Pleasant surprises are often followed by troubling afterthoughts in Pakistan. Beautiful women showcasing top textile brands cast a spell on commuters, slowing down traffic on busy roads.

Smiling down from billboards, they remind people of an additional pressure on the family budget at the start of the summer shopping season. An average household on the lower rung of the social scale annually spends around Rs5,000 per female on cotton clothing, according to an estimate based on a random survey by this writer.

The customers of designer lawn suits on the opposite end of the social spectrum end up spending more on their summer wardrobe than a working class family’s budget for a year.

‘The competition has forced textile mill owners to innovate and experiment forging relationships with designers. They seem to be unlearning the old ways of doing business and are trying to understand the market to find their niche’

The size of the cotton fabric market, which includes overseas Pakistani customers, has been projected to expand at the normal pace of about 5pc in 2014-15.

Cotton fabric sale proceeds — both from the formal and informal sectors — were projected at Rs440bn last year. Textile experts find the projection realistic, but most manufacturers consider it to be highly exaggerated. Top bureaucrats in the relevant ministries had no clue about the peculiar trends or the actual size of this segment. Textile Minister Abbas Khan Afridi was busy, while Amir Muhammad Khan Marwat, federal secretary in the textile ministry, said his focus was on promoting exports.

“We facilitate if there is a need, but the domestic market generally operates on its own,” he said over the phone, sidelining the question on the market size.

Bashir Ali Muhammad, Chairman of the Gul Ahmed Group, who also headed the International Textile Manufacturers Association, rubbished last year’s projection.

“The fabrics market is not even one-tenth of the suggested size. It possibly can’t be. In the absence of a proper study based on documented facts, it is hard to make an assessment, but this number doesn’t reconcile with the country’s manufacturing capacity,” he said.

He lamented about the lack of seriousness at every level. “People are biding time or are in the game for a quick buck. There is no long-term commitment or a drive to compete on a level ground. There is a need to invest in research and gathering data to develop policies and spearhead sustainable development in Pakistan. He also promised to share the estimates of the cotton fabric market size as soon as he gets them.

Kanwar Usman, the textile ministry’s director for research and development, found the projection not just believable, but also realistic.

“There is no systematic study on the subject, but it is simple math. Pakistan produces 1bn square metres of fabric; 60pc of this is exported, and you price the remaining 40pc or 400 metres that is consumed locally and see what you get. Add in the supplies from unregistered textile mills and the results will convince anyone that it is not kite-flying and that the market is in the vicinity of that projection,” he asserted.

“We hit about the same number if we monetise the demand projections based on population estimates.

There are about 50m adult women. On average, if one makes three cotton dresses a year [150m suits] and each suit measures five metres, simple arithmetic [150x5=750m metres] actually projects a gap in demand and supply, which is being covered by the informal sector or by imported/smuggled fabrics,” he said, believing the market projection reconciles with the other data.

Pervez Lala, CEO of Lala Textiles, was not impressed. “How can anyone even imagine those scales in Pakistan? Instead of guessing, had the government been efficient, it could have provided the actual figures. The visibility of brands should not be mistaken for good times for textiles.”

“When the bulk of the industry operates for 200 days, mill owners are on their toes. The situation on the demand side is also not as rosy. Economic pressures are forcing families to opt for cheaper and coarser imported fabrics. How can you imagine the market to be worth hundreds of billions? The summer fabrics market should be not more than Rs6bn,” he said.

“If the government put its act together, there is no denying the fact that the potential is there. With the right set of policies, the country has the talent and the resources to multiply its output many times over. But for now, it is hard to maintain production levels. I believe that cotton fabric production has actually dwindled.”

Another textile tycoon evaded the issue of the market’s size, but conceded that the surge in summer demand has mobilised people in the textile business to expand into lawns.

“There are many businessmen who added fine cotton-making plants in recent years to their mills, inspired by the brisk activity in this segment. The competition has forced millers to innovate and experiment forging relationships with designers. They seem to be unlearning the old ways of doing business and are trying to understand the market to find their niche.”

He said if regional markets, particularly India, become more accessible, it can change textile millers’ fortunes. The window is not going to be there forever. “Currently, we have the advantage in quality, colour and printing. The Indians know that and are trying to catch up.”

Businessmen tend to underplay their performance and hide their size for obvious reasons. This is because, in all fairness, they are taxed unfairly when compared to traders and service providers, despite their greater contribution to job-creation and utilisation of natural resources for economic gains.

Published in Dawn, Economic & Business, March 16th, 2015

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