Textile Industry Of Pakistan (Weaving Sector)

Table of Contents

Chapter#01
Overview of Textile Industry
Chapter#02
Historical development of weaving textile Industry
Chapter #03
Companies’ Profiles
Al-Karam Textile Mills
Yunus Textile Mills
Nakshbandi  Textile Mills
Blessed Textile Mills
Al-Karam Textile Mills
Yunus Textile Mills
Nakshbandi Textile Mills
BLESSED TEXTILE
Chapter#04
Weaving Manufacturing Process
Chapter#05
PEST ANALYSIS
Chapter#06
Porter Five-Forces Model Analysis
Chapter # 07
Impact of WTO on Textile Industry
Chapter#08
Context Analysis
Trend Analysis
CHAPTER#09
Issues In Pakistan Textile Weaving Industry
Chapter#10
Solutions to the problems
CHAPTER#11
Conclusion and Recommendation 

Chapter#01

Overview of Textile Industry

Overview of the Cotton Textile Industry in Pakistan

Pakistan is the fourth largest cotton producer in the world and third largest cotton consumer. Because of its plentiful, indigenous cotton supply, the textile industry is central to the Pakistani economy as are a source of employment and a source of exports earning. Pakistan's industrialization began in the 1950s with the textile industry at its center. Today, textiles account for 38 percent of total manufacturing and 8 percent of GDP (2008-09). The textile industry employs almost 40 percent (2008-09) of the industrial workforce. Despite the critical role textiles play in the economy, most textile manufacturers are cottage or small-scale industries. Pakistan relies on outside engineering and manufacturing expertise and must purchase most of its equipment abroad. Recognizing the importance of the textile industry to the nation's economy, the Pakistani government began taking steps in 2005 to rebuild the competitiveness of this critical industry.

The industry has 50 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 labor which has experience. Textile industry in Pakistan is facing a persistent decline in cotton production for the last four years while consumption of cotton products is on a rise. India has an increase in cotton production over the corresponding period of time. Pakistan may import as many as two million bales this year as production may be little changed at 12 million bales (2008-09) according to All-Pakistan Textile Mills Association. Pakistan’s cotton cultivation has declined due to several factors ranging from cultivation of traditional varieties and via traditional methods, poor marketing, and failure in making timely payments to cotton producers.

History

The Pakistan textile industry depends on domestic agriculture for the supply of raw materials, thus the success of the cotton crop is critical to the health of the textile industry. Cotton crop accounts for 14 percent (2007-08) of land under cultivation in Pakistan. Pakistan has suffered from a number of cotton failures over the years, beginning in the early 1990s. These crop failures coupled with a market recession drove up the price of cotton and tightened finance regulations and this led to a weakened textile industry.

Introduction

The textile industry is one of the most important sectors of Pakistan. It contributes significantly to the country’s 8.5% GDP in fiscal year 2008-09. It is in fact the backbone of the Pakistani economy.

Contribution to exports, GDP and employment

According to the economic survey of Pakistan 2008-09 the Pakistan textile industry contributes more than 60% to the country total exports, which amounts to around 5.2 billion US dollars. The industry contributes around 46% to the total output produced in the country. In Asia, Pakistan is the 8th largest exporter of textile products. The contribution of this industry to the total GDP is 8.5% (2008-09).It provides employment to 38% of the work force in the country, which amounts to a figure of 15 million. However, the proportion of skilled labor is very less as compared to that of unskilled labor.

Source: www.aptma.com.pk

          www.sbp.pk/20%textile

Sectors of Textile Industry

These are the main sectors of Textile Industry:

Spinning, Weaving, and composite.

Spinning

Spinning is the process of converting fibers into yarn. The fibers may be natural fibers such as cotton or manmade fibers such as polyester. Sometimes, the term spinning is also used for production of manmade filament yarn. Manmade Filament Yarn is synthetic.

Weaving

“Weaving is the process of making cloth by crossing two sets of threads over and under each other”. Weaving sector is one of the most important textile sub-sectors. The exports of woven fabrics and other related woven made-ups form a major portion of textile exports from Pakistan.

Composite

Finishing is one of the chief arts in the textile industry. Finished printed cloth home, bed linen, and apparel. It provides material for readymade, the appearance of the goods is often of first concern and the appearance of rugs, blankets, and other products or any fabric is largely due to the methods of finishing.

Source: www.textile.pk

The processing at composite sectors consists of:

Dyeing

Dyeing clothing and other material is a fairly simple process. It doesn't take a lot of work and the amount of work, it takes often depends on what type of dye you purchase.

Printing

Printing is something through which cloths are printed with different designing and prints.

Pressing

Pressing is to press the cloths.

Fashion Designing

Fashion Designing is the applied art dedicated to clothing and lifestyle accessories created within the cultural and social influences of a specific time.

Fashion Designing (Gents)

Fashion Designing (Ladies)

Fashion Designing (Bed linens)

Fashion Designing (Curtains)

Pakistan is one of the world's largest cotton producing nations. In view of these factors the Pakistan textile industry has enormous potential in the form of raw material, skilled labor and government support. The combination of these elements provides the basis for development of its various segments.

Source: www.aptma.com

Segments: Various segments of the textile industry are:

* Upper stream: Raw cotton and spinning sectors

* Midstream: Weaving and finishing-dyeing (processing) sectors.

* Downstream: Made-ups, readymade garments and knitwear sectors.

Production of cloth

TABLE # 1

PRODUCTION OF Cloth                                                                                  (Million Kg)
Year	Grey cloth	Blue cloth	Total
1997-98	1,151	390	1,541
1998-99	1,154	394	1,548
1999-00	1,276	402	1,678
2000-01	1,336	393	1,729
2001-02	1,385	433	1,818
2002-03	1,469	456	1,925
2003-04	1,473	466	1,939
2004-05	1,770	511	2,281
2005-06	2,006	550	2,556
2006-07	2,039	689	2,728
2007-08	2,156	653	2,809
2008-09	2,238	675	2,913
Source: Textile Commissioner’s Organization, Government of Pakistan

Exports

TABLE # 2

Export of grey cloth
Year	Quantity	Value	Unit Value
	(000Kg)	(000 US $)	($/ Kg)
1978-79	97,929	197,586	2.02
1979-80	99,834	205,860	2.06
1980-81	95,232	207,043	2.17
1981-82	95,621	196,672	2.06
1982-83	134,100	247,317	1.84
1983-84	101,805	217,627	2.14
1984-85	125,856	260,421	2.07
1985-86	157,895	279,176	1.77
1986-87	259,668	506,089	1.95
1987-88	210,950	541,024	2.56
1988-89	291,953	600,847	2.06
1989-90	374,976	833,711	2.22
1990-91	501,072	1,183,040	2.36
1991-92	505,863	1,172,526	2.32
1992-93	555,294	1,121,510	2.02
1993-94	578,648	1,259,285	2.18
1994-95	522,091	1,528,149	2.93
1995-96	535,889	1,540,259	2.87
1996-97	508,188	1,411,519	2.78
1997-98	461,919	1,159,542	2.51
1998-99	421,481	945,169	2.24
1999-00	512,971	1,071,616	2.09
2000-01	545,134	1,076,063	1.97
2001-02	544,217	942,359	1.73
2002-03	519,329	928,358	1.79
2003-04	499,071	1,126,878	2.26
2004-05	504,722	1,056,535	2.09
2005-06	671,697	1,382,874	2.06
2006-07	665,525	1,428,041	2.15
2007-08	554,817	1,300,968	2.34
2008-09	523,790	1,114,821	2.11
Source: Trade Development Authority of Pakistan.

