contributes 8.5% of the GDP and about 55% of total exports from Pakistan, and there are a number of industry associations representing the interests of this business sector, including the All Pakistan Textile Mills Association (APTMA) and the Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA).
Founded in 1952, the APTMA is one of the largest trade associations in Pakistan actively involved in the policy-making decision by both the government of Pakistan and the Pakistani textile and apparel industry, according to Tariq Mehmood, Chairman of the All Pakistan Textile Mills Association (APTMA). The association represents about 396 textile mills out of which 315 are spinning, 44 weaving and 37 composite units.
APTMA advocates technological advances
Tariq Mehmood, Chairman of APTMA
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Improvement in technology is critical to the sustained development of the industry can be more advantageous in the global textile and apparel supply chain. Partly due to the APTMA’s efforts, the textile sector has invested about US$6 billion in modernization and higher value addition over the past six years, Mr Mehmood said.
However, “with the cost of doing business in the country is rising as a result of growing prices of cotton, utilities, inflation and bank refinancing rate on exports, the competitiveness of Pakistan is undermined and its share in the international market shrinking,” he said.
To maintain the competitiveness of Pakistan’s textile and apparel manufacturing, the association made efforts on training of talent. The APTMA helped set up and support two institutions, namely the National Textile University situated in Faisalabad and the Textile Institute of Pakistan in Karachi. It also contributes agricultural research on cultivating cotton.
In addition, the APTMA calls for financial support in technological upgrade in the industry, and more international market access for the country’s textile and apparel exports, e.g. via trade agreements with other sovereignties. Mr Mehmood added that the association is working on the issue of the Generalised System of Preferences (GSP)-plus status so that Pakistan-made textiles and apparel can enter the market of the European Union (EU) at zero or reduced tariff. If Pakistan can be a GSP-plus beneficiary, the country’s textiles and apparel can be marketed at a lower cost and thus gain more market share in the EU.
Internally, he was pleased with the recent National Textile policy, appreciating the efforts made by Rana Farook Saeed, the Federal Textile Minister; Dr Waqar Masood, Secretary at Ministry of Textile Industry; and their teams in ensuring a balanced relief to the entire value chain of Pakistan’s textile sector. Mr Mehmood added: “The long-awaited policy is well researched, outlining major challenges and appropriate measures for stabilisation, revival and growth of the textile industry of Pakistan. Remedial proposals cover various textile and apparel sub-sectors, whilst long-term policies are put into place through the creation of textile investment support and technology upgradation funds, for instance.”
The government of Pakistan last year unveiled a five-year National Textile Policy for 2009-2014, under which the government would take both immediate and long-term measures to support the country’s textile industry.
PRGMEA joins IAF to foster foreign trade
Another association, the Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA) is a representative trade body of manufactures and exporters of value-added readymade garments.
Established in 1980, the PRGMEA has more than 1,000 members in the nation, who contribute over US$ 1 billion in foreign exchange earning and employs directly 650,000 workers, said Mohsin Ayub Mirza, Chairman (Central region) of the PRGMEA. The association is recognized by the Government of Pakistan, as well as affiliated with the Federation of Pakistan Chambers of Commerce & Industry and the American Apparel & Footwear Association (AAFA).
This January, the PRGMEA joined the International Apparel Federation (IAF). Mr Mirza said that becoming the member of a prestigious body like IAF would help Pakistani apparel industry and exporters to establish worldwide business contacts which foster dialogue and knowledge sharing, exchange between individuals active in the world apparel value chain.
When talking about impediments to trade, Mr Mirza viewed that power shortage was an obstacle for domestic apparel makers to deliver foreign orders on time. He believed proper marketing strategy is needed to promote Pakistan-made textile and apparel exports and the government should consider setting up a professional body to take up this mission.
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| Copyright © Adsale Publishing Limited. Any party needs to reprint any part of the content should get the written approval from Adsale Publishing Ltd and quote the source "ATA Journal for Asia on Textile & Apparel", Adsale Textile English Website - www.AdsaleATA.com. We reserve the right to take legal action against any party who reprints any part of this article without acknowledgement. For enquiry, please contact Editorial Department. |
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| Copyright © Adsale Publishing Limited. Any party needs to reprint any part of the content should get the written approval from Adsale Publishing Ltd and quote the source "ATA Journal for Asia on Textile & Apparel", Adsale Textile English Website - www.AdsaleATA.com. We reserve the right to take legal action against any party who reprints any part of this article without acknowledgement. For enquiry, please contact Editorial Department. |
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