An Overview of Pakistan's Textile Industry
Zamindar, Yacoobali G., Economic Review
Textile industry in Pakistan needs to carefully assess where it is going and where it wishes to go. We have to move towards increasing export earnings from downstreams products - value-added items. Setting up of a textile ministry, improving quality of our products and moving towards foreign collaboration in textile industry to acquire knowhow and access to markets and better quota administration can go a long way towards achieving our long term objective of having fair share of the world trade.
Pakistan is one of the world's largest cotton producing nations. The industry has 40 years of history. The industry is the major foreign exchange earner for the country. The industry benefits from Government's emphasis on an export led growth strategy. The main raw materials for the downstream sector are domestic cotton yarn and fabrics. There is abundance of land and skilled labour which has experience. In view of these factors the Pakistan textile industry has enormous potential in the form of raw material, skilled labour and government support. The combination of these elements provides the basis for development of its various segments.
Segments: Various segments of the textile industry are:
* Upperstream: Raw cotton and spinning sectors
* Midstream: Weaving and finishing-dyeing (processing) sectors.
* Downstream: Made-ups, Readymade garments and knitwear sectors.
Main features of the Textile Sector
The domestic market although large and growing at 5 per cent per annum consumes only 25 per cent of the yarn produced which translates to downstream production. 50 per cent of the yarn is exported, the other 25 percent is converted to fabrics etc. for exports. Pakistan produces around 8 to 10 per cent of the world's cotton but its share in total world trade for textile and clothing is around 2 per cent in value terms. There is a tremendous scope for improving its shares of world trade. I will come to this later.
Pakistan currently produces around 8.5 per cent of the world's total yarn production and accounts for 30 per cent of total world trade in yarn. Both these figures relate to quantity. The present installed capacities are 7 million spindles and 27000 looms of which 15000 are shuttleless looms, Additionally over 250,000 looms are in the unorganised non-mill sector. The exact capacity and statistics of units involved in Bleaching, Dyeing, Printing as well as other ancillary sectors are not available. There are 700 knitwear units and 4000 garment units with 200,000 sewing machines. This industry provides employment to 42 per cent of the large scale manufacturing sector. Present Scenario and Future Direction
The Pacific Rim countries are now moving into high tech products and are moving out of textile manufacturing. This would result in a void which offers opportunities to Pakistan and other developing countries. Presently our major competitors are India, China, Indonesia, Bangladesh, Sri Lanka and Turkey. Pakistan has advantage over its competitors as we are a major cotton producing country of the world. We have experience and abundant labour. It is necessary therefore to progress from the lower segment of the market to the upper layers. This is being achieved by upgrading products and marketing techniques.
The spinning sector underwent an unprecedented investment boom in 1980s, as a result of brisk cotton yarn exports. As a consequence, there were very few enterprises which contemplated measures for coping with possible future changes in competitive situation such as upgrading of products or preparing for demand from the export oriented garment sector. In addition to the export boom, the government policy of offering incentives to exports caused the spinning sector to focus its activities on overseas demand. Similar tendencies prevailed in the midstream (weaving and dyeing) sector.
In the 1980s readymade garments and the knitwear sectors emerged as industries, following an export boom in the upper and midstream sectors. …