Imports

TABLE # 3

Import of textile Weaving parts                                                                                                                  Quantity : 000 Kg                                                                                                               Value: 000 Rs
Year	Ring Travelers’		Weaving Textile Machines		Weaving Rings		Total
	Quantity	Value	Quantity	Value	Quantity	Value	Quantity	Value
2005-06	148	122,837	516	270,755	214	120,978	878	514,606
2006-07	182	182,811	432	258,343	307	156,544	921	579,698
2007-08	131	304,62	159	198,722	138	66,047	428	560,395
2008-09	226	314,514	357	284,522	181	60,337	764	659,373
Source: Federal Bureau of Statistics, Government of Pakistan.

Main features of the Textile Sector

The domestic market although large and growing at 5 percent per annum consumes only 25 percent of the yarn produced which translates to downstream production. 50 percent 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.

Pakistan produces around 8.5 percent (2008-09) 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 shuttle less looms, additionally over 250,000 looms are in the unorganized 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.

Source: www.wikipedia.com.pk/textile / www.opapers.com/textile

Chapter#02

Historical development of weaving textile Industry

Historical Development of Weaving Textile Industry

Snap shots are given below:

1947-1957

• At the time of independence Pakistan Textile Industry had only 3 textile mills in Quaidabad woolen mills, Harnai woolen mills, and Talpur textile mills. At that time weaving, hosiery and knitwear were features of cottage industry
• Textile contribution rose to 14% of national income in the year
• Development of Pakistan Industrial Development Corporation (PIDC) in January 1952
• Lenient  policy established in giving loans to textile and other industrial sectors
• Significant increase in exports in the weaving textile industry

1957-1967

• Liberal policies were introduced helping textile industries to flourish
• Introduction of Export Bonus Scheme (EBS) and Open General Licensing (OGL) incentives to textile industry
• Inflow of foreign aid channeled for industrial development
• Export of cotton increased from 8.32 to 35%
• Cheaper imports of textile machineries made possible by GOP
• Rate of growth of manufacturing output of weaving textile was 5.9%
• Growth rate of total factor of production in weaving textile manufacturing was 5.27%

1967-1977

• Rate of growth of manufacturing output of weaving textile was 8.7%
• Nationalization of all basic industries including textile
• Export bonus scheme was abandoned
• Decreased in cotton production due to adverse weather cycle, destroyed cotton crops at large

1977-1987

• Denationalization of weaving textile industry
• Growth rate of output of textile was 8.6%
• Growth rate of labor in textile was 1.5%
• Growth rate of capital stock in weaving textile was 9.4%
• Growth rate of total factor productivity in weaving textile was 3.1%
• Annual growth rate of value of output in weaving textile was 8.8%
• Export-led industrialization providing concessions to the weaving textile industry at large

1987-1997

• Gross output of weaving textile and clothing was Rs.76.90 million per unit and Rs.0.38 million per worker
• Labor productivity in weaving textile was 257.15 and capital productivity was 151.3 percent
• Average percentage of share in investment in weaving textile was 28.79%
• Average industrial production in weaving textile sector was 18.76%.
• Liberalization of trade and exchange system.
• Gulf war: the 1990-91 Middle East crises put additional pressure on Pakistan’s external current account position. In 1992/93, widespread floods and plant diseases affected Pakistan.
• Weaving based manufactures account for about 60% of merchandise exports.

1997-2010

• Government by General Pervaiz Musharraf affected weaving textile industry.
• Significant changes to the general sales tax (GST) on industrial sector including textiles.
• Import duty/sales tax concession applied to foreign made machinery/equipment, or temporarily subsidized sales.
• Total weaving textile export US $ 5.15 billion.
• Total investment of US $ 3.1 billion.
• Closing down of 50 weaving textile mills in may 2007 including 20 mills being member of APTMA.
• On December 31, 2008, Double edged shutdown of gas and electricity has crippled the textile exports and industry.
• On July 24, 2009 President of Pakistan has urged the textile industry to generate electricity through small power projects (SPPs) to save the industry from a total collapse due to ongoing load shedding.
• For budget 2010-11 All Pakistan Textile Mills Association (APTMA) had prepared a based report for the federal government in which it has been projected that the textile industry exports would cross over $16 billion compared to its present level of around $8 billion.

   Source: www.dawn.com.pk , www.nationsencyclopedia.com

              www.wikipedia.com , www.sbp.pk/textile ,   

Chapter #03

Companies’ Profiles

Introduction to companies’ profile

The companies which we have selected are,

Al-Karam Textile Mills

Yunus Textile Mills

Nakshbandi  Textile Mills

Blessed Textile Mills

Al-Karam Textile Mills

Company Profile

Al-karam group’s history dates back two generations. Al-karam is the pioneers of the textile industry of Pakistan. New life was injected into the dismantled factory, which is in 1986, was called the Adamjee cotton mills. Since then the company has grown into a full scale textile factory equipped with skilled employees and modern technology. Short lines of communication coupled with quick decision taken by managers and European and U.S marketing proved to be a successful combination.

Board of Directors

• Mr. Ibrahim Haji Karim
• Mr. Umer Haji Karim
• Mr. Anwer Haji Karim
• Mr. Yaqoob Haji Karim
• Mr. Iqbal Haji Ibrahim
• Mr. Sajid Haji Haroon
• Mr. Afzal Umer

Al-karam services include

• Fiber manufacturing
• Spinning
• Weaving
• Knitting
• Dyeing and printing of woven and knitted fabrics Designing
• Cutting and Stitching

With a constructed area of over one million square feet, Al Karam has the capacity to fulfill small, medium and large scale orders. Al-karam is one of the few vertically integrated operations in Pakistan, offering a diversified range of products, their customers can mix and match from a wide variety of print, yarn dyed, solids, dobby and jacquard. Al-karam also deals in twill, sateen, basket weave and percale, knitted to woven fabric and thread counts ranging from 130 to 1000.

Al Karam also provides their customers with complete in-house design solutions. Al-karam creative center is equipped with state of the art designing and sampling equipment and skilled textile artists.

In an industry where deadlines are a way of life, Al Karam is proud to have a proven track record of service quality and on-time delivery. For customers convenience Al-karam maintains a comprehensive order tracking system, so customers can stay on top of their order at all times.

