textile industry 2

8/14/2019 Textile Industry 2

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TEXTILE INDUSTRYA LEADING INDUSTRY


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GROUP MEMBERS

SAMER KAYANI

NAZIA REHMANI

NOMAN BAIG


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POINTS TO COVER

Development

Importance

Global scenario

Economic Profile

Structure of theIndustry

Export & Import Investment

Government Policies

Textile Vision 2005

SWOT Analysis

Textile Cities

WTO Effects

EnvironmentalProgram

Problems Recommendations

Current Scenario


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ABOUT TEXTILE

A textile is a cloth, which is eitherwoven by hand or machine.

"Textile" has traditionally meant, "awoven fabric".

The term comes from the Latin word

texere, meaning to weave.


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Development of Industry At the time of independence Only 6 Textile Units with:

80,000 spindles 3000 looms,

Supply 8% of the domestic demand

The Government set the objective of promoting Textile Industryfirst as an import substitution industry and later as an exportoriented industry.

Rapid growth during 50s & 60s.

With the sudden upsurge textile spinning and composite unitsstarted picking up roots


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Development of Industry (Cont) Power looms number rose to 0.3million plus in the

unorganized sector

In 50s Pakistan then reached the surplus stage to

export yarn and cotton fabrics

APTPMA was registered with ministry of comm on 5thJuly 1990 under trade organization Ordinance,1961.

It started functioning in July 1991

The principal object of the association was to protectand promote interest of all person dealing in theprocessing of textile products.


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Development of Industry (Cont)

According to 1990-91 census of manufacturing textileindustry account for 24% of value added products 27% of industrial labor force

In 1990s textile industry have been completely

deregulated to allow its expansion by the private sector

In 1996-97 the installed capacity was 10,000 thousands looms 9000 thousands spindles

150 thousands rotors

There were about 500 cotton textile units in theorganized sector


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IMPORTANCE The textile and clothing industry is the backbone of

Pakistan's economy

Single largest determinant of the growth in manufacturingsector

Pakistan is a monocrop economy as cotton contribute 10%in the agriculture GDP

4th largest Producer of Cotton

3rd largest Exporter of raw cotton

A leading Exporter of yarn in the World


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IMPORTANCE (CONT)

Cotton is the cash crop of Pakistan.

Availability of cheap labor and basic raw cotton

The exports of textile and textile products of Pakistan have

shown a significant increase in the recent years.

Global textile and clothing trade is set at $ 356 Billions in2000 with textiles trade at $ 157 billions and clothing tradeat $ 199 billions (W.T.O report).

Pakistan has a strong presence in International TextileMarket with share of $.4.53 billions export in textiles and$.2.144 billions exports in clothing (2000).


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Textile in Brief

GDP 10.5 % of total GDP

Exports 68% of total exports

Manufacturing 46 % of total manufacturing

Employment 38 % of total industrial workers

Investment 31 % of total investment

Taxes Rs. 101 billion per annum

Value Addition (In Aggregate) 27%

Technology Medium to High

Source of Machinery Japan, Germany, Switzerland,Bel ium China


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AIM

The aim is to make Pakistan one ofAsias top five textiles and clothingexporting nations.


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GLOBAL SENARIO The demand for textiles in the world is around

$18 trillion

Likely to increase by 6.5 % in 2005

Global demand for textile is growing at anaverage rate of 2.5%

China is the leading Textile exporter and Indiais second. India has potential to grab the worldmarket to at least 10% from 3% (2005)


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GLOBAL SENARIO (Cont) Pakistan has emerged as one of the major cotton

textile product suppliers.

As a result global scenario has changedgovernment & corporate textile sector adjustedtheir policies to achieve max benefit of free trade

Pak has great potential for textile exports as itspresent share is less than 1% in the internationaltextile trade.


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Country wise measure market shareof textile of exporting countries

COUNTRIES MARKET SHARE

CHINA $55 BILLION

INDIA $- BILLION

KOREA $35 BILLION

TAIWAN $16 BILLION

INDONESIA $9 BILLION


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ECONOMIC PROFILE Cotton textile is the largest industry of

Pakistan.

It is a broad industry and involves spinningyarn production weaving and cloth

production.

Completely regulated to allow expansion bythe private sector.

