LAHORE: The All Pakistan Textile Mills Association (Aptma), Punjab chapter chairman, S.M Tanveer, says an unprecedented fall in textile exports, particularly the basic textiles including yarn and fabric, is clear indication that the Punjab-based textile industry is unable to operate to its potential.
“Some 70 per cent capacity of the textile industry is based in Punjab. As per the FBS, the data for the month of April against the corresponding period shows the exports of cotton yarn and cotton cloth have declined by 25pc and 36pc, respectively,” Mr Tanveer said in a statement on Friday.
Similarly, the growth in value-added textiles exports was unimpressive despite getting the GSP plus facility from the EU, he added.
He said the eight-hour electricity and the 16-hour a day gas loadshedding in the Punjab-based textile mills was the main reason behind the prevailing situation. At least 100 textile mills have closed either fully or partially in the province.
The textile exports would be merely $13.8 billion against a target of $16 billion envisaged by the industry if the energy shortage continued for the next two months, he said.
Mr Tanveer said an increase in the industrial tariff in August 2014 from Rs9 to Rs14.5 per unit had burdened the textile industry as it was consuming 84pc of the total industrial consumption on the Pepco network.
However, the average cost of energy in other provinces was Rs7 per unit due to uninterrupted gas supply to captive power plants, he said.
Accordingly, he said, the Punjab-based textile mills had been burdened with Rs80 billion additional cost per annum due to tariff differential.
The non-availability of energy was adding fuel to the fire, leading to a large-scale closure of mills. Already, he added, an export potential of $3 billion was non-operational.
He said the fast re-emergence of Rs300 billion circular debt suggested that inefficiencies had not yet been plugged in the Pepco system. Rather, unprecedented increase in the electricity tariff had encouraged power theft, he said.
He urged the economic managers to ensure uninterrupted electricity and gas supply to textile mills in Punjab in order to earn precious foreign exchange, keep employment intact and increase in production for larger economic objective.
He said the government should address energy-relating issues, remove disparities and withdraw tariff increase to make the Punjab-based textile mills viable. Any further delay, he warned, could end up on a large scale closures, bankruptcies and unrest among workers.
Meanwhile, the Pakistan Textile Exporters Association (PTEA) in a statement said the massive decline in textile exports in April, both in value and quantity, was alarming and this trend was likely to continue in future unless the industrial crisis was addressed.
“Textile exporters had been forewarning the government about the fast looming crisis, but no steps have so far been taken to ratify the situation,” PTEA chairman Sheikh Ilyas Mahmood said.
Published in Dawn, May 24th, 2014