Some of Al Karam’s strengths include:

• It is one of the largest producers of fashion and basic bedding
• Compliant with international quality, social and environmental standards
• Largest yarn dyed manufacturer in Pakistan
• Largest high thread count jacquard installation in Pakistan
• Latest technology at every stage of manufacturing
• Wider Width Weaving
• Leading exporter of bed linen to the USA for the last 2 years (2008 & 2009)
• Capable of providing LDP and EDI services

PRODUCTS

YARN:

• COTTON
• POLYESTER
• ORGANIC
• BAMBOO
• TENOIL
• 100 VISCOSE
• POLYESTER FILAMENT
• MODEL YARN

HOME TEXTILE

• BEDLINEN
• CURTAINS
• KITCHEN ITEMS
• FABRIC

APPAREL

• PAJAMA SUIT
• SLEEPERS
• GOWNS
• BABY SUITS
• LADIES TOPS
• POLO SHIRTS

Weaving Capabilities

• The largest producer of yarn dyed fabric in Pakistan
• The largest Jacquard producer in Pakistan
• Fabric includes 100% cotton, polyester blend, reverse blend and special fiber blends
• Producer of high thread counts – up to 1000
• Producer of twills, drills, sateen, and textured fabrics
• Simultaneous and multiple weft insertion capability
• Looms are equipped with 4-color weft insertions and dobbies
• Benniger, Sizing machines, with 28 beams and 4 meter head
• Benniger, Warping creel up to 1200 ends
• Latest information technology tools to monitor daily production
• All fabric produced goes through quality control on American 4-point system

  Products

• Griege fabric
• Yarn dyed fabric
• Dobby
• Jacquard

TECHNOLOGY

Water Treatment Plant

• Wastewater sampling and testing
• Determination of pollution load generated by the industry
• Determination of wastewater flow and characteristics for the design
• Evaluation of treatment alternatives and selection of most suitable treatment scheme
• Process and hydraulic design of selected treatment scheme
• Treated wastewater to comply with national environmental quality standards
• The plant is designed to comply with all discharge requirements

Air technology to generate electricity

When the company was formed in 1986 it was dependent on the National Grid to fulfill its power requirements, and conventional boilers were fired to generate process steam.

In 1988, 6 gas engines were installed to make Al-Karam meet its additional power needs. Then in 1992, Al-Karam opted to install its own in-house co-generation plant that would serve as a stable and reliable on-site source of electric power and process steam. This also substantially reduced its energy cost. This was done by installing two 3.3 MW Solar-Caterpillar gas turbines and a 17 tons/ hour Waste Heat Recovery Boiler.

In 2006, Al-Karam upgraded its gas engines with four 1.5 MW Caterpillar Gas Engines and two 2.5 ton/ hour duplex waste heat recovery systems placed at the exhaust flue of the generators.

In 2007, on an experimental basis, Al-Karam brought a part of the hot flue gases of the gas turbines to one of the stenters in the Finishing Unit at 135 degrees centigrade. In rupee terms, there was a saving of Rs. 2.4 million/ year/stenter.

During late 2008, with the help of the government of Pakistan and the German Ministry for Economic Cooperation and Development, Al-Karam participated in the Pakistan-German Renewable Energy and Energy Efficiency Program (REEE).

Source: www.al-karmtextile.com.pk

          www.aptma.com/al-karam-textile

Yunus Textile Mills

Yunus Textile Mills Limited (YTM) is a vertically integrated textile mill located in Karachi, Pakistan. The company, with annual production capacity of 100 Million meters, is the largest exporter of Home Textile products from Pakistan. In addition to manufacturing, YTM also provides its customers design and distribution services with offices based in USA, France, Spain, United Kingdom and Canada.

Yunus Textile Mills Limited started its operations in 1998 and within a short span of time became Pakistan’s largest exporter of Home Textile products. In this short time frame, the company has transformed itself from a supplier of basic bedding products to a world renowned supplier of Home Textile Products to top tier retailers and brands across United States and Europe.

Vision Statement

To provide the most compelling value proposition to the customers in terms of quality, service and cost effectiveness as well as fulfilling responsibilities as a responsible corporate firm.

Mission Statement

• Our mission is to give customers a competitive advantage through superior products and services at best prices.
• To meet and exceed customers' expectations of service through timely communications and quality information.
• Provide competitive prices and genuine products to our clients.
• To promote international textile trade.

Company Profile

Headquarters		Pakistan
Industry		Textiles
Type		Public Company
Status		Operating
Company Size		4,000 employees
Founded		2000
Website		http://www.yunustextile.com

Products

• Bed & comforters
• Curtain & draperies
• Cushions & pillows
• Kids zone
• Duvet cover sets

Source: http://www.yunustextile.com

Nakshbandi Textile Mills

Introduction

The positioning statement of Nakshbandi is “setting unmatched standards in quality”. That's the Nakshbandi trademark. Specializing in terry towels and other textiles, at Nakshbandi Industries Ltd. we produce merchandise primarily for the export market. Supplying to countries; USA, Europe, Sri Lanka, UAE, Morocco, Jordan, Nepal, Guatemala, Tunisia, Vietnam and Bangladesh.

Products
Towels, Towel Mfrs. & Exporters

Since its inception, Nakshbandi has played a dominant role in towel weaving, processing and towel made ups. From bathrobes and kitchen towels to stripes and jacquard, Nakshbandi also specializes in pure white institutional towels, under the brand name Seagull. Solid colors, geometrics or florals the Nakshbandi towels are tailor made to your specifications.
Nakshbandi also takes care to use only environment-friendly dyes and machinery.
In an effort to provide our clients with the best possible product, we are currently in the process of expanding our laboratory facility.

MISSION STATEMENT

The mission is to manage and operate the Company in a manner that allows continued growth and profitability without high risk for investors, customers and employees. By offering quality products to our customers, by constantly striving to improve its products to meet or exceed the customers’ needs, allowing us to prosper as a business, and to provide stable, secure income and employment for our employees and a reasonable return for the stake holders, the owners of the business.

VISION STATEMENT

The future of the Industry will be characterized by tough competition. In future, it will be constrained by tough and sluggish market and rising cost but even then it will strive hard to be able to make profit and thus create value for the stake holders and continue as a successful company.

Company profile

Chairman	Mr. Khaleequr Rahman
CEO	Mr. Rehan Rahman
Business Type	Exporter
Buyer or Seller	Seller
Number of Employees	1500
Company Type	Public Limited
Year Established	1972
Contact Information	Contact Person
Nakshbandi Industries Limited H-23/4A, Scheme No. 3, Landhi Industrial Area, Landhi, Karachi-22 Pakistan, Karachi 74000, Sindh, PakistanPhone: +92-21-5083641Email: info@nakshbandi.com URL: http://www.nakshbandi.com	Mr. Muhammad Asif Teli Phone: +92-21-5083641Email: info@nakshbandi.com

Since its formation in 1972, Nakshbandi Industries has expanded its product line to include two distinct sections: cotton terry towels and cotton and polycotton fabrics. Their mission is to provide their clients, complete satisfaction in every regard. That’s why they treat each customer as individuals – each with unique requirements and aspirations. Their success can be gauged by ever expanding client base, Nakshbandi maxim: total commitment to quality and no compromises.