Important sector of economy as its productform almost 60% of Pakistan total exportsand 18% weight in the countrys large scale

industrial production.


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::. TEXTILE SECTOR PROFILE

Total Capacities:

Spinning 1550 million Kgs Yarn

Weaving 4368 million Sq. Mtr. Fabric

Finishing 4000 million Sq. Mtr.

Garments 670 million Pcs.

Knitwear 400 million Pcs.

Towels 53 million Kgs.


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Number of units:

Weaving:

Finishing:

Garments:

Ginning 1221

Spinning 442

Large 124

Small 425

Power Looms 20600

Large 10

Small 625

Large 50

Small 2500

Knitwear 600

Towels 400


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Contribution to totalexports

68% (US $ 5.2 billion)

Contribution tomanufacturing

46% of total manufacturing

Contribution to valueaddition

27% of industrial value addition

Contribution to GDP 10.5% of total GDP

Sector Employment 38% of total employment (15

million)Skilled & Un skilled Ratio70 : 30

Market Capitalization 12% of total market capitalization

Salaries and Wages 44 billion per annumTotal sector Investment 31% of total investment ( Rs.140

billion)

Technology Medium

Sources of Machinery Japan, Germany, Switzerland,

Belgium, China


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ENERGY Raw material prices decreasing but energy

cost increasing

There is need to check the trend of furtherincreases both by policy support as well asmarket forces.

Need to plan strategies to consolidate andredeveloped competitiveness.

Installation of their own power plants


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BY-PRODUCT

Banola seed

It is used to make cooking oil.

Sub-Sector No of Units Size (Installed Capacity Production


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Sub Sector No of Units Size (Installed Capacity Production

1. Ginning 1221 5,488 Saws 10.314 M Bales

2. Spinning 456 a) 9.6 million spindles 1.818 M. Kgs Yarn

b) 146,640 Rotors

3. Weaving 50 20,000 25,000 Shuttle-lesslooms

5,600 M. Sq MT(Approx)

Composite Units 140 225,000 Conventional Looms

Independent Mills

Power Loom Sector

4. Finishing - 2,700 M. Sq. MT

Organized Sector 106

Small Scale Sector 625

5. Garment Units 5,000 450,000 Sewing Machines 650 M Pcs.

6. Terry Towels 400 7,600 Looms 55 M. Kgs.

7. Canvas 100 2,000 Looms 35 M. Kgs.

8. Knitwear 700 21,000 Knitting Machines 5.50 M. PCs.Source: TCO, APTMA, PHMA, PRGMEA


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PRODUCTION TREND

COTTON AREA UNDER CULTIVATION, PRODUCTIONAND YIELD

Year AreaProductionYield

Hectare million bales Kgs/Hec

1999-00 2983 11.24 641

2000-01 2927 10.732 623

2001-02 3116 10.613 579

2002-3(pro) 2796 10.211(9.7) 621


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MAIN MARKETS

USA

EU

MIDDLE EASTSAUDI ARABIA

HONK KONG

RUSSIAN REPUBLIC

Textile Share in Pakistans Exports


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Textile Share in Pakistan s Exports

VALUE IN '000' US$

S.NO CATEGORIES 1999-2000

2000-2001

2001-2002

2002-03 2003-04 2004-05

A TEXTILE & GARMENTS 5,858,861

6,115,070

5,996,910

7,457,7488,252,4039,030,000

B OTHER CORE

CATEGORIES

1,878,64

3

2,134,18

6

2,079,82

6

2,252,4982,410,7293,086,000

C DEVELOPMENTALCATEGORIES

479,642 566,218 615,917 851,597 832,147 867,000

D ALL OTHERS 351,453 386,121 441,915 598,403 818,006 1,427,000

TOTAL 8,568,599

9,201,595

9,134,568

11,160,246

12,313,285

14,410,000

Source: Export Promotion Bureau

T I t i t P ki t


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Top Imports into Pakistan

000 US $

S.No. ITEMS 1999-2000 2000-2001 2001-2002 2002-03 2003-04 2004-05

1 Crude Petroleum 805 1,360 1,230 1,366 1,765 2,090

2 Petroleum Products 1,999 2,000 1,576 1,699 1,402 1,723

3 Road Motor Vehicles 345 320 329 501 653 972

4 Textile Machinery 210 370 406 531 598 902

-2.04% -3.45% -3.92% -4.34% -3.80% -4.40%

5 Iron And Steel 304 277 336 402 512 894


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Main constraints

Structure imbalances - technological gapsand resultant lack of co-ordination amongstdifferent sub-sector of textile industry.

