Over view of the industry
Ready-made GarmentS
The RMG (Ready-Made Garment) industry of Pakistan has
expanded dramatically over the last few Decades. The RMGI of Pakistan
established in 1970 since than it is working hard to make a prominent share in
Pakistan's economy. In 1999-2011 the exports of Pakistani RMGI were US $ 8.5%
of the total exports.
Export of readymade garments from Pakistan decreased
form 42 million dozens worth US $ 1.59 billion in 2007-08 to only 27 million
dozens worth US $ 1.27 billion in 2009-10, thus showing decline of 20% in term
of value.
Pakistan is an agriculture based country. Export of
textile to different countries is the backbone of its economy. Cotton and
cotton blended fabrics, yarn and fiber's export is the biggest genre of
Pakistan. On the contrary to textile's foreign and indigenous market is only
holding a very limited market locally as well as internationally. Local demand
of readymade garments during the past five years increased manifold due to
increase in GNP, urbanization and population. Growing tailoring charges have
induced the people to purchase readymade garments in larger quantities in the
coming years.
Pakistan’s textile exports have continued to grow in
the first nine months of the current fiscal year 2010-2011. According to
the Federal Bureau of Statistics (FBS) and the Trade Development Authority of
Pakistan TDAP, textile exports grew by 30.38% from July 2010 to March
2011. While some of this increase can be attributed to the rise in the
price of cotton and other inputs, Pakistan’s exports have increased
significantly in terms of quantity as well. This reflects on the
increased demand for Pakistani textile goods in Europe and the US, where buyers
are not only willing to pay higher prices for Pakistani textiles but also
buying more of them. This is a very good sign for Pakistani textile
industry.
Textile exports had a share of 55% in the country’s
total exports of $17.79 billion during July-March 2010-2011. This share
used to be more than 66% in the past. This reflects on the increased
exports of other sectors such as agro food besides textiles. The State Bank of
Pakistan’s report predicts that the current trend of textile exports would help
the country to have record exports in current fiscal year. The major segments
which contributed to the textile exports growth include cotton yarn, cotton
cloth, knitwear, bed wear and readymade garments.
Despite the gloomy outlook for the industry this
turnaround is indeed welcome news. All textile categories have shown
increase in exports except tents and canvas. High value added sectors of ready
made garments and knitwear both reflected high growth in terms of quantity as
well as value. Readymade garments exports grew by 28%
Problems faced by the Readymade Garments Industry
With all opportunities and strengths at the back still
Pakistan's ready-made garment industry is failed to develop a niche in local
and foreign market. What are those problems garment industry is facing today.
i- Inappropriate Governmental policies:
One of the very important problems faced by not only
garment industry but all other industries as well is: lack of conductive
industrial policies, absence of foreign direct investment, insufficient export
processing zones and no trade fairs inside and outside the country. These
initiatives can become the main cause of export-led industrialization in
Pakistan. Government should provide the advantage of duty-free raw material
imports usable in the manufacturing of export products to encourage and
accelerate such industrialization. Another concern is the proper and on-time
implementation of policies and strategies. Rules and regulations that exist
only on paper are meaningless if they are not duly and properly implemented.
Bureaucratic complexities, corruption, political instability and lack of good
governance are some areas which the Government needs to address in order to
ensure the proper implementation of its strategies and policies. Infrastructure
development is another area where the support of the Government is undeniable
in a developing country such as Pakistan.
ii- Technological factors:
Rapid changes and development in technology has
increased competition. To address to this fast pace of technology garment
industry needs to learn and adopt new and innovative approaches. Pakistan is
still far from it. The machinery that is being used for different operations is
usually outdated and obsolete. Government should provide funds and loans to the
owners of garment industries so that they can install new machinery which can
perform tasks in easier and faster manner.
iii- Economic factors:
In the last two decades economic depression has been
seen worldwide. Due to increased war on terrorism countries are forced to put
lots of budget on the defense than on other sectors. A sudden downfall in the
purchasing power of the general consumers has also been seen. Textile is the
first main ingredient of Pakistan's economy. Internal political problems and
instability is another cause of economic downfall. Poverty level, FDI (Foreign
Direct Investment), and export are on fast decline. Many garment industries have
been closed today due to all these factors.