Nakshbandi forward looking marketing strategy promises both international expansion and profits. Nakshbandi comprises a team of dedicated and highly trained professionals committed to taking the company to unparalleled heights. Strict quality control policies and measures are in force to ensure a standard of unsurpassed distinction.

Product division

Retail towels

BEACH TOWEL

KITCHEN TOWEL

ACCESSORIES/ROBES

BATH ROBES

SLIPPERS

INSTITUTIONAL TOWELS

PRODUCTION SUMMARY OWN (IN TONS)

Year Ended June/September 30,

2009              2008          2007           2006              2005                2004

4,123.00        3,910.00     3,275.00    4,666.00          3,664.00            4,979.00

ISO 9001:2000 Certification:

Upon successful completion of three years certification under ISO 9002:1994, Nakshbandi is certified to ISO 9001:2000 by UKAS and ANSI-RAB, thus reflecting the rapport of being second to none, in quality race.

Source: http://www.nakshbandi.com

          www.sbp.com-textile/nakshbandi

BLESSED TEXTILE

Umer Group’s weaving mills feature 514 air-jet weaving machines from Japan and Belgium. Greige fabrics – produced for sheeting, denim and apparel – range from 170 centimeters to 340 centimeters in width. The weaving mills produced over 6 Million meters of fabric monthly. One of the associated companies Firhaj Footwear has the exclusive manufacturing license of Hush Puppies International USA and the distribution license of Caterpillar in Pakistan. Umer Group of companies currently employs more than 6,000 people. Umer Group of Companies recognizes the importance of expanding its business all the time. It is always on the lookout for new ideas and possibilities, are involved in the research and development field. Looking to expand its outlook, the Umer group of Companies is aggressive but most importantly diligent in fully researching and testing the markets before entering a new field.

Blessed Textile Ltd. is situated in Ferozwatuwan, Sheikhupura next to Faisal's Weaving Units. The preparatory process consists of latest versions and models including sectional warping. This Weaving Unit is also capable of producing variety of construction of Woven Fabrics.

They have a separate research and development department having 340 CM Loom exclusively meant for R&D. This Loom is constantly engaged in new developments. This is a new concept for the first time in Pakistan. Our R&D department has been helpful in developing new products.

Company Profile

Company Name:	Blessed textile
Business Type:	Manufacturer
Production capacity	514 air-jet weaving
Production	6 Million meters of fabric monthly
Product/Service	Yarn and cotton production
Address:	Ferozwatuwan, Sheikhupura
Number of Employees:	Above 6000 People
Company Website :	www.umergroup.com/Textile/Blessed

Vision statement

While keeping fundamentals correct we shall build upon our recognition as a very good company known and established for our principled and honest business practices and higher quality standards with niche products and specialty items with a sustained growth in our capacities.

Mission statement

They are committed to the higher expectations of the customers and strive for the production of best quality yarns for high value products.

Some of major customers of their fabrics are

• Nike
• Wall Mart
• J. C. Penny
• CGA
• HGM

YEAR WISE OPERATING DATA WEAVING UNIT

Year	2009	2008	2007	2006	2005
Number of looms installed	133	131	131	111	111
Number of Shifts worked per day	03	03	03	03	03
Installed Capacity at 50 picks per inch of  fabrics (sq.metersbasedon365days)	17,483,076	13,469,017	14,693,440	14,693,440	--
Actual Production converted at 50 picks  per inch of fabrics (sq.metersbasedon365days)	29,552,819	17,530,200	22,719,848	17,813,143	--

TABLE # 4

www.umergroup.com/Textile/Blessed

Weaving unit source

TABLE # 5

WIDTH		NO OF LOOMS	TYPES OF LOOMS	REMARKS
CM	INCHES
340	134	1	R & D	SAMPLING / R & D
340	134	6	JACQUARD	STAUBULY MODEL: LX-1600
340	134	4	JACQUARD	STAUBULY MODEL: LX-1601
280	110	6	DOBBY [16 SHAFTS]	WITH FOUR COLOR FACILITY
280	110	4	POSITIVE CAM	LOOMS WITH 10 SHAFTS
340	134	18	DOBBY [16 SHAFTS]	WITH FOUR COLOR FACILITY
340	134	10	POSITIVE CAM	LOOMS WITH 10 SHAFTS
340	134	82	POSITIVE CAM	LOOMS WITH 07 SHAFTS
TOTAL		131

Chapter#04   

Weaving Manufacturing Process

WEAVING MANUFACTURING PROCESS

The weaving process interlaces the warp, which are the length-wise indigo dyed yarn and the filling, which are the natural-colored cross-wise yarn. The warp thread is in the form of sheet. The weft thread is inserted between two layers of warp sheets by means of a suitable carrier, such as Shuttle, Projectile, Rapier, Air current, Water current, etc. The selection of carrier depends upon the type of weaving machinery used. The two different technologies available for weaving machines are - Conventional Shuttle Weaving System which is done by Ordinary Looms or Automatic Looms; and the Shuttle less Weaving System which is done by Air jet, Water jet, Rapier, or a Projectile weaving machine. The Conventional Shuttle loom results in lesser production due to slow speed and excessive wear and tear of machinery. As such, now denim is generally woven through Shuttle less Weaving System namely, Air jet looms, rapier looms or projectile looms.

Weaving-fabric manufacture

The weaving process uses a loom. The length way threads are known as the warp, and the cross way threads are known as the weft. The warp which must be strong needs to be presented to loom on a warp beam. The weft, passes across the loom in a shuttle, that carries the yarn on a pirn. These pirn are automatically changed by the loom. Thus, the yarn needs to be wrapped onto a beam and onto pirn before weaving can commence.

Winding

After being spun and plied, the cotton thread is taken to a warping room where the winding machine takes the required length of yarn and winds it onto wrapper’s bobbins.

Warping or beaming

 A Warper

Racks of bobbins are set up to hold the thread while it is rolled onto the warp bar of a loom. Because the thread is fine, often three of these would be combined to get the desired thread count.

Sizing

Slasher sizing machine needed for strengthening the warp by adding starch to reduce breakage of the yarns.

Drawing in, Looming

The process of drawing each end of the warp separately through the dents of the reed and the eyes of the healds, in the order indicated by the draft.

Pirning (Processing the weft)

Pirn winding frame was used to transfer the weft from cheeses of yarn onto the pirn that would fit into the shuttle

Weaving

At this point, the thread is woven. Depending on the era, one person could manage anywhere from 3 to 100 machines. In the mid nineteenth century, four was the standard number. A skilled weaver in 1925 would run 6 Lancashire Looms. As time progressed new mechanisms were added that stopped the loom any time something went wrong. The mechanisms checked for such things as a broken warp thread, broken weft thread, the shuttle going straight across, and if the shuttle was empty. Forty of these Northrop Looms or automatic looms could be operated by one skilled worker.