Internal weaknesses of the industry and itsinability to improve quality - productivity and

production efficiency to the desired level.

Neutralization of the incentive to the industryby recent adjustment policies.


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EXPORTS PERFORMANCE Pakistans textile sector remained heavily dependent

upon the quota markets i.e. the USA and the EU.

The Textile Vision 2005 emphasized for the need todiversify towards vital non-quota markets includingJapan, Hong Kong and the Middle East.

Unit prices of yarn, fabric, made-ups and garmentsdeclined since 1998-99.

The export growth in the textile sector, as envisioned in

the Textile Vision 2005, was driven by increase in unitprice realization in each product category.

O S O C


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EXPORTS PERFORMANCE(Cont) In retrospect it is evident that the negative trends of

unit value prices in global markets was notincorporated in Textile Vision benchmarks.

The primary focus of the garments sector remainedon men garments, whereas the Textile Vision 2005explicitly highlighted the importance ofdiversification towards women garments. This shift

was not achieved.


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Textile & Garments Machinery

Imports into Pakistan

Key indicators at a Glance amt.(000USD)

Items 2002-2003 2000-2001 2002-2003

TOTAL 12,220,000 10,339,54710,309,425

Textile 525,000 406,908 210,952

Share(%) 4.30 % 3.94 % 2.05 %


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GRAPH PRESENTATION


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INVESTMENTS Textile Vision 2005 has envisioned an investment

program of approximately US$0.6 billion by next fiveyears

Need for AIR JET LOOMS and ROTARY PRINTING

MACHINES.

The processing industry is catering the needs ofboth Home Textiles & Readymade GarmentIndustry

Introduction of Cad-Cam & laser techniques inPrinting & Garment Units


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INVESTMENTS (Cont)

For additional capacity total disbursement to thissector was only 36% of the target, in garmentmanufacturing total disbursement was only 49%of the targeted amount ,56% investment gone tospinning sector

The bright side of the investments in textileindustry is the high investment in the Air Jetweaving segment, which likely to fuel valueaddition in garments manufacturing


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INVESTMENTS (Cont)

Increased investment in textile sector has resultedin substantial increased in production of yarn(18.2%), cloth (28.5%) and synthetic fibers (26%)in 2004-05

To ensure an abundant supply within the country,cotton is allowed to be imported and exportedfreely.

The inflow of foreign direct investment (FDI)almost doubled from $2.1 million in July-March1999-2000 to $4.0 million in July-March 2000-01.


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DEREGULATION STRATEGY


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DEREGULATION STRATEGYFOR INVESTMENTS

Lack of infrastructure.

Non-availability of good quality soft water for thetextile industry.

Not providing our exporters level playing field toprocure raw material at the international rates

Arrangements to provide Insurance guarantees toU.S. investors on their investment in Pakistan


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GOVERNMENT POLICIES Need to plan strategies to consolidate and redeveloped

competitiveness

Policies for revival of sick mills have the sole objective toaccelerate the production and exports.

To create an environment in which firms can upgradecompetitive advantages

The strategic objective is to upgrade Product Quality, SkillLevels, Productivity, Market Image.


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LONG TERM TEXTILE POLICY

The Government of Pakistan wanted tomobilize all its resources so as to establisha solid export base. Textile Sector

Government constituted a working groupheaded by a leading industrialist in theprivate sector in Jan-2000.


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TEXTILE VISION 2005

An open, market driven, innovation &dynamic textile sector, which is:- Internationally Integrated.

Globally competitive.

Fully equipped to exploit the opportunitiescreated by the Multi Fiber.


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THREE SCENARIO

LOW ROAD SCENARIO

DO-ABLE SCENARIO

HIGH ROAD SCENARIO


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STRENGHTS & OPPORTUNITIES Pakistan is the 4th largest producer of Cotton in

the World.

It ranks 2nd in export of yarn & 3rd in export ofcloth.

It has Large spinning and weaving capacity

Large, well equipped finishing sector

Availability of cheap labour

Large domestic market.

