July 22, 2007	Sunday	Rajab 06, 1428

LAHORE, July 21: The All Pakistan Textile Association (APTA) has criticised the State Bank of Pakistan and the textile ministry for putting all their focus on the processing industry and refusing to appreciate the crisis-like situation in the spinning industry.

APTA chairman Adil Mahmood said that the textile ministry had put all its focus on the processing industry and the benefits that could be directed towards it to the exclusion of the spinning sector.

He pointed out that the federal textile minister had expressed his lack of knowledge regarding which spinning mills had closed down during a meeting of the Federation of Pakistan Chambers of Commerce and Industry.

Research and Development (R&D) facility had been allowed to the polyester fibre industry, a raw material supplier to the spinning industry, along with all the others in the chain except the spinning industry which was the responsibility of the textile ministry.

He said that the finance ministry wanted to try and find a solution which would not involve finances or a burden on the budget. He said that the Indian government solved the problems being faced by its industry within weeks but committees after committees continued to be formed in our country without doing anything for resolving the basic problems.

Criticising the high mark-up rates being charged by the banks on the industrial loans he said that the State Bank admitted that the banks were cartelised. With profits going up to 200 to 3000 per cent during the last three years it was clear that much of the profit had been transferred from the industry to the banks.

He said finance cost formed 2.5 per cent of the sale value in 2004. It had risen close to 8 per cent in 2007. The monetary tightening policy of the SBP had backfired and increased the inflation instead of controlling it. Excessive profits of the banks caused by raising of interest rates had also contributed to increase in inflation.

He was of the view that the agriculture ministry could resolve much of the problems of the textile industry single-handedly by fixing its cotton policies. The yields across the border were increasing by 20 per cent year-on-year whereas production had gone down in Pakistan. A Swedish cotton trader quipped that how does the pest and weather knew where the border of India started and Pakistan finished.

He said that the textile industry did not want any subsidies or cash handouts but a consistency of policy and a level-playing field vis-à-vis other textile sectors and regional countries.

It wanted the 2004 cost structure albeit a reasonable increase for actual inflation whereas it was faced with 100’s of per cent of cost increases in the past two to three years changing the entire economics of the textile spinning industry.

Spinning was an export based industry either directly or indirectly and had to sell its products at international parity prices irrespective of local cost increases or local inflation. The textile spinning industry was so despondent that it was willing to call it a day if it was given a practical strategy or a bankruptcy law.