September 13, 2002	Friday	Rajab 5, 1423

KARACHI, Sept 12: Pakistan Leather Garments Manufacturers & Exporters Association (PLGMEA) has urged the governor State Bank to freeze the mark up of export refinance (part I & II) for leather garment exports.

In a statement issued to the press on Thursday, the chairman PLGMEA Fawad Ijaz Khan drew the attention of the governor towards high cost of manufacturing of leather garments.

He said many traditional buyers of leather garments have changed their supply source because of high prices compared to China and other competitors.

Therefore, Fawad Ijaz said, it has become very important for the leather garments industry to reduce its cost. The mark-up on export refinance is the second biggest expense in total cots after salaries and wages for many leather garment exporters, he added.

Due to high cost, he said exports of leather garments from Pakistan registered a steep decline of over 25 per cent over the last 11 months from October 2001 to August 2002 ($256 million) as compared to the corresponding 11 months from October 2000 to August 2001 ($345 million).

Similarly, he said the decline in exports during July-August this year is over 36 per cent as compared to the corresponding period of last year. The decline in exports during August 2002 is 50 per cent over August 2001.

The PLGMEA chairman said that many exporters of leather garments are facing severe liquidity crunch because major part of their cash flow is tied up in payment of mark up to the banks.

He further said that many garment manufacturing units have laid off workers during the last two months and many more workers will lose their jobs in the future.

PLGMEA held different meetings with the ministers of finance and commerce as well as chairman, EPB to discuss the problems faced by leather garment industry.

These meetings did not yield any results.

Fawad said that situation has deteriorated further since July this year due to slashing the duty drawback rates to 3.88 per cent from 10.80 per cent.

The PLGMEA delegation recently met Dr Ishrat Hussain, governor SBP to discuss their banking problems.