Iv- Power Failure:
Power failure is one of the biggest problem garment
industry is facing. Long duration electricity load shedding without any
schedule; instable prices of electricity, per unit price of electricity raise
after every few month; shortage of gas supplies in winter; increase rates of
petroleum products; lack of CNG; as well as water shortage are some of the
prominent causes of garment industry downfall in the lat two or three years.
Garment and textile industry of Pakistan suffered
great losses in November, December and January this year. Though large
industries have developed their own power plants (running on gas) but these are
few. As a result of loss suffered by the garment industry they reduce the wages
of employees.
v- Frequent Price Fluctuations:
Create a serious problem for the industry,
particularly for those who manufacture garments on orders. After announcing the
budget in June every year government keep on raising the rates of raw materials,
processing materials, auxiliary products and other products used in the
processing. The industry owners can not make their own budget because it keeps
on changing with price fluctuations.
vi- Lack of infrastructure:
Physical and organizational structure of Pakistan's
garment industry is as worse as other systems. Infrastructure cannot be
enhanced in a day it is a result of years of hard work but today most of the
infrastructure is getting destroyed by the crisis of terrorism etc.
vii- Purchasing Power:
Consumer's purchasing power has declined in the lat
few years. With frequent price fluctuations garment industry is forced to
increase the price of their products which consumers are not willing to
purchase. Even in foreign market Pakistan is facing severe competition with
India, china and Bangladesh; these countries are offering high quality products
at low prices because their economy is much more stable than Pakistan.
viii- Facts & Figures Regarding Production:
Although garment industry made a rapid growth till few
years back but no organized data is available that can show the expansion or
reduction in the growth of this sector. Firstly, most of the garment industries
are not working on large scale; they are small industries working at their
homes or in small rural places which are not even registered. Secondly,
government has not made any statistics of their growth. Thirdly, many
industries close each year and new ones develop but there is no stability
except for few bigger names.
ix- Research and Development:
In educational sector there is no trend towards
researches. Lack of research-oriented attitude also leads to lack of
improvement in the industry. New and innovative products are introduced by the
garment industry of other countries but Pakistan is legging behind in this
context.
With these problems the quality of the product has
been deteriorated. Consumers on the other hand today are more aware of the
product quality and they do not waste their money on poor quality products. To
complete the process of production, industries try to cut down their investment
on product promotion, publicity and advertising; they are firing many employees
to reduce the budget, this has in turn increased poverty rates.
Pakistan has lots of potential and the raw material
for the garment industry–the fabric- is also of superior quality but the
environment to develop and progress is not compatible.
HILAL-VISSION
INTRODUCTION
HILAL –VISSION is the Manufacturer and Exporter of Men's, Ladies and
Children's knitted & woven garments. They started exports in 2003 and since
then, they have expanded their business
to countries in USA & Europe, these being our major markets. By producing
high quality products, making timely shipments and delivering efficient
services, we have established a reputation of being committed to customer’s
satisfaction. Although our presence is global, our emphasis is on giving
special attention to each client taking care to accurately determine individual
requirements. Our products and services are customized to meet the needs of
each client.
They have experienced in delivery an appropriately
balance mix product which successfully meets the customer’s requirement. They believe
and committed to provide quality products by meeting our customer requirement
through continual improvement at every stage of manufacturing process. They concur to create and maintain healthy working
environment in which individuals working as a team accomplishes individual and
company objectives to achieve this policy the following objectives are
formulated like, No appointment of underage OR child labor for in any position
— Total
production 10,000 dozens per month
— An
annual turnover which exceeds us 50
million.
— Annual
production approximately 120,000 dozens
(20,000 is the capacity)
MACHINERY
KNITTING MACHINES: - 10 machines include wider width
of jersey and Interlock with elasthene attachments.
