FAISALABAD: Like the powerloom sector, the hosiery exporters claim their segment is also on the verge of collapse and they are looking for the government assistance to tackle the crisis.
Pakistan Hosiery Manufacturers & Exporters Association (PHMA), North Zone, former chairman Haji Salamat Ali said spinners had pushed the textile sector particularly the hosiery segment towards the crisis. He said the hosiery exporters had been facing financial losses as the rates of yarn had increased in the local market and the exporters were not ready to purchase products on exorbitant rates.
He said the textile exporters including that of garments and bed ware had been importing the cotton and yarn from different countries. However, the government imposed duty on both commodities succumbing to the alleged pressure of the spinning mills owners who, he said, had increased the rates of yarn approximately Rs1,000 per bag.
On the other hand, he said the government had also not been releasing the sales tax refund which had created problems for the exporters.
A couple of days ago, State Minister for Textile Haji Akram Ansari had a meeting with the hosiery exporters and assured them that textile package would be revisited to bridge the widening gap between imports and exports. The minister also assured them that more funds would be allocated in consultation with the finance ministry for the textile sector.
The exporters are still awaiting response from the government as their business situation is going from bad to worse, he said.
Naeem Ahmad, the PHMA chairman, said “we are passing through a tough time currently as our exporters are not able to achieve targets due to non provision of special incentive and conducive atmosphere for enhancing national exports.”
Shedding light on the issues being faced by hosiery exporters, he said the government had increased levies and taxes which increased the input cost. The high tariff of electricity and gas also aggravated the situation.
“We are unable to compete in the international markets due to high prices of our products,” he added.
Dozens of powerloom factories have been closed in Faisalabad and hundreds of machines are being sold in parts at junkyards.
Ali, owner of the junkyard of the Ghulam Mohammad Abad, said he had been doing the business of purchasing scrap particularly of textile machinery. He said he had never seen such a crisis before. He said the scrap dealers were under the impression that they would earn handsome amount by purchasing the powerlooms at economical rates. However, our expectations proved wrong as we are unable to find the buyers of powerlooms.
To avoid financial losses, he said, we dismantle the powerlooms and sell their spare parts against Rs65 per kilogram.
Naeem Ahmed said worsening law and order situation in Pakistan was also a major cause of decline in exports as importers were preferring India, China and Bangladesh. “This is a totally wrong impression that Pakistani items cannot compete internationally. We can increase our exports to the tune of $30 billion by providing level playing field to the exporters of the textile sector,” he added.
He said the PHMA members were providing job opportunities to about 500,000 families directly and indirectly in Pakistan and the hosiery segment contributed $3.2 billion to the national exchequer.
Pakistan Textile Exporters Association chairman Shaiq Javeed said high cost of production was the major stumbling block in economic growth as cost of energy inputs in Pakistan reached an alarming stage. He said Punjab-based textile industry was on RLNG tariff since 2015 and paying 40pc higher tariff than it’s in other provinces.
“The gas tariff is also burdened with various costs but exporters cannot pass on these system inefficiencies to the international buyers.”
Contrary to the hosiery exporters, Javeed claimed country’s exports witnessed 7.89pc growth in October. Immediate availability of regionally competitive energy prices, liquidation of pending refunds and a fast-track implementation of export growth package would further trigger the export growth, he added.
Published in Dawn, November 23rd, 2017
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