Private sector to invest over $2b in Pakistan's textile sector

ISLAMABAD - Pakistan's private sector plans to invest over $2 billion in the textile sector during the next three year period.

By From A Correspondent

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Published: Sat 17 May 2003, 12:18 PM

Last updated: Wed 1 Apr 2015, 9:16 PM

The "Textile Vision 2005" - placed before the participants of the three-day Pakistan Development Forum (PDF) meeting recently - said there was a potential to achieve exports worth $13 billion by 2005-06. The vision claims to rank within top 10 in the world textile exports and rank within top 20 in world clothing exports.

It also informed the PDF meeting that approximately $1 billion has already been invested in the textile sector in 2002.

The textile industry targets consumption of15 million bales of cotton by 2006-07 as free import and export regime in cotton has stabilised its price as well as its availability despite variations in crop size. The consumption of long staple cotton would increase.

However, Pakistan textile industry is seeking a level playing field to the farm sector compared to farmers in other countries. The government was asked to provide direct subsidy to farmers to ensure a fair return till the time subsidies are withdrawn by other countries also. It was also said that cooperative and mechanised farming be undertaken to minimise input cost and obtain maximum yield in the farm sector. The PDF was informed that the structure of textile industry shows a presence of strong basic textiles. Basic textiles are being more consumed by the local industry than export for value addition.

The industry is asking free market mechanism in manufacture fibers (MMF). It maintains that by switching over 60:40 cotton to MMF and resultantly getting the advantage of productivity from the existing manufacturing capacity textile industry can generate even more exportable surplus.

The government was asked to encourage such a policy that should help transition of the industry to a value added products. The present industry structure is unbalanced an required substantial investment in the organised garment sector to avail market access under post quota period.

Similarly, the government was urged to encourage professional manpower to develop human resources. The industry believes that the development of vocational training institutions for the industrial work force will help increase the productivity and eliminate gender discrimination.

The enabling environment is required to streamline tax regime and collection mechanism. Utilities be made available to the industry at competitive rates and ensuring compatibility of local laws with social compliance under WTO. Likewise, the industry calls for fast track public private interaction and business enabling environment to attract new investment by maintaining quality standards.

The PDF participants were informed that textile industry is the backbone of the Pakistani economy as it contributes 10.5 per cent in the GDP, earns over 60 per cent of the foreign exchange and employees 40 per cent of the workforce in the manufactured sector. The textile industry also contributes over Rs50 billion to the exchequer in taxes.

The structure of textile industry shows a presence of strong basic textiles which are being more consumed by the local industry than export for value addition. Exports of value added is increasing 27 per cent annually. The industry seeks to increase the area for expansion in cotton sowing and to have comparatively better technology in basic textile than competitors.



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