KARACHI, May 24: Bedwear exporters have called upon the government to bail out the industry from crisis as over 40 units in the city alone have been closed down due to high cost of production and lack of export orders.
“We are not seeking any rebate or subsidy but would ask the government to announce 10 per cent support on account of Research and Development (R&D), which will indirectly help the industry to save huge amount spent by it on sample-making, designing and quality improvement,” asserted Pakistan Bedwear Exporters Association (PBEA) Chairman Shabir Ahmed at a press conference here on Tuesday.
Flanked by representatives from Towel Manufacturers Association (TMA) Mohammad Naqi Bari and Karachi Chamber of Commerce and Industry (KCCI) Mohammad Iqbal Mangarani, the PBEA chief said the critical situation of the industry could well be judged from the fact that during the July-March 2004-05 exports of bedlinen had declined by 10 per cent compared to the corresponding period of last year.
Mr Shabir said that it was encouraging that the government had extended support to readymade garments, hosiery, knitwear and apparels by giving 6 per cent of FOB value on their exports on account of R&D.
The support given under Chapter 61 and 62 of the Pakistan Customs Tariff would be spend on product development, skill development and training, up-gradation of information technology and professional consultancy.
Despite the fact that there was a 22.76 per cent growth in knitwear exports during this period thanks to R&D support given by the government, the bedwear exports had recorded a decline in the same period from $1.007 billion to $909 million, showing a fall of 22.76 per cent, was in itself a strong case for our demand, he added.
He further said that bedwear was a labour-intensive industry with low capital investment, but due to high cost of input and lack of competitive edge in the quota-free market its exports had declined and as a result a large number of small and medium-sized units had been closed down.
He quoted the State Bank’s third quarter report for FY05 issued on Monday, which stated that the unit value had gone down and the bedwear exporters had to cut their margin to keep the market. The average unit price of bedlinen in Pakistan, he said, stands at $6.50, while in China this price was at $10.25 but now it has declined to $6.35.
Mr Shabir said that how could we compete in the world market with high input cost along with 13.1 per cent anti-dumping duty and 12 per cent customs duty on exports to European Union. Against this, he said, Bangladesh’s imports to EU are zero rated. As a result of this situation, he said the industry was relocating to Bangladesh, which would increase unemployment in Pakistan.
He said that the rapid increase in mark-up rates and utility charges had also increased the cost of production. “The labour charges are also going higher day-by-day as the petroleum prices, which determine the cost factor for each product, have been increasing every fortnight,” he added.
It is unfortunate that Pakistan well-known for its bedwears in the world is losing its market share to its rivals and once a market is lost it will be very difficult to regain it, he maintained.
“Pakistan can easily boost its exports to $30 billion in couple of years provided the government takes some burden from the industry.”
