July 29, 2003	Tuesday	Jumadi-ul-Awwal 28, 1424

KARACHI, July 28: Total investment in textile industry during the last four years is now being estimated at $3 to $4 billion that has led to improvement in productivity, both in terms of quality and quantity, in yarn, fabrics, home textiles and garments, besides generating more than 300,000 new jobs.

The Textile Commissioner’s office has estimated total investment at over $4 billion in the textile industry during 1999-2003. This includes $1.60 billion in foreign currency being the cost of imported machinery and equipment. Another $700 million investment is in infrastructure and $1.7 billion in acquisition of equipments and parts from domestic engineering industry.

Two top leaders of business community — Riaz Tata, president of the Federation of Pakistan Chambers of Commerce and Industry and Aziz Memon, chairman of the Textile Quota Advisory Council — put a safe investment estimate at $3 billion plus in the textile industry during the last four years.

Their estimate is that local currency investment for civil and engineering works in installation of imported equipment and machinery matches the import amount. “An import of $1.6 billion worth of machinery means involvement of local funds of the same amount for civil and engineering works,” Aziz Memon believes, and, therefore, the total investment in modernization and balancing of the textile industry is anywhere up to $3.2 billion.

Shabbir Ahmad, a top bedwear exporter who has recently entered into a joint venture agreement with a well-known French concern, endorses $4 billion plus investment. He said bulk of the investment had come in spinning which is pretty a capital intensive and, therefore, $4 billion investment should not be considered a far fetched figure.

A very big segment of the domestic engineering industry is in informal sector and its services and goods are difficult to quantify. Officials believe that actual cost of goods and services given by the domestic engineering industry in balancing and modernization of the textile industry may be even much more than being estimated.

An interesting aspect of this new investment in the textile industry is that a few businessmen have imported Indian made machinery and equipment through Dubai, Singapore and Hong Kong.

Official estimate depicts that out of $4 billion investment, a sum of $1.83 billion has come in spinning that includes $864 million in import of machinery, $370 million in development of infrastructure and $600 million worth of machinery and equipment from domestic engineering industry.

Weaving sector has received $722 million, processing $724 million, knitting $173 million, garments $100 million and synthetic $450 million.

Spinning is the most capital intensive segment of the textile Investment in textile touches sector, but value added sectors — home textiles and garments — require relatively less capital investment, but they create more jobs.

With an officially estimated investment of $100 million in the last four years, garments is said to have created about 150,000 new jobs. Spinning claimed bulk of the $4 billion investment ($1.83 billion), but could create only 50,000 new jobs.

Bedwear is reported to have created 50,000 new jobs, weaving 46,000, processing 6,000, hosiery 5,000, embroidery 3,000, towel 3,000 and synthetic textile 2,000 new jobs.

All this huge investment of $3 to $4 billion (Rs170 to Rs220 billion) in the last four years has pushed up total exports of textile products from $5.9 billion to $7.17 billion.

There is now a marked shift to value addition and the share of garments and made-ups has increased from 47 per cent to 58 per cent. Simultaneously, the share of yarn and fabrics in exports has fallen from 53 per cent to 42 per cent.

“This shift in the textile export structure is a clear manifestation of creation of more jobs because share of value added products has increased appreciably,” Textile Commissioner Mohammad Idress said.

His estimates that yarn production has increased by 14 per cent, fabrics by 26 per cent and synthetic fibres by 45 per cent.

Pakistan’s textile industry has moved far ahead in the last four years but “has not reached the shore” to quote Aziz Memon who believes that still a lot more has to be done to outdo neighbouring countries in the textile market.

Mohammad Idress says that processing and synthetic segments are weak spots in Pakistan’s textile industry.

Shabbir Ahmad says that processing and printing demands much more improvement and investment to remain competitive in the market.

“But investment and improvement in the textile industry have not come to an end,” Aziz Memon remarked. He said that efforts were still on to further improve the textile industry.

Market circles say that there are about 20 textile groups who are sound and conscious of the demands of export market. They have made bulk of the investment in the last four years and still engage in doing so.

“They will stay in the business and even progress after 2005,” Aziz Memon confidently says.

There are 500 others who want to do a lot but are handicapped because of resource constraints. They need advice to get together — as many as of them get together — and pool their resources after exploring the areas of their respective business and identifying avenues. “Getting together for a constructive cause, even for making money, is the most difficult thing to do in Pakistan,” a well-known textile dealer remarked jokingly.