APPAREL INDUSTRY IN PAKISTAN

Past Trends in the Apparel Industry

• The export of textile and clothing for the period Jul-Dec 2010-11 & Jul-Dec 2009-10. In 2010-11 Jul-Dec, apparel exports decreased by 13.81% in volume and increased by 1.68% in value. The drop in volumes in 2010-11 Jul-Dec was mainly due to energy shortage and hike in the cost of raw materials.www.prgmea.org/pdf/17624.pdf

• Export of cotton denim fabrics from Pakistan increased from 229 million square meters worth Rs20 billion in 2009-10 to 326 million square meters worth Rs47 billion in 2012-13, thus showing an average increase of 34% per annum in terms of value. www.prgmea.org/pdf/15348.pdf

Share of Apparel in Pakistan’s exports

http://www.prgmea.org/res.asp

Future Trends

Source: Euromonitor April 2013, Report: Non-Grocery Retailers in Pakistan (Current Prices & Fixed 2012 Exchange Rates, Retail Value RSP incl Sales Tax)

TEXTILE INDUSTRY TRENDS

Growth Trends in Large Scale Manufacturing –TEXTILE(3 years)

Growth Percentage Contribution30

FY12 FY13 FY14 FY12 FY13 FY14

TEXTILE 0.2 1.6 1.3 5.9 12 9.9

COTTON YARN 0.5 2.1 1.6 8 10.1 7.6

COTTON CLOTH 0.3 0.6 0.7 2.5 1.4 1.7

www.sbp.org.pk/reports/annual/arFY14/Real.pdf

TEXTILE INDUSTRY'S ECONOMIC CONTRIBUTION 2011-12

Exports 52% OF TOTAL EXPORTS (US $ 12.36 BILLION)

Manufacturing 46% OF TOTAL MANUFACTURING

Employment 40% OF TOTAL LABOUR FORCE

GDP 8.5% OF TOTAL GDP

Market Captilization (Listed Companies) 5.0% OF TOTAL MARKET CAPITILIZATIONSource : Pakistan Economic Survey, SBP,TDAP

GROWTH OF COTTON TEXTILE INDUSTRY IN PAKISTAN

PERIOD INSTALLED CAPACITY (in 000) WORKING CAPACITY (in 000)Period Units Spindles Growth

% Rotors Growth% Looms Growth

% Spindles Growth% Rotors Growth

% Looms Growth%

2008-09 521 11280 0.12 194 3 8 0 10241 1 114 - 4 -2009-10 526 11392 0.99 195 1 7 -12.50 10631 4 140 23 5 252010-11 524 11762 3.25 196 1 7 0.00 10757 1 143 2 5 -2011-12 526 11,946 1.56 214 9 8 7.71 10,872 1.98 150 8 5 02012-13 526 11,946 1.56 214 9 8 7.71 10,872 1.98 150 8 5 0

According to 2013 report statistics:Pakistan is the 8th largest exporter of textile products in Asia. This sector contributes 9.5% to the GDP and provides employment to about 15 million people or roughly 30% of the 49 million workforce of the country. Pakistan is the 4th largest producer of cotton with the third largest spinning capacity in Asia after China and India, and contributes 5% to the global spinning capacity.

According to 2014-15 textile budget• Textiles is the most important manufacturing sector of Pakistan and has the

longest production chain, with inherent potential for value addition at each stage of processing, from cotton to ginning, spinning, fabric, dyeing and finishing, made-ups and garments.

• The sector contributes nearly one-fourth of industrial value-added, provides employment to about 40% of industrial labour force, consumes about 40% of banking credit to manufacturing sector and accounts for 8% of GDP.

• Barring seasonal and cyclical fluctuations, textiles products have maintained an average share of about 54% in national exports. However, despite being the 4th largest producer and 3rd largest consumer of cotton globally, Pakistan‟s comparative advantage diminishes due to export of low value added textiles products.

MAIN OBJECTIVE OF THE GOVERNMENT FOR THE NEXT 5 YEARS

To achieve the objectives, Strategic Master Plans will be developed particularly for export promotion, SME development, technical textiles and sub-sectors.

TEXTILE BUDGET SCHEME HIGHLIGHTS (2014-2019)

• Draw-back for local taxes and levies would be given to exporters of textiles products on FOB values of their enhanced exports on an incremental basis if increased beyond 10% over previous year‟s exports at the following rates:

Garments 4% Made ups 2%; and Processed fabric 1%

• Textiles industry units in the value added sector would be provided Long Term Financing Facility (LTFF) for up gradation of technology from State Bank of Pakistan at the rate of 9% for 3-10 years duration.