A Draper loom in textile museum, Lowell, Massachusetts

The three primary movements of a loom are shedding, picking, and beating-up.

• Shedding: The operation of dividing the warp into two lines, so that the shuttle can pass between these lines. There are two general kinds of sheds-"open" and "closed." Open Shed-The warp threads are moved when the pattern requires it-from one line to the other. Closed Shed-The warp threads are all placed level in one line after each pick.
• Picking: The operation of projecting the shuttle from side to side of the loom through the division in the warp threads. This is done by the over pick or under pick motions. The over pick is suitable for quick-running looms, whereas the under pick is best for heavy or slow looms.
• Beating-up: The third primary movement of the loom when making cloth, and is the action of the reed as it drives each pick of weft to the fell of the cloth.

The Lancashire Loom was the first semi-automatic loom. Jacquard looms and Dobby looms are looms that have sophisticated methods of shedding. They may be separate looms, or mechanisms added to a plain loom. A Northrop Loom was fully automatic and was mass produced between 1909 and the mid 1960s. Modern looms run faster and do not use a shuttle: there are air jet looms, water jet looms and rapier looms.

Measurements

• Ends and Picks: Picks refer to the weft, ends refer to the warp. The coarseness of the cloth can be expressed as the number of picks and ends per quarter inch square, or per inch square. Ends are always written first. For example: Heavy domestics are made from coarse yarns, such as 10's to 14's warp and weft, and about 48 ends and 52 picks.

Associated job titles

• Piecer
• Scavenger
• Weaver
• Tackler
• Draw boy
• Pirner

Source: www.ktron.com/industries

           www.wikipedia.com/textile-weaving/manufacturing

            

Chapter#05

PEST ANALYSIS

WEAVING PEST ANALYSIS

Political factors

Uneven political conditions, deteriorating law and order situation and instability in gas and electricity are adversely affecting the textile sector, while government has hardly taken any step to give some relief or incentives to the mill owners. Textile mill owners and exporter have strongly denounced the recent 31% increase in the gasoline prices and demanded from the government to withdraw the recent increase and take serious steps to help weaving industry survive through difficult times. According to the sources, if prices continue to increase at current rate, the weaving sector would find it difficult to survive as the recent increase has already proven deadly and many mills have started shutdown in the wake huge price increase. It was also witnessed that due to prices increase in gas has not only adversely affected the productivity of the weaving industry but has also caused sudden increase in the production cost and has badly affected the economy of the country. On the other hand, weaving sector and the other exporters also facing a lot of challenges due to increase in the production cost of the specific export goods, while such hurdles badly affected the Pakistani exporters to meet the challenges and compete in the local and international markets. Exporters are demanding that government should give them facilities to cope with the existing challenges and not get involved in favoritism. The main political factors which are attracting the industries and as well as for the whole world are:

• Musharraf’s seat
• Arrested judiciary
• Benazir Bhutto murdered

The murder of Benazir Bhutto was infuriated matter. Number of people came out with a great anger and numbers of textile companies were burnt, just like in Karachi happened. The other issue was neat and clean elections of 2008. No doubt that election were being held neat and clean but the opposition did not accept the results and new government is still trying to control the factors which are creating disturbances. As it is mentioned above that the government of Pakistan increased the price of gasoline and petroleum, which are the basic needs for the weaving industries. In July 2008, the textile companies in Faisalabad shutdown their companies against the 31% increments in prices of gasoline, also increased the petroleum prices by 10 rupees. Still no satisfied procedure has been implemented by the government of Pakistan. Tight monetary policy also creates a lot of hurdles for weaving sector and exporters, and rapidly growing interest rates of the banks is causing the shut down the power looms, while they demanded withdrawals of 10% withholding tax immediately for the survival of the weaving sector of Pakistan. Then again, the government is failed to decrease the everyday increasing trade deficit. Weaving sector of Pakistan contributes huge amount in the economy of the country serious measures are needed for its revival.

Economical factor

Economical factors are also disturbing the all industries of Pakistan as well as the weaving industry. From 1999 to 2008, the inflation rate has increased by 100%. The last and current Government has been failed to control the economy. As the prices have increased, the suppliers try to get and save more profit from their investments. That’s why prices are decided and put with a high return in terms of profit.

Before 2008, textile industry was getting number of incentives from the government just like R&D (Research & Developments) and subsidies on the utilities. However, some companies misused these opportunities and unfortunately, Govt. pulled back these incentives. The main problem with the Weaving industry is shortage of electricity, gasoline and petroleum, due to which weaving industry is bearing too much cost that why they have to increase their prices to earn profit or for break –even. There are some companies, which have their own electricity plants but they have to spend a lot of money to run. Other problems that are facing by the weaving industry of Pakistan are

• Not availability of skilled labors.
• Labors cost is increasing rapidly
• Loosing quality of its products in both markets domestically and internationally
• Poor monitory and Fiscal policies of the Govt. of Pakistan
• Non-availability of textile professionals
• Investors are pulling out their capital from the market quickly
• Foreign investments are not coming towards Textile industry.

These factors are disturbing the textile industry strongly economically.

Social Factor

Social factors that affect the Pakistan textile weaving industry are:

• Child labor
• Low wages
• Sweatshops

Due to increase in inflation, it is not possible for a textile firm to hire skilled labor because hiring a skilled labor is very costly and therefore they prefer to hire children and they also give low wages or sometimes they do not give wages to them because they know children will not argue. Whereas, the existing labor also gets low wages around 25 to 30 cents an hour. In contrast, the working conditions are also disgusting. It causes much harm to workers.

Technological Factor

The technology has been improved and updated in the weaving industry of Pakistan and some of the companies in textile industry are acquiring these technologies. By using new technology not only, they improve their quality and efficiency but also improve their production as well as reducing the cost of production. However, most of the companies are facing problem of BMR and R&D. this problem is being faced by Pakistan weaving mills because of high cost for replacing the obsolete technologies. Research and development has played a key role in Pakistan textile weaving industry, but unfortunately nowadays lack of R&D results in the low quality of cotton as well as low profitability in cotton crops therefore farmers are shifting to other crops.

Sources:

www.aptma.org.pk

www.sbp.gov.pk/textile-pest

Chapter#06

Porter Five-Forces Model Analysis

Porter’s Five-Forces Model Analysis

APPLICATION OF PORTER’S FIVE-FORCES MODEL ON THE WEAVING INDUSTRY

Michael E. Porter provided a framework that models an industry as being influenced by five forces. It is important to analyze the ability of the firms to deal with these outside forces because the collective strength of these forces determines the ultimate profit potential in the industry.

Figure: PORTER'S FIVE FORCES MODEL

Rivalry among existing firms

Rivalry among existing firms in weaving industry in Pakistan is high or intense. This is due to the following reasons:

The weaving industry had a rapid and inclining market growth in the past five years. This causes the firms to fight for market share, thus increasing the rivalry.

