KARACHI: The marketing of Pakistani goods abroad, it seems, is more difficult than one may imagine. The job becomes all the more trick in absence of proper homework by the concerned departments or the private sector.
As the situation is not enviable stakeholders instead of suggesting solutions to the problem are still focussed on causative factors.
Both the Export Promotion Bureau and exporters were found trading blames when contacted to comment on the weaknesses of marketing strategy of Pakistan as compared to our competitors in the region. The exporters accuse the EPB of non-cooperation, while the EPB blame them for not improving the quality of their products.
The global textile trade of $400 billion is growing at three per cent annually can provide a lot of opportunities for Pakistan to increase its share in the global export of textiles. It is indeed sad that Pakistan lags far behind other competitive neighbouring countries in the field of marketing.
Majority of the exporters admit that they lack marketing management abilities required for aggressive market share enhancement and product and geographical diversification. It is essential that professional and financial help be provided by the government in partnership with the private sector for penetration into old and new markets. Based on an evaluation of the world demand of goods and services, the government must aim at prioritizing those areas where Pakistan has or can achieve a competitive edge.
The country needs to build the image of "Made-in Pakistan". It needs to improve production efficiency through increased automation, re-engineering of systems, backward and forward integration of operations, moving up the value chain, strategic collaboration with foreign firms, besides enhancing marketing capabilities.
"For Pakistan, with a share of textiles and clothing in total merchandise exports of approximately 70 per cent, the stakes are high. Studies undertaken by the US International Trade Commission and the World Bank predict that China will become a dominant producer, while Pakistan could emerge as a major supplier for a narrower range of goods. At the moment, the effect on Pakistani exports is difficult to quantify, as several key factors are not yet known. An important factor will be the way importing countries make use of the textile-specific safeguard provisions contained in China's WTO accession protocol," says Mohammad Sohail, head research at Invest Capital and Securities.
He says Pakistan has tried to prepare itself for the upcoming post-quota regime. A look at the textile machinery imports over the last four years (FY01-FY04) shows that Pakistan has imported $1.6bn worth of textile machinery in order to meet the upcoming requirements. Expansions have been undertaken all around in order to meet any eventuality of increased demand, and to be able to cater to huge orders from various locations. "During the past few years, Pakistan's focus has also shifted from the traditional Far Eastern markets to countries in Europe, Africa, South America, etc. This has not only allowed for new relationships to be cultivated, but also eased the progress from traditional yarn and fabric exports to focus on more value-added products, namely home textiles".
The higher production cost in Pakistan is a major hurdle in the way of marketing exportable goods in the world market, making products uncompetitive against the goods of regional countries. A World Bank study discloses that in China power rates are zero per cent, in India 0.9 cents per unit, while in Pakistan they are 8.3 cents per unit. It can be imagined the rise in cost of a product in Pakistan as compared with other countries.
What is the EPB doing on the marketing side? "We are presently working on the supply side. Capacity of the textile sector is being broadened. On the marketing side, we have increased the number of exhibitions from 70 to 85. Distribution channel is also being diversified. We are holding mission conferences in Latin America, Brazil, New Zealand, Australia, Far East, Africa, Central Asia and East Europe. The aim of these conferences is to discuss commercial issues and make future plan for marketing Pakistani products in these countries," says an EPB official.
He said: "We have trade councillors in top 20 countries of the world. They were focussing on new markets for Pakistani new products, but the how much they are contributing to the national kitty is pretty difficult to quantify".
The textile industry in Pakistan is one of the most important sectors due to its export earnings and employment. Pakistan's global share in the textile trade is approximately one per cent and has remained stagnant since many years. In comparison, China's exports grew from $5 billion in 1983 to $45.5 billion in 1997.
"I must say that it is crucially imperative that we remain in battle preparedness for the rapidly changing global textile trade regime and the oncoming global challenges in the wake of the WTO regime. We must adapt ourselves with the changing global trends by increasing most significantly, the share of exports of our value-added knitwear products as envisaged in the textile vision 2005. We must strive to increase our exports of textiles to over $14 billion by 2005," says Aslam Ahmed Karsaz, central chairman of the PHMA.
He says: "We have to gear up for 2005 to survive in the global market against stiff competition from China, Indonesia, Thailand, India, Turkey etc. Our entrepreneurs must be ready to take bold and protective steps to modernize the industry, quality upgrading and strict quality control to meet the stringent demands of the foreign buyers."
The government should provide a stable macro-economic environment. "Huge amount of exporters' liquidity is blocked in the sales tax; duty drawback rates have been drastically reduced; government agencies harass the exporters for which it is important that federal/provincial/local government taxes be consolidated and collected at one source. Infrastructure such as power, water and good road network is provided to the industry," Mr Karsaz added.
Shabir Ahmed, chairman of the Pakistan Bedwear Exporters Association, suggests that the government should bear 50 per cent cost for meeting social compliances and other conditions imposed by EU member states and the US. He also wants the government to pressurize the EU and the US to waive the anti-dumping duty on bedlinen.