• Mark up rate for Export Refinance Scheme of State Bank of Pakistan is being reduced from 9.4% to 7.5% from 1st of July 2014.

• Sales Tax Regime - An expeditious refund system is being introduced and a fast track channel for manufacturers-cum-exporters is being created, whereby FBR would dispose of all their pending sales tax refund claims within 3 months, if not earlier.

• A new vocation training programme will be launched through PSDP to train sufficient men and women over five years period for skills required in the value added sector such as garments and made ups.

CLOTHING INDUSTRY FOCUSCottonModel Cotton Trading Houses: The Ministry will set up Model Cotton Trading Houses in Multan and Sakrand in collaboration with the PCCC, to facilitate farmers, ginners and other stakeholders. This will also help to encourage standardization and brand development.

Fibre Diversification At present, Pakistani products are heavily dependent on cotton, whereas the world demand is for increased use of manmade fibres and other natural fibres. Technical Boards will be formulated to carry on research on Silk, Wool, Jute, Synthetic, Artificial, and Vegetable Fibres.

Spinning Investment in new capacities in finer counts, rotor technology, value added attachments and economies of scales will be encouraged.

Weaving Weaving City would be established, initially in Faisalabad through PSDP funding and then will be replicated in other part of the country to de-fragment this sector, along with the provision to provide space for machinery and spare parts manufacturing.

KnittingThe small and medium knitting units will be supported to increase their capacities, up-gradation of their machinery and de-fragmentation.

Processing The Policy would encourage investment in narrow width capacities to increase production of finished fabrics for the apparel sector.

Technical Textiles Technical textiles are an emerging area of high value addition and through concerted efforts we can gain significant share in the world market. However, there is a need to invest in R&D in this area. Government will develop a proper strategy for the promotion of technical textiles in the country. For this purpose an exclusive centre of excellence to impart training, develop skills and provide relevant information about world trends in such fields like geotech, meditech and sportech will be established.

Garments and Made-ups Entrepreneurs will be encouraged to take maximum advantage of availability of abundant labour force and for this sourcing and marketing training will be provided along with the establishment of product development centres. The training would also focus on fashion garments and trends, apparel merchandising, made-ups designing and quality control etc. The centres will collaborate with leading fashion institutes to provide in-depth training in specialized high value fashion garments. Programmes will be initiated to raise profiles of local brands and designers and to explore new overseas markets. Innovations in garment production will encourage development of new raw materials for the sector.

Working for the Brand Development

The Ministry of Textile Industry would encourage setting up Pak cotton brand, fashion labels and brands abroad to increase exports. As brand development requires long term financial commitment, the Ministry would develop a scheme similar to LTFF with the State Bank of Pakistan in which loans may be made available at same policy rates available in LTFF scheme.

Technological problem• The development of the textiles sector in Pakistan was dictated by the quantitative

restrictions imposed by developed countries under the MFA and ATC, resulting in structural anomalies and lopsided capacities. While the spinning sector grew quickly, the highest value added sector – woven garments – failed to attract adequate investment due to non-availability of quotas in this sector.

• The overall technological configuration of the industry needs major up-gradation for replacing that machinery which has become obsolete or has outlived its economic life.

FUTURE CONSIDERATION FOR THE CLOTHING INDUSTRY

• Focus on quality and innovative fabrics and clothing. • Set yourself apart by using exceptional style detailing, fabrics, design and

line. • Offer good customer services (including the rapid availability of new/up-

to-date fashionable products) • Use crowdsourcing to get assistance with services as necessary and thus

compete with larger companies. • Adapt as soon as possible to changing fashion trends, style detailing and

patterns, and the changing needs of customers. • Innovate.• Technological developments leads to innovative fabrics and to designs

and products with a range of functionalities (e.g.. enhancing the quality of life). They make it possible to tailor products to customers’ individual needs and wishes. Innovation in the production process can contribute to raising the sector’s productivity, improving working conditions and promoting sustainable manufacturing.

REFERENCES

http://www.sbp.org.pk/reports/annual/arFY14/Real.pdf

http://www.prgmea.org/pdf/33798.pdf

http://www.aptma.org.pk/Pak_Textile_Statistics/repo.asp

http://www.aptma.org.pk/Pak_Textile_Statistics/Gctip3.asp

http://tribune.com.pk/story/522292/statistics-on-textile-industry-in-pakistan/

file:///C:/Users/faisal/Downloads/boutique%20women%20designer%20wear%20rs.%205.25%20million%20sep%202014.pdf

http://www.knetbook.net/wp-content/uploads/2015/07/Pakistan-Fashion-Industory-.jpg