There is tremendous growth noted from the last five years in weaving industry because the exports of weaving products increased very much, this gave firm chance to earn high profit and grow in the business.

There are many manufacturers in weaving industry that’s why competition is high.

Product differentiation is low in weaving industry that’s why the majority of consumers are buying low-cost products whichever brand it might be. This causes higher levels of rivalry among the firms, but there is also a significant amount of brand recognition in the top small portion of the industry.

Threat of new entrants

In the weaving industry there are several barriers that make difficult for firms to enter into the market. Some of these are listed below:

The existing companies like Gul Ahmed Textile, Al Karam Textiles, and Nishat Textiles are investing high capital in research & development and technology in order to create new innovative products. So, the new entrants have to face high capital investment.

Most of the companies approach then customers directly by opening their outlets in shopping areas. It helps them to build brand recognition among the customers. So, the new entrants need time to establish their brand image in the market.

In order to reduce costs, manufacturers have to be up-to-date with the latest technology. Currently, the top weaving textile mills like Gul Ahmed, Nishat Textiles and Yunus Textile mills (YTM) are equipped with good machinery to manufacture the product. These machines help keep the costs low, which helps them in competing against low-cost overseas manufacturing and new entrants.

Consumers are interested towards low-cost products. This shows that the majority of the consumers are willing to pay no or very low switching costs for a higher value product. This creates another barrier for new entrants.

In the current political and economic conditions of Pakistan it is not easy for a new entrant to establish the business.

Bargaining power of buyers

The weaving industry has high bargaining power of buyers because the number of low-cost manufacturers is more than the number of buyers. The reasons for high bargaining power of buyers are:

Stores like Zubeda’s and Habbit are going for backward integration as they are manufacturing their own products by cutting the middlemen. It helps them to create their own brand name.  So these brands get an opportunity to sell their products at low price.

Any retailer/buyer can always switch to a lower cost supplier for the same product this shows that the switching cost is low in industry.

There are many manufactures who offers the same products in same quality but in different price. Now it depends on the buyer whether it is price sensitive or brand conscious.

Bargaining power of suppliers

The bargaining power of the suppliers is low or weak for the weaving industry due to the following reasons:

The number of manufacturers is high and the demand in the market is also high that’s why switching cost is low for the suppliers because the products are almost standardized.

Weaving mills like AL-KARAM Textile mill, Gul Ahmed and Afroze Textiles are going for forward integration as they sell their products in their own outlets or stores.

Threat of substitutes

Threat of substitute products in the weaving sector is very low because,

There are no alternatives available for the weaving products.

There are no potential substitutes for weaving products.

www.wikipedia.com.pk

www.oppapers.com

www.scribd.com/textile

Chapter # 07

Impact of WTO on Textile Industry

GOVERNMENT INITIATIVES FOR PAKISTAN Weaving TEXTILE INDUSTRY

Impact of WTO on Textile Industry

• Pakistan’s main trade policy instrument remains the tariff, an increasingly important source of tax revenue, accounting for about a 5th of total. Virtually all tariffs (99.4%) are ad valorem (2008-2009), there are 29 different applied rates.
• Pakistan seemingly applies transaction value and WTO customs valuation rules. Minimum values no longer exist, except on imported machinery parts under customs “take over” provisions.
• The import on used machinery and equipped has been relaxed. According to the authorities, imports from Israel (but not exports) remain prohibited but those from India are progressively been allowed. Certain imports eligible for tariff exemptions / concession require ministerial or other approval, and import quota apply to some of these goods e.g.: certain chemicals and refrigerated trucks. Resources to anti-dumping action have increased.
• Domestic sales and excise taxes discriminate against imports in some cases, including favoring local content. Instead of income tax, importers pay income withholding tax of up to 5% (reduced from 6% in the 2008-09 budget) levied on the imports tax and tariff-inclusive price, effectively and additional import tax.
• Exports requirements have been eased, although contacts for cotton and urea must be registered. Mandatory minimum export prices were removed on crops in 2007-08 and subsequently on cotton yarn.
• Pakistan reduced tariffs zero on a number of items in the 2008-09 budget, it intends to take further unilateral tariff reforms to eliminate anti-export bias and to encourage export –led growth.
• Reduction in 2008-09 primarily reflected the introduction of zero rates on 5.8% of tariff lines and reduced or eliminated rates on raw materials, parts and components used in manufacturing.
• Continuous reduction in the rates of custom duties, coupled with a fast track elimination of the exemptions regime.
• Going up the value chain through proper supply-chain management and on-shore capacity development of the exporting enterprise.
• A focused program for the development of small and medium enterprises.
• The tariff reduction and the consequent correction of anti-export bias, with drawl of subsidies, stable exchange rate, and an effective elimination of rent.
• Duty concession agreed to with European Union is applicable on a Most Favored Nations (MFN) basis and our tariff bindings have already been notified to the WTO.
• Each party would integrate into the General Agreement On Tariffs & Trade (GATT) products from the specific list in the agreement which accounted for not less than 16% of its total volume of its imports 1990. Integration means that trade in these products will be governed by general rules of GATT.
• All members shall take such actions in the area of textiles and clothing as may be necessary to abide by GATT rules and disciplines so as to improve market access, insure the application of policies related to fair and equitable trading condition, and avoid discrimination against imports win taking measures for general trade policy reasons.
• A number of member countries have brought out the anomaly in respect of 91 items where our applied rates exceed the bound rates.
• In order to facilitate the integration of textiles and clothing sector into GATT 1994, members should allow for continuous autonomous industrial adjustments and increased competition in their markets.
• Under-developed country members shall be accorded treatment significantly more favorable than that provided to other groups of member’s referred to in this paragraph, preferably in all its elements but at least on over all terms.
• Members whose total volume of textile and clothing exports in small comparison with the total volume of exports of other members and who account for only a small percentage of total imports of that product into the improving member shall be accorded differential and more favorable treatment in the fixing of the economic terms.
• Avoid discrimination against imports in textiles and clothing sector when taking measures for general trade policy reasons.

http://wto.com/pakistan.pdf

GOVERNMENT INITIATIVES FOR PAKISTAN TEXTILE Weaving INDUSTRY

During the past five years (2004-09), the government announced and implemented the following important initiatives to support the textile weaving industry.

(01) For Reducing Cost of Doing Business

 Long Term Financing of Export Oriented Projects (LTF-    EOP)

The State Bank of Pakistan announced this scheme at the initiative of the Ministry of Commerce. It provides concessionary long-term project finance to export oriented enterprises since May 2004 for import of machinery for various projects. The interest rate is around 7.5% - repayable in seven years, against the normal rate of 12-13%.

Relocation of Industries

The government shares 50% of the cost for relocation of export-oriented industry to Pakistan. This includes freight expenditure, machinery/equipment transfer cost, wharf age and handling costs, inland transport, offloading, insurance, and agency charges.

Freight subsidy

Considering the high freight costs from country’s ports to export destinations, it was decided to share some of the burden with exporters. This scheme provides 25% freight subsidy for designated products and countries.

