HILAL –VISSION Exports

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,
        

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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