June 18, 2008	Wednesday	Jamadi-us-Sani 13, 1429

KARACHI, June 17: The manufacturers-cum-exporters of the value-added apparel sector, upset over withdrawal of research and development subsidy in the new budget, claimed that they stopped booking fresh export orders to avoid losses.

Exporters of apparel sector for the second time in a week assembled at the Pakistan Hosiery Manufacturers Association (PHMA) office to lodge their protest against the budgetary measures which they say are bound to further enhance cost of production.

Addressing the meeting, Naqi Bari, central chairman of PHMA, maintained that the R&D was a continuous process, which should stay for at least a quarter of a century to enable the industry to firm up its processes by developing value-added products, marketing techniques and human skills.

He said that at present most of the functions, which are supposed to be performed by the government, were being done by the industry. These include arranging water supply, power generation, development of human resources, etc.

PHMA zonal chairman Jawed Bilwani said that the lack of allocation of funds in the new budget for R&D support shocked the value-added textile sector. Besides, a new wave of hike in input cost triggered by increased labour wages and high utility charges due to levy of 20 per cent withholding tax would totally cripple the industry.

He estimated that the net impact of budgetary measures on the cost of production would come close to 17 per cent and by withdrawing 6 per cent R&D in real terms the industry would be burdened with 23 per cent additional cost.

Mr Bilwani said that the industry has already been facing long power outages and had to shift to self-generation.

Therefore, he warned if the government withdrew the R&D support there would be large-scale closures in apparel industry and around three million workers may lose their jobs.

Zubair Motiwala, former chairman of PHMA, said that when the R&D was provided textile exports last year (2007-08) dipped by 3.4 per cent in term of value and by 11 to 13 per cent in quantity and in case the subsidy is withdrawn one could imagine what will be the result.

He said that the apparel industry did not seek any support from the government but would like to be ensured a level-playing field vis-à-vis regional countries, particularly, India, Bangladesh, Sri Lanka, Vietnam, Thailand and China.

Saleem Parekh, another former chairman of PHMA, said,” If anyone thinks that the rupee depreciation has benefited export trade the government should fix the parity for export trade because this will give us surety about the level and rate of our remittances against export proceeds.

Sultan Ahmed, also former chairman of PHMA, shared the experience of his recent visit to Bangladesh and said that CNG cost there was Rs8.5 per kg, power rate Rs4 per unit, and labour wages stand at around Rs4,000. He said there was a difference of about 25 per cent in utilities cost between Pakistan and Bangladesh.