Sales Tax Facilitation for Export Sectors

Sales tax on textile machinery and on most raw materials, intermediaries and finished goods has been zero-rated.

Reduction of import duties on machinery

Custom duties on import of textile related machinery has been reduced gradually since 2006- 2009. Presently import duty levied on textile machinery rages from 5% to 25%.

(02) For Marketing and Business Facilitation

Expo Pakistan

Pakistan has a wide range of quality products, which can find markets globally. To show these products, an annual event is held at Expo Centre in Karachi since 2005 to display Pakistan’s products. A similar Expo centre is now nearing completion in Lahore and centers are planned for Islamabad, Peshawar and Quetta.

Retail Sale Outlets

Under this scheme, Pakistani companies with their own brands are wishing to open their own retail outlets abroad are provided financial support.

(03) For Infrastructural Development

Special Export Zones

A Special Export Zone is being set up at Karachi called the Textile City. This zone would have modern infrastructure like water supply, sewerage, self-power generation and effluent treatment plants. This zone will be focusing on the textile sector particularly on spinning, dyeing, processing and finishing.

Contamination Free Cotton

A training Institute is being established with funding from the Export Development Fund for training farmers and ginners in production of contamination free cotton. Quality control standards are being developed for cotton, and a research centre is being established at Rahim Yar Khan for development of quality cotton.

(04) For Compliance Facilitation

In-house Effluent Treatment Plant

Export oriented enterprises in order to meet the requirements of foreign buyers, can establish in-house Effluent Treatment Plants, by importing them at 5% duty only even if such plants are produced locally. The raw material required for them is importable duty free. The first 6% mark-up cost of loans obtained by existing units for establishing such plant is picked up from the Export Development Fund (EDF).

Source: Pakistan textile journal, business recorder

www.dawnnews.com/textile

Chapter#08

Context Analysis

                              (01) Trend Analysis

                              (02) Competitor Analysis

                              (03) Swot Analysis

Trend Analysis

(01)  SOCIAL TREND

The social trend in the textile industry is unbearable. It hires small children for work and gives low wages to them. The working in weaving industry for children is very dangerous because of toxic fumes and waste materials.

(02)TECHNOLOGICAL TREND

In Pakistan, textile-weaving industry needs to modernize its technology and machines because due to obsolete machinery the productivity and efficiency has reduced to a great extent. Therefore, they must look on the ways to modernize their technologies and try to encourage BMR and research and development.

(03) ECONOMICAL TREND

Rise in the inflation has badly affect Pakistan textile weaving industry. Rise in cotton prices made it difficult for farmers to cover their cost and that’s why they are shifting to other crops. Shifting of farmers cause weaving mills to purchase raw cotton from different parts of country or other countries at high prices. As government of Pakistan is not able to control the prices therefore, it impacts its exports and imports. The other economical trend was the shortage of power. Due to shortage of energy / power, the manufacturing process is being stopped and it creates difficulty in meeting its orders.

(04) ENVIRONMENTAL TREND

Textile weaving industry is creating lot of pollution in the environment, which is harmful for both workers as well as people. The waste material like fibers, cotton balls, yarns etc thrown in lakes, rivers. These contain toxic materials like dyes, colors and other substances, which may cause skin cancer. There is no proper wastage or sanitation system. Huge machines of textile weaving industry also create noise pollution that can cause ear disease to an employee.

(05)POLITICAL TREND

Government policies have also affected productivity of Pakistan weaving sector in many ways. Government has increased sales tax and custom duty for exports and imports of weaving products. Uncertainty and instability in law and order situation is also responsible for low efficiency in this sector.

Source: www.statpak.gov.pk

       www.opapers.pk

      www.finance.gov.pk

COMPETITOR ANALYSIS

Pakistan textile weaving industry has competition with the local and international market.

In the local market, competition is between these firms:

• Nakshbandi textile

• Nishat textile
• Al-karam textile
• Al-Abid textile  
• Saphire textile
• Yunus textile
• Yusuf textile
• Chenab textile
• Gulistan textile
• Gul-Ahmad

In international Market:

• China  
• India  
• Indonesia
• Bangladesh
• Uzbekistan
• US
• Others

Source: www.aptma.org.pk

          www.tmt.com/textileanalysis.pdf

SWOT ANALYSIS

STENGTHS

WEAKNESSES

Textile constitutes the single largest industry in Pakistan Employees 39% of the total workforce of Pakistan population (2009-2010) Accounts for the 46% of the total manufacturing (2009-2010) 11% of total GDP of the Pakistan(2009-2010) 60% of the total Pakistan exports Vast unionization in the industry Abundant raw material availability Low cost skilled labor Presence across the value chain Growing domestic & international market Reduction in poverty level Impressive growth Reduced lead-times

Cost competitiveness Technological obsolescence Sharp increase in prices of raw material In-efficiency in utilization of development expenditures High administrative cost Concentration of exports in restricted items & markets High cost of doing business Energy crises Failing infrastructure Wide spread corruption Production of counterfeit goods

Opportunities

Threats

Relaxation in January 2005 of the WTO’s multi-fiber agreement, which regulates the global textile trade, will provide Pakistan with an opportunity to boost exports Research & development (R&D) and product development The local textile industry is competitive enough to prosper in a free trade environment Foreign direct investment (FDI) in the sector Investment in latest technology and machineries Selling off state-owned assets

Political uncertainty Severe of corruption High global oil prices Competition in domestic market Ecological and social awareness Competitor’s behavior New entrants in the sector

Source: www.textilewolrldAsia-Pakistantextile   

          www.wikipedia.org

CHAPTER#09

Issues In Pakistan Textile Weaving Industry

Issues in Pakistan Textile Weaving Industry

There are number of issues that the Pakistan textile weaving industry is currently facing.

Lack of Research & Development

The lack of research and development (R&D) in the textile industry of Pakistan has resulted in low quality of cotton in comparison to rest of Asia. Because of the subsequent low profitability in cotton crops, farmers are shifting to other cash crops, such as sugar cane. It is the lack of proper R&D that has led to such state. They further accuse cartels, especially the pesticide sector, for hindering proper H&D. The pesticide sector stands to benefit from stunting local R&D as higher yield cotton is more pesticide resistant.

Lack of Modernize Equipment

Moreover, critics argue that the weaving textile industry has obsolete equipment and machinery. The inability to timely modernize the equipment and machinery has led to the decline of Pakistan textile competitiveness. Due to obsolete technology the cost of production is high in Pakistan as compare to other countries like India, Bangladesh & China.

Increase Cost of Production

The cost of production of textile rises due to many reasons like increasing interest rate, double digit inflation & decreasing value of Pakistani rupee. The above all reasons increased the cost of production of textile industry which create problem for a textile industry to compete in international market.