Good and clear investment policies.


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Strengths & Opportunities (Cont) Strong presence in international market.

Volumes of yarns with synthetic fibres in variousblends & counts are increasing.

Production of commodity products at good qualitylevels.

Market Franchise Technical know how Agreements.

Joint Venture in Higher Value Added Segments.

Product & market diversification.

Improvement in marketing skills and countrys image.


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WEAKNESSES

Outdated technology

Poor quality

Low productivity

High proportion of operations are in small and

medium sized companies

Tend to be inefficient and lack the resources toeffect an improvement


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Potential of Textile Industry

Pakistan emerged as the major supply sourceof cotton textiles.

Pakistans share in the world yarn trade isabout 30% and the share in cloth is 8%.

The Textile Industry has an in built potentialfor performing better.


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TEXTILE CITIES To meet the challenge of post-quota regime the government

has formed a company named PTCL (PAKISTAN TEXTILECITY LIMITED)

There would be 5 Textile Cities Karachi (total cost Rs.1.1 billion) Lahore Faisalabad Hyderabad Multan

Total cost of the Project is approximated to be Rs.3.6 billion


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TEXTILE CITIES (Cont)

The city will have a number of supportingand ancillary industrial units in the area.

The concept of Textile City is based onsupply of industrial infrastructure.


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Effects of WTO Abolition of textile quota is likely to have a negative

impact unless the domestic pricing system isreformed.

Quota abolition will create opportunities, but willincrease competition in the international markets.

Pakistan should focus on increasing productivity

The clothing sector will have greater opportunities

Only 10% of the local exporters are mentallyprepared to meet the WTO challenges (ChairmanExport Promotion Bureau (EPB) Tariq Ikram).


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Environmental Program The sector is facing the challenge of conforming to

international quality standards and abiding the givenlegislations.

Pakistan has recently initiated a project funded by EU- Promoting Better Environmental Practices inthe Textile Processing Sector of Pakistan.

This project aims to promote environmental reportingin the sector through organizing awareness sessionsand rewarding industries for their transparency.


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Project Title

Lead Applicant WWF - Pakistan

Partners Cleaner Production Institute (CPI)/Cleaner Technology Programme for Textile Industry ACCA Pakistan All Pakistan Textile Mills Association (APTMA)

Project Location Punjab Province ; Lahore , Faisalabad , Islamabad , MultanSindh Province ; Karachi

Sector Textile Processing Sector of Pakistan

Objectives To identify and explore the environmental problems in the Textile Processing Sector ofPakistan and find solutions through research and consultations. To enhance the awareness level of Textile Processing Sector and promote cleaner

production techniques. To provide incentives and direction to the Textile Processing Sector to obtaininternational certification by meeting international environmental standards of productionand reporting

Main Activities Developing reference materials on BEMPs (Better Environmental Management Practices)in the textile processing sector by learning through local and European examples. Capacity building of stakeholders in Cleaner Production techniques in the sector. Promoting transparency through capacity building on Environmental Reporting in thesector.

Total project cost EUR 103,089

EC Contribution EUR 88,685

Start Date June 01, 2005

Duration 1 year

Promotion of Cleaner Production and Environmental Reporting in the TextileProcessing Sector of Pakistan


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Benefits (Cont)The action will improve the situation of the textile

processing sector through: Savings on raw materials and energy, thusreducing production costs; Increased quality and competitiveness through

the use of new and improved technologies; Reduced concerns over environmentallegislation; Reduced liability associated with the treatment,storage and disposal of hazardous wastes;

Improved health, safety and morale ofemployees; Improved company image; and Reduced costs of end-of-pipe solutions.


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Problems WTO and quotas

Sales tax on cotton

DTRE (Duty and Tax Remission for Exports)

Lack of Infrastructure

Lack of synergy

Inefficient industry

Trade remedy actions

Cotton


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Recommendations Remedy though FDI

Image Building of Pakistan to Attract FDI

Focus on Value Addition

Creation of Ministry of Textiles instead ofTextile Board

Technology Up-gradation & capacity building


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Recommendations (Cont)

Human Resources Development

Accreditation and Certification

Reducing the cost of doing Business in Pakistan

Need for Improving Textile Production


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CURRENT SCENARIO


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THANKSQUESTIONS ???????

textile industry 2

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