KARACHI, Aug 10: Minister for Commerce Abdul Razak Dawood while terming the ginning sector as the weakest link in the entire industrial cycle of textile has warned that time has come that out of 1200 ginneries 400 units will have to pack up or would ultimately be driven out of business by market forces.

Addressing as chief guest at a dinner hosted by Pakistan Cloth Merchants Association (PCMA) here on Friday, the minister said that he had told the ginners that only efficient ginnery could survive in the market.

Dawood said ginning units have to be run professionally, and a sustainable quantity the world over is 50,000 bales per annum, which means that a very large number of existing ginneries will have to close down.

Similarly, the minister said that handlooms should be replaced with more productive looms such as water and air jet looms. He said the industry has to prepare itself for 2005.

“If you do not upgrade yourself and the industry, remember! there is China and India and they would give you tough time when quota restrictions would be no more and entire textile trade will be on free market mechanism,” the minister warned.

The spinning industry, he said, has upgraded itself and underwent large scale modernization to meet the challenges of 2005.

However, it is encouraging to see that restructuring is taking place in the textile industry and there is better quality in yarn, cloth in particularly, he added. The exports of most of value-added textiles have become a billion dollar worth including garments, bedwears, etc.

Furthermore, he said export of value-added textile goods was up to 35 per cent in the recent past but now have gone to 57 per cent, which is highly commendable and shows that the industry is moving on the right direction as laid down by the “Textile Vision 2005.”

The minister said there was time when “we talked about lifting of restriction on imports and there was a lot of resistance from industry but today there is no ban of any nature on free import of any item but still the textile industry is surviving.”

The government was stick to its commitment of non-interference despite the fact that on many occasion different segments of textile industry asked the ministry to impose ban of free export of yarn and cotton. As a result of this, the minister said the system of free import and export is working smoothly and no body is being hurt.

Abdul Razak Dawood said he was confident that the industry has almost prepared itself to meet the challenges of the year 2005.

The minister recalled that when he went to attend the WTO conference at Seattle the big buyers of the world warned him that after year 2004, they will be calling the shots as they will be free to pick their own supply source which was not possible under quota restrictions.

On the suggestion of industry, he said the government took up the issue of greater access to market with developed countries and similarly removed all sort of restrictions on import of textile goods.

However, he said greater access to market from EU is not without a cost as the country has to lower its tariffs in exchange.

The minister briefly talked about sales tax refund as well as DTRE rules and assured that he would be taking them up with the CBR to find out early solution.

The minister was highly critical about smuggling and said it has badly damaged country’s industry but was optimistic that once the tariffs are further lowered the menace of smuggling will be over.

Dawood was of opinion that once local sale of products becomes less profitable only then export culture will develop and we should endeavour to make exports more profitable.

He assured the participants that there is no such move to impose duty on import of cotton particularly when there is no need to bring in any sort of change at this stage as things are moving smoothly and on right direction.

Earlier the central chairman Pakistan Cloth Merchants Association, Abid Chinoy informed the minister that the association has attained exports to the tune of $1 billion.