DYEING MACHINES: - Exhaust Dyeing & Compactor
STITCHING MACHINES: 65
1- 25 Lock Stitch,
2- 15 Flat Locks,
3- 13 Over Lock,
4- 10 Elastic,
5- 1 Safety Machine,
6- 1 Double Needle,
DYEING MACHINES: - Exhaust Dyeing & Compactor
STITCHING MACHINES: 65
1- 25 Lock Stitch,
2- 15 Flat Locks,
3- 13 Over Lock,
4- 10 Elastic,
5- 1 Safety Machine,
6- 1 Double Needle,
COMPETITORS WITH IN COUNTRY:
Competitors
that had been highlighted by HILAL VISION were.
PAK-APPREL
CROWN
TEXTILE
DEEWAN
INTERPERISES
AL
MUNAAF TEXTILE
THREATS IN INTERNATIONAL MARKETS:
There
are some more threats which whole ready made garments industry of Pakistan is
facing are from.
INDIA,
BANGLADESH ,CHINA :
Bangladesh,
China and India is providing more cheap labor. Not only this but They also had been provided with a facility
that if the local importers in UK and USA are importing from BANGLADESH, INDIA
and CHINA then they do not have to pay the duty on the other hand if they are
importing from Pakistan then they have to pay the duty of 18%.
QUOTA SYSTEM
Previously
there was a quota system that countries were being assigned a quota that from
these approximately 25% of imports will be done. But now Pakistan is not being
appointed any quota.
OTHER
ISSUES:
Other issues which had been faced by the Hilal
Vision is that the electricity supply. Less supply of electricity is not allowing them to use their
full capacity of the production. Currently they are using their half of full
capacity.
PRODUCT,
PRICE PROMOTION, PLACEMENT
PRODUCT
T-Shirts, Henley, Tops, Pajamas, Pajama Suits,
Pullovers, Crew Necks, Shorts, Polo shirt, JEANS
PRICE
1,000-5,000 HIGH PRICE
5,000-50,000 LOW
50,000-10,
0000 VERY LOW
Placement
— H.v
supplies directly to retailers of USA and Europe
— Time
is money
— Denim
old
Permotion
No
such activities like bilbords only taking part in exibitons article writing
CERTIFICATION
CERTIFICATION FOR ISO IN-PROCESS
SWOT
STRENGTHS
LOW
PRICE
HIGH
QUALITY PRODUCTS
TIMELY
UP DATE
LESS
INVENTORY COST
WEAKNESS
NEED
MORE FIANCIALS
LATEST
TECHNOLOGY
PROMOTIONAL
ACCTIVITY
APPLIED
FOR ISO CERTIFICATION
HIGH
LEAD TIME
OPORTUNITY
TARGET
LOCAL MARKET
CAN
INCREASE ITS PRODUCTION
MALAYSIA,JAPAN,MIDLE
EAST
USE
OF FREE TRADE ZONE
THREATS
POWER
FAILURE
GOVT
POLICES
TAX
RATES
QUOTA
SYSTEM
HIGH
COMPITATIVE
PORTER FIVE FORCES
ANALYSIS
BARGAINING POWER OF CUSTOMERS
•
History and relationship with customer
is important
•
Bargaining power is high
•
H.V has a cost advantage when it comes
to raw material
BARGAINING POWER OF SUPPLIERS
•
BARGANING power of supplier is low
•
Packaging suppliers
•
Cotton/ yarn suppliers
•
Priting materials
THREAT OF NEW ENTRANTS
•
Cost of doing business is not high but the power failer and other crises which
acts as entry barriers.Govt policies also play an important role here in
Pakistan but internationally it is high.
THREAT OF SUBSTITUTE PRODUCTS
•
Bedding consumes more cotton than
apparel which cannot be replaced by synthetics
•
But in mix cloth there are subsitudes.
•
COMPETITIVE
RIVALRY WITHIN THE INDUSTRY
The
new rivals are going because of problem facing by this industry in Pakistan but internationally they are
coming.
RECOMMENDTIONS
ž Promotional
activities should be there.
ž Local market should be target
ž Other areas can also be Targeted
ž Free trade areas could be use if they target
the Middle East.
ž R&D should be there.
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