KARACHI, Aug 30: The long-term textile policy proposes to set up a textile machinery manufacturing base in Pakistan to support and sustain textile industry that should attract investment from home and abroad and push up export of all products to $24 billion plus by the next five years.
For this purpose, all rebate incentives being offered to the textile sector in the name of research and development at the rate of three, five and six per cent are being integrated in the long-term textile policy.
The policy is being given final touches by the textile ministry, in consultation with the finance ministry and is expected to be handed to the federal cabinet sometime next week for approval.
A well-placed source said that textile machinery manufacturers in many parts of the world are on the lookout for relocation of their facilities.
’’Pakistan is one such place with cotton production, a mature textile industry and an attractive place for investment,’’ an official said.
He disclosed that the some segment of spinning that could not be accommodated in concession rate lending will be given a three per cent relief in the interest rate.
“This will cost anywhere up to one billion rupees plus a year to the State Bank,’’ he said.
’’The focus is on developing infrastructure facilities and emphasis is on setting up self-contained textile cities and garment cities to attract investment,’’ the source pointed out while informing that work on construction of textile and garment cities in Karachi, Lahore and Faisalabad is in full swing.
’’The problem of missing and weak links in the textile chain has also been addressed in
the new policy,’’ the source said, and expressed the hope that in the next few years processing, dyeing and finishing segments of textile industry will be developed to its full potential.
’’We want to have a fully self-sustained and self-serving textile industry where all segments are inter-linked and end products secure good prices.
“The Planning Commission has proposed an investment of more than Rs500 million for textile projects in the current fiscal year,’’ the official disclosed who revealed that a sum of Rs22 billion will be invested in the next five years to upgrade textile industry.
At present, the Federal Board of Revenue and the finance ministry are giving a close look to the policy to ensure cost-effectiveness of money to be invested and proper utilisation of rebates being offered to exporters.
A textile machinery complex was set up in the public sector about 30 years ago in Pakistan which failed to attract customers simply because sponsors of textile projects were interested in import of plant and machinery rather than buying from local company.
Market sources said sponsors obtained bank loans on the basis of highly inflated cost of project designed on imported machinery.
Import helped sponsors to siphon off a big chunk of money and the project went in loss before its completion. In the decade of 80s, textile barons were the biggest beneficiary of loan write-offs.
Developing facilities of textile machinery and equipment manufacturing in Pakistan will be another attempt in Pakistan.
But this time attempt is being made by offering investment opportunities to private sector and integrating this project with all segments of the industry.