KARACHI, Sept 15: Big textile companies — more than two dozen that spin yarn, weave fabric and are in manufacture of home textile — are actively involved in negotiations with the bankers to get their credit issues quickly resolved amicably in anticipation of a record bumper cotton crop of 14 million bales plus in coming weeks and to gear up for Christmas and New Year demand from Europe and USA.

Initial fears of a big damage to crop from mealybug and virus have apparently now been allayed. A meeting of leaders of all segments of textile business held here on Thursday under the auspices of Pakistan Central Cotton Committee with Federal Agricultural Minister Hayat Mohammad Khan Bosan in chair reviewed the pest infestation situation and found it “not a big threat”.

The textile industry has now an appetite of about 16 million bales annual consumption of which bulk is expected to be available from local sources. Financing is a big issue for majority of about 400 textile mills in the country who were not in a position to clear their bank credits of 2006-07 because of sluggish export of yarn, fabric, bedwear, and other textile products.

Cotton financing for current season is being estimated over Rs100 billion. Textile groups with good track record will obviously grab credit lines and will take initiative in the business much earlier than others.

Leaders of textile industry were pleading for a two years moratorium on outstanding bank credits said to be about Rs70 to Rs80 billion. In all likelihood, the banks — 90 per cent are now in private hands — refused to oblige their private sector clients.

“Business deals are being worked out selectively with textile companies,” a senior executive of a privatised bank said while clarifying that banks do not reject any proposal to put off loan repayment.

“The terms of rescheduling outstanding loans and grant of new credit lines vary from client to client,’’ another banker said who pointed out that their business was to offer credit and make money.

“Textile is now passing through a bad patch’’ a senior executive of a private bank said. But he was confident of a quick revival of textile industry in days to come and his bank will share gains of textile business.

More than two dozen big textile groups are integrated and involved in spinning, weaving and manufacture of a variety of home textiles. They have set up their trading houses in Europe, USA and Far East. Quite a few of these more enterprising companies have set up their retail outlets and warehousing in foreign countries.

They need a big inventory of cotton to keep spinning in operation round the year and also servicing the export orders from abroad and hence their demand for credit from bank is huge. Banks continue to oblige these groups.

The eminence position of top textile groups has led to a split in All Pakistan Textile Mills Association (Aptma). About 150 or so odd textile mills have formed their own All Pakistan Textile Association (APTA) as they found that big textile

tycoons were indifferent to the general issues facing the industry. The main problem for these textile mills is outstanding bank credit.

“We did not talk to APTA but we are negotiating with individual textile mills on credit issues’’ a banker revealed who said that influencing banks through government by group pressure is now a story of bye gone days. “Our main concern is recovery of outstanding loan and offering new facility to earn money,” he added.

So far, the textile business has remained unaffected from the political fever that gripped the country since March 2007 and there is still a lot of uncertainty about future. Both leaders of textile industry and bankers do not seem to be in panic but are definitely cautious.

What worries the textile business is growing lawlessness in Karachi. Early this month, an industrialist was murdered at a busy intersection of SITE industrial area. At a protest meeting held at SITE Association of Industry, on September 10, Zubair Motiwala, a former chairman of SITE Association, delivered a fiery speech.

The Provincial Advisor on Home Affairs Wasim Akhtar and Provincial Home Secretary were also present in the meeting. Next day, three armed men barged into Mr Zubair’s home and collected family jewellery and other valuable items.

The growing lawlessness in Karachi has forced many big business groups to shift their family members to Dubai for which they have made investment in real estate. Businessmen say that their buyers are reluctant to come to Karachi for finalising deal. They have to go to Dubai, Abu Dahbi and Europe to finalise the business deals which is adding to cost of doing business.

What business in Pakistan now looks for is a political reconciliation, restoration of an elected government that can effectively handle law and order situation and continuation of economic policies.

“An end to present tension in political environment is bound to give a big boost to business,’’ leader of a big business group that has interest in textiles, banking, financial services and other areas said.