- File Photo by Reuters
- File Photo by Reuters

Massive opportunities are about to open up for Pakistan to at least double its share in the global textile and clothing trade of $800 billion, from slightly above 1.5 per cent to three per cent over the next two to three years.

But, unfortunately, the country is not fully geared up to grab the upcoming opportunities.

China’s dwindling share in the global textile and clothing business, because of surging cost of production there, and Pakistan’s expected duty-free access to the European Union (EU) from next year, are being viewed by the textile industry as a ‘once-in-a-lifetime’ kind of opportunity for the country.

“Pakistan is in a unique position today to double its present share of just over $13 billion in the international textile and clothing trade in the short to medium-term,” Amir Fayyaz, a leading Lahore-based producer of processed fabric for the world’s major brands, told Dawn.

“China’s textile industry is losing its share in the world market and it is very much interested in relocating production facilities to Pakistan to export from here,” he said.

China’s share in the global textile and clothing trade has dropped from $300 billion to almost $270 billion in the last one year. “Imagine where will our textile exports reach even if we succeed in grabbing half of the market share China has lost,” he said. Many Chinese textile companies had shown keen interest in setting up joint ventures with Pakistani textile producers, added Fayyaz.

The reduction in China’s share in the global textile trade is only one part of the story. Another major window of opportunity for Pakistan’s textiles is likely to open up from January 1 — only four months from now — in the shape of duty-free access to the EU market. However, many textile producers doing business with buyers from EU member countries say the chances of Pakistan increasing its share in the European market immediately are not very bright because of the energy crisis at home.

“At least one-third of our woven and knitwear garment manufacturing factories are already closed because of various reasons. The remaining are operating at less than their installed capacity, not least because of gas and electricity shortages,” said M I Khurram, a major exporter of knitwear garments to the United States and Europe from Lahore.

“Even if we are able to revive our closed capacity by prioritising supply of gas and electricity to the industry, we can increase our textile and clothing exports to Europe by two to three billion dollars in one year.”

The EU’s textile and clothing imports from Pakistan stand at $5 billion at present, which is just two per cent of its total textile and clothing imports of $244 billion. Compared with Pakistan, China’s share in the EU textile and clothing market is 20 per cent; India’s is four per cent, and Bangladesh’s is five per cent.

M I Khurram pointed out that Bangladesh, which imports yarn and fabric for its garments industry, has successfully increased its value-added textile exports from $5 billion to around $23 billion in eight years because of duty-free access to the EU and the United States, and is projected to boost them to $40 billion in the next two years.

“Bangladesh is fast capturing greater market share by converting yarn and fabric imported from us into garments. Just imagine what we can do when a similar facility becomes available to Pakistan, the fourth largest cotton producer country in the world?”

Amir Fayyaz claimed that Pakistan’s textile industry has the potential to raise exports to $36 billion, provided all the three million tonnes of yarn produced in the country is converted into value-added textile products — garments, home textiles, towels, etc. The projected potential is based on estimates that yarn constitutes a quarter of the price of a garment.

“This will require a huge investment of $20 billion in the entire supply chain, from spinning to finished products, and create almost eight million new jobs, if not more,” he said.

Currently, Pakistan exports 0.735 million tonnes of yarn, worth $2.24 billion, and two billion square metres of cloth, worth $2.6 billion. “Even the conversion of this yarn and cloth is into basic garments can fetch an addition $2 billion,” Amir said.

The exporters say that India has been investing heavily in its textile industry to raise its share in the global textile and clothing market, with a view to replacing China. “If we want to benefit from the opportunities coming our way, we would have to start planning and investing now. Indeed, the government recognises the significance of the textile industry and is making a strategy to attract Chinese investment in this sector,” said Khurram.

“The Punjab government, for example, is planning to build a garment city near Lahore, where local and foreign investors will be provided modern infrastructure to set up their production facilities for exports,” he added.

Yet, the first job for the government is to provide gas and electricity to the factories so that the closed capacity could be revived, said Khurram.

Updated Sep 02, 2013 03:17pm

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Comments (3) (Closed)


Majid Sheikh
Sep 02, 2013 03:55pm

The decline of Pakistan's textile, leather, rice and other exportable goods is solely because banks are giving the Government money to waste instead of private entrepreneur. It is so easy to blame defaulted loans as the reason. Utter nonsense. Business houses fail for various reasons, and are very much in line with the ratio all over the world.

Syed Shah
Sep 02, 2013 07:51pm

Puniab Chief Minister Mr. Shehbaz is making all practical efforts to improve industry. Unfortunately, Sindh Chief Minister has failed so far to attract any foreign investment.
At home just look at the local transport. These so called busses are not fit even for cattle, are thrust upon Karachi people in particular, and generally all over sindh. Mr. Shah, Sir, you are an honourable person, we realise that, kindly gey rid of the parisites around you, and do some thing practicle for people of this great land of Sindh.

Malik
Sep 02, 2013 09:49pm

Hope Paksitan grabs this opportunity with both hands, and our industry stands up again and revives Karachi and other major cities. This will for ensure and helps eradicate terrorism in the country...