KARACHI, Oct 29: Small and Medium Enterprise Development Authority (Smeda) with the assistance of French expert has undertaken the task of upgradation of ginning industry. And it is expected that around $500 million would be earned after producing better quality and clean cotton on the modification of ginning industry.

This was stated by chief executive officer of Smeda, Iqbal Mustafa at a press conference held on Tuesday at Smeda’s head office. Flanked by French counsel general Gupuis and expert Yannick Davenel, he said on each pound of cotton the country lost 5 cents which meant that on 10 million bales the net loss came to half a billion dollars.

At present he said two ginning units, one in Khan Pur and another in Bahawalpur, had been selected as pilot project for the upgradation and modification, but all the ginning factories had to be modified by the year 2003, because under the time frame the federal government would promulgate amended Cotton Control Act by the year 2004.

Once the act is promulgated, he said, the provincial governments would have to ensure that ginning factories were meeting the technical standards and conditions laid down under the act.

Besides producing quality and clean cotton, Iqbal Mustafa said, the objective of upgradation of ginning units having 40 to 50 years old technology and machinery, was to make them viable and efficient.

At present 1,221 ginning factories are installed in the country but only 900 are working. By undertaking the task of up- gradation with the French company’s assistance, which also had experience of working in the underdeveloped countries of Africa, he said, the country would be saving Rs12 billion as the machinery of these units would have been scraped and thrown away.

The Smeda CEO said a US company was also consulted but “if we have followed their advice it would have meant that all the machinery of the ginning industry have to be thrown out and a new costly machinery costing around $150,000 per unit have to be imported by spending huge foreign exchange.”

Responding to a question, he said BMR of each ginning unit would cost around Rs1.5 million and once pilot projects were successful the cost could be lowered by placing large scale order with any reputed engineering company to manufacture the component of upgradation based on proto-type machinery.

Similarly, he said under the financial plan several banks had already shown keen interest and the Asian Development Bank had already allocated technology upgradation fund which might be released next year.

He said ginning industry was the weakest link in the entire cotton economy and needed urgent improvement if quality and clean cotton had to be produced to meet the textile industry’s requirement.

It is the ginners who will be financing the upgradation programme and PCGA is cooperating with Smeda in achieving this goal.

Yannick Davenel, speaking on the occasion, said that the minimum benchmark for achieving quality cotton through up- gradation was at energy consumption or cost would come down from 26kWh to 18kWh per bale per hour. Similarly, trash will reduce from 8 per cent to 4 per cent and floating fibre from 20 per cent to below 15 per cent, he added.