February 24, 2007	Saturday	Safar 6, 1428

KARACHI, Feb 23: Sixteen filament yarn manufacturing units have closed down during last five years owing to high cost of production and dumping of cheap product from Far- Eastern countries and China.

A total of 20 units had been operating till 2000, with a total capacity of around 100,000 tons per annum. Today only four units are partially functional and the capacity has now come down to less than 40,000 tons.

As a result of the closure of these units, over 10,000 workers have been rendered jobless. Most of the smaller units faced closures before 2005.

Industry sources said investment worth millions of dollars had gone to waste as during the last six months, three large units were closed down. Among them two were public-listed companies and had been operating since 1984.

Polyester filament yarn is a synthetic yarn made from petrochemical raw materials and is largely used by textile industry to produce blended poly-cotton-yarn used in the manufacture of ladies and gents apparels.

Its major raw material, polyethylene terephthalate (PTA), is also produced in the country. As against this, in India the production capacity of filament yarn is over 900,000 tons, and the industry is operating at 90 per cent capacity.

A spokesman for the Filament Yarn Manufacturers Association (FYMA) told Dawn that the industry was in a bad shape. Even the third largest unit in the country, owned by S. N. Ahmed, chairman of the FYMA, had been closed down.

“The situation can well be judged from the fact that import of polyester filament yarn which was only 7500 tons in 2000, has increased to over 82,000 tons.

He said the representative body of the sector, FYMA, has also become dormant as no major industrial activity was being witnessed, and the last four units are also partially operating and may close down in coming weeks or months. After this, the entire demand of the textile industry will be met through imports.

“I must say that the government policy should ensure employment in the country, and for this, it should ensure that no injury is caused to the local industry by cheap imports or dumping by the countries which are directly or indirectly giving subsidies to their manufacturers to capture foreign markets,” the spokesman said.

Mr Sami Ahmed, vice chairman of the FYMA, said the major factor hampering the growth of the sector was the low-priced dumping or imports from Far-Eastern countries and China, and the other reason was the ballooning rates of gas and energy, labour and financial charges.

He said gas consumption accounts for 35 per cent of the total production cost and increased by 64 per cent in the last two years and this alone caused severe blow to the industry.

Furthermore, he said, dumping of polyester filament yarn had been made to such an extent that local industry was hardly able to cover the cost of raw material, packing material and power.

Mr Ahmed said the cost of filament yarn, imported from China is ambiguous as it carries various subsidies and eight to 10 per cent rebate given to exporters.

At the same time, he said local industry had to suffer after the government made a revision in import duty in the 2005 budget.

Furthermore, a sudden increase in the cost of gas and energy, and upward revision in mark-up rates, led the industry to a crisis.

Mr Sami urged the government to increase duty rate on import of polyester filament yarn as it would help avoid further closures, and may even help revive closed units.