Internal Issues Pose a Larger Threat for Pakistan’s Textile Industry

Pakistan’s textile industry is going through one of the toughest period on decades. The global recession which has hit the global textile really hard is not only cause for concern. The high cost of production resulting from an instant rise in the energy cost has been the primary cause os concern for the industry. Depreciation of Pakistani rupee during last year raise the cost of imported inputs. In addition, double digit inflation and high cost of financing has seriously affected the growth in the textile industry. Pakistan’s textile exports have gone down during last three years as exporters cannot effectively market their products since buyers are not visiting Pakistan due to adverse travel advisory and it is getting more and more difficult for the exporters to travel abroad.

Textile exporters rightfully demand reduction of Kibor rate to 8% to avoid a severe decline in exports. A three-year comprehensive textile policy is expected to announce before budget 2009-10. The textile has been designed to enhance the exports of textile sector to $25 billion in next three years.

Tight Monetary Policy

The continuity of tight monetary policy causes an intensive increase in cost of production. Due to high interest rate financing cost increases which cause a severe effect on production. The withholding tax of 1% also effects the production badly. The high cost of doing business is because of intensive increase in the rate of interest which has increased the problems of the industry. The government should take immediate measures to remove slowdown in the textile sector.

Removal of Subsidy on Textile Sector

The provisions of finance bill 2009-10 are not textile industry friendly at all. Provisions like reintroduction of 0.5% minimum tax on domestic sales, 1% withholding tax on import os textile and articles etc, are noting but last stick on industry back. Reintroduction of minimum tax on domestic sales would invite unavoidable liquidity problem, which is already reached to the alarming level. The textile industry was facing negative generation of funds due to unaffordable markup rate.

Lack of Investment

Pakistan textile industry is facing problem of low cost productivity due to its obsolete textile machineries. To overcome this problem and to stand in competition, Pakistan textile industry will require high investments. There is a continuous trend of investing in weaving since many years. Pakistan’s textile industry estimates that around Rs 1,400 billion (US$ 32 billion) of investment was required till 2010 in order to achieve government’s export target. Pakistan is facing externally as well as internally problems which restricts the new investment. The unpredictable internal conditions of Pakistan cause a rapid decrease in foreign investment that affected all industries but especially textile industry.

United States & EU Cuts Imports of Textile from Pakistan

United States cancel more than 50% of textile orders of Pakistan. US also impose high duties on the import of textile of Pakistan which affect the export in a bad manner. US & EU are the major importer of Pakistan textile which creates a huge difference in export of Pakistan textile after imposing a restriction on import of Pakistan textile goods.

Raw Material Prices

Prices of cotton and other raw material used in textile industry fluctuate rapidly in Pakistan. The rapid increase in the price of raw material affects the cost of production badly. The increase in raw material prices fluctuates rapidly due to double digit inflation and instable internal condition of Pakistan. Due to increase in the cost of production the demand for export and home as well decreased which result in terms of downsizing of a firm. Hence the unemployment level will also increase.

Effect of Inflation

Inflation rate is measured as the change in consumer price index (CPI). Inflation is basically a general rise in the price level. It is declined in the real value of money. Inflation can have adverse effect on economy. Pakistan is one of prey of inflation. It still faces double digit inflation. The increase in inflation causes the increase in the cost of production of textile good which return in downsizing. The double digit inflation causes reduction in exports of textile.

Sources

All Pakistan Textile Mills Association (APTIMA) (Various Issues)

Annual Report

Challenges for Pakistan. Asian development review Pakistan textile journal 2009.

Pakistan, Government of (2008-09)

Economic Review- NBP (2009)

http://www.epb.gov.pk http://www.fpcci.com.pk     http://www.pakboi.gov.pk

exportpakistan.blogspot.com 

Chapter#10

           Solutions to the problems

SOLUTIONS

Problems	Government	Private sector
Up gradation of technology	Government should establish a textile technology modernization to support the awareness and vendors research program. It should phase out incentives on imports of out dated/ second machinery. It should increase incentives for technology.	They should participate in awareness programs. They should partners with IFCs to search for and bargain with technology vendors for better prices.
Skill development	It should upgrade the existing training institution to promote specialization. It should explore feasibility of private sector management of government training institutions.	They should offer internship program for graduates of training institutes.
Improving regulatory environment	It should gradually eliminate the regulatory barriers on import of raw material particularly synthetic fiber and textile machinery.	They should provide feedback to IFCs and government on responsiveness of regulatory policies.
R & D in product and process development	It should increase incentives on R & D for exporting firms and ensure speedy implementation. It should provide special budgetary support to research institutions engaged in weaving sector.	They should identify the key areas for process and product R & D.
Marketing	It should establish a textile export board with public- private membership. It should open more export offices.	They should work with IFCs and government for international marketing of Pakistan textile weaving products. They should take a lead in identifying new markets and product niche.

www.aptma.org.pk , www.mofa.gov.pk/pdf/textile%20vision%202005.pdf

CHAPTER#11

Conclusion and Recommendation

Conclusion

• The textile industry of Pakistan is a major contributor to the economy with 8.5% of the total GDP (2008-09). This means that it is the back bone of Pakistan’s economy as a whole.
• Many textile products are produced throughout the year, most of which are exposed overseas. Overseas and domestic demand keeps on increasing showing greater fluctuations in demand and supply.
• It holds 46%of the total manufacturing, providing good employments opportunities for people, around 38%of total population (2008-09). So as the production capacity will increase. It will require more labor in the industry, creating more jobs for the people.
• The unionization in the industry is vast and almost every sector of textile has its trade union. These trade unions provide standards of work, laws, rules, and regulations, to be fallowed and security the industry. As the political stability in the country is not commendable, so these unions hold the security of the industry as a whole in any phase of disorder.
• Trade situation in the industry is attractive as Pakistan exports the textile at a greater level than the imports. And more demand of Pakistan textile will gradually increase the value of the industry in the market share of world.
• Determinants of price in the textile industry include the government policies, tariffs and duties, rate of inflation, behavior of the competitors, and the type of material used. As the inflation rate is going, the price of textile products increases gradually.
• Pakistan textile industry is facing high cost of production due to several factors like the hike in electricity tariff, the increase in interest rate, energy crises, devaluation of Pakistan rupee, increasing cost of inputs, political instability, removal of subsidy & internal dispute.

Recommendation

• Having an analysis of all the factors in the industry, it is expected that the weaving textile industry will further provide a booming platform for the firm and those that are to emerge in the coming years.
• More textile mills should emerge in Pakistan this will further increase our exports that will benefit our economy and reduce our trade deficit. More employment opportunities will arise when industries come in the market.
• But the uncertainty in the country will always remain a major threat and this need to be tackled along smartly and effectively. The best advantage, the Pakistan textile industry will strive to maximum level to be the textile pioneer of the world textile.

(We write this conclusion, after completing project on weaving textile industry in Pakistan from our own side) .

Posted in: Al Karam Textile Mills.Gul Ahmed Textile Mills,Blessed Textile Mills,Mahmood Textile Mills Report,Nakshbandi Textile Mills,YUNUS TEXTILE MILLS EXPORTS