January 1, 2003	Wednesday	Shawwal 27, 1423

KARACHI, Dec 30: Despite the banking sector not forthcoming with its share of financing in the textile industry, the entrepreneurs over the past three years invested around $1.4 billion for the upgradation and expansion of their production lines to face the upcoming global challenges of quota-free trade by the year 2005.

As a part of long term strategic plan for the textile industry (Textile Vision 2005) an investment of Rs333 billion ($6 billion) was proposed for BMR of the textile industry. Of this investment, at least 60 per cent was expected to be financed by the banks. Unfortunately, the banking sector did not come with its share of financing and the industry has to make the entire BMR funding from its own resources.

The approach adopted by the industry in its endeavour to face the challenges of the free trade was appreciated as it shows that the textile industry, which, once fully depended on official patronage, is now fast moving towards self-reliance in terms of funding and planning.

Had the banking sector felt its responsibility towards economic prosperity of the country and contributed its share towards BMR of the largest and most significant industrial sector of the country the situation would have been much better both in terms of foreign exchange earnings and employment.

Nevertheless, since last three years, the textile industry has made significant investments in expansion and BMR and it is heartening to note that all the investment had been in production of value-added textile products for exports.

Looking at the investment outlays put in the Textile Vision 2005, there are wide investment gaps in each segment of the industry, which must be filled in before the free quota regime of WTO begins in the year 2005.

The industry imported $405 million worth of machinery in 2001- 02 and $370 million in 2000-01. The industry spent over Rs50 billion on the expansion of their units in the last two year. Out of this, an investment of Rs23.027 billion went in spinning sector, Rs5.266 billion in weaving, Rs4.411 billion in polyester fibre, Rs3.367 billion in knitting and garment sector.

The spinning sector witnessed boom in the last three years and the industry invested in new equipment. Besides revival of 150,000 spindles, more than 440,000 spindles had also been added to the capacity during the last three years. This has resulted in increased demand for raw cotton and polyester staple fibers.

However, it is being estimated that the spinning sector would still need an additional investment of Rs10 billion for BMR during the next three years for producing superior quality yarn.

The textile vision 2005 announced in 2000, by the minister for commerce envisaged an increase in textile exports from $5 billion to $13 billion by the year 2005, under a planned development and investment strategy.

After suffering stagnation for five years, textile exports started improving, especially the value-added products performed well in the export markets in spite of lower demand and depressed prices in the world market.

The textile industry would not be wrong in claiming that it is the only sector in the country where investment had been substantial and regular during the past three years. The most encouraging aspect of this investment is diversity.

The entrepreneurs, who earlier concentrated on spinning and weaving, have now established compact units adding state-of-the- art finishing units and knitting machines to add value to their products.

The last three years investment is aimed at improving quality of products, fetching better export price and improving efficiency of the mills in order to compete in the world markets with rivals like India, China and Japan.

The export competitiveness of the textile industry can be further improved by aggressive marketing techniques and quality improvements, which have to be taken care of at micro-level that is each textile unit should make its own independent efforts to sell its products in different world markets. Therefore, all the individual textile units should implement the ISO 9001 programme for quality standard and ISO 14000 for environmental standards to counter the threat of globalization.

In order to keep the textile industry competitive in the world market it is imperative that there should be consistency in policies, a separate ministry for textile be set-up, strategic long term plan be evolved and incentives for value addition be allowed.

The textile industry has a major role in the economic development of the country as it has an edge over other industries in indigenous raw material (Pakistan is fourth largest cotton producer) of reasonable quality and a large labour force with one of the lowest wages in the world.

The incumbent chairman of Aptma Anjum M Saleem on one of the occasions said: “Despite obstacles, adversaries, ordeals and setbacks, the potential available points to a great future for the textile industry of the country, if only facilitating policies and environment is provided to the industry. On the part of the textile industry, I assure you that the Pakistani textile entrepreneurs will do their utmost to promote economic prosperity of the country.”