TDAP –JICA Activitiestdap-jica.com/pdf/textile_association.pdf · 1-7 Overview of Textile Industry in Pakistan . SWOT Analysis of Region’s Textile Industry . ... Textile & apparel

TDAP –JICA Activities

for

Textile Industry in Pakistan

Hideaki Shimizu, JICA Advisor

INDEX

1. Overview of Textile Industry in Pakistan

2. Pakistan’s Textile Export to Japan

3. JICA Project Activities under TDAP

4. Recommendations for Textile Industry

1-1 Overview of Textile Industry in Pakistan

• Pakistan’s textile industry ranks amongst the top in the world.

• Cotton based textiles contribute over 60% to the total exports, accounts for 46% of the total manufacturing and provide employment to 38% manufacturing labor force.

• The availability of cheap labor and basic raw cotton as raw material for textile industry has played the principal role in the growth of the Cotton Textile Industry in Pakistan.


Value chain of textile industry

RAW MATERIAL

RETAIL STORES TEXTILE PLANTS

SPINING WEAVING

DYING PRINTING

ACCESSORIES

APPAREL PLANTS

DISTRIB. CENTRES

CUSTOMERS


TOP BUYERS OF PAKISTANI TEXTILE GOODS ARE

1) USA 2) EU 3) Gulf region 4) UK 5) Hong Kong

6) Japan 7) Korea 8) Saudi Arabia 9) Italy 10) Turkey

1-4 Overview of Textile Industry in Pakistan Growing International Textile & Apparel Market

International Textile & Apparel Trade (USD Bn)

CAGR (2008-2012)

2.7%

3.5% 3.1%

Source: ITC calculations based on UN COMTRADE statistics

Textiles include raw cotton, yarn, fabrics, made ups, towels, tents etc


%Share of countries in the Global Textile and Apparel Exports, 2012

Source: ITC calculations based on UN COMTRADE statistics


%Share of Towel & Madeups Exports, 2012-13

Source: Bureue of Statistic, Pakistan

Raw Cotton 1%

Cotton Yarn 17%

Cotton Cloth 21%

Knitwear 16%

Bed Wear 14%

Towels 6%

Tent, Canvas & Tarpulin 1%

Readymade Garment 14%

Art-Silk & Synthetic Textile

3% Made-ups (Other Textiles)

4%

Other Textile Products

3%

1-7 Overview of Textile Industry in Pakistan SWOT Analysis of Region’s Textile Industry

Strengths

Abundant supply of raw cotton

Low wage rates makes it a low cost textile

producer

Textile & apparel industry is the largest

employment generating industry

Weaknesses

Low WGI s

Low labour productivity due to lack of skilled

training

Poor infrastructure

Lack of investment in Research, Development

and Technology.

Long list of Laws / regulation /Conventions

Opportunities

Growing international trade

Buyer’s Keenness to increase region’s buying

from textile industry

GSP + rating

Explore opportunities beyond current strong

categories (bottoms & made-ups)

Threats

Political instability and fragile security situation

Long transit times for US and EU based clients

render locational disadvantage

Competition from neighbouring countries

adopting BWP

2-1 Pakistan Textile Export to Japan

2011-12 2012-13 2013-14

Exports 202,545 166,564 198,658

Imports 1919,710 2038,399 1777,492

Balance (-1717165 ) (1871835 ) (1578834)

PAKISTAN - JAPAN BILATERAL TRADE

(Value in ‘000’ US Dollars) Source FBS


Japanese Textile Import from World/Pakistan

(Value: Million Yen) World Over From Pakistan • Yarns Total 128,866 3,695(2.9%)

• Fabrics Total 211,107 2,233(1.1%)

• Clothing Total 3,153,331 1,907(0.1%)

• Other Made-Up Goods 509,851 1,509(0.3%)

• Grand Total 4,003,156 9,344(0.23%)


PAKISTAN’s TOP 20 EXPORTING PRODUCTS TO JAPAN In US$000

3-1 JICA Project Activities under TDAP For Business matching between Pakistani exporters and

Japanese buyers, the following activity programs were prepared for TDAP members under JICA project.

1. Preparation & Field Works

2. Company Visit Activities

3. Making of Export Promotion Booklet for Japan

4. Textile Workshop with theme of “How to Access Japanese Market”

5. Sending Trade Delegation to Japan for Business Matching

6. Pakistan Now! Business Seminar & B2B Meeting in Japan

7. Follow-up of Business Matching

3-2 JICA Project Activities under TDAP

English Version Cover

Japanese Version Cover

a) “Pakistan Now!” Booklet


List of 50 exporters introduced in the Booklet

1) Textile (Home Textile & Garments)

1. Abdur Rahman Corporation (Pvt.) Ltd.

2. Afroz Textile 3. Al-Karam Towel Industries 4. Asacotex 5. Bismillah Carpets (Pvt.) Ltd. 6. Feroze1888 Mills Limited 7. GIA Export Marketing Services 8. Gohar Textile (Pvt.) Limited 9. Gul Ahmed Textile Mills Limited 10. Indus Home Limited 11. Interloop Limited

12. Masood Textile Mills Ltd. 13. Mustaqim Dyeing & Printing Ind.

(Pvt.) Ltd. 14. Nishat Chunian Ltd. 15. Pearl Fabrics Company 16. Rajby Industries 17. Sadaqat Limited 18. Sapphire Textile Mills Limited 19. Siddiqson Limited 20. Soorty Enterprises (Pvt.) Ltd.

2) Leather

21. Din Leather Private Ltd. 22. Hub Leather (Pvt.) Ltd. 23. Ihsan Industries (Pvt.) Ltd. 24. Leather Field (Pvt.) Ltd. 25. Muhammad Ashraf & Sons

26. Mima Leather (Pvt.) Ltd. 27. Noor Leather Garments (Pvt.) Ltd. 28. Nova Leather 29. STA Leather Product

3) Agricultural & Marine Foods

30. Durrani Associates 31. Fauji Fresh ‘N’ Freeze 32. Iftekhar Ahmed & Co. 33. Imtiaz Enterprises

34. Nutricia Food International (Pvt.) Ltd.

35. Seagreen Enterprises (Pvt.) Ltd. 36. Son of the Sea

4) Surgical Instruments

37. Banzai Corporation 38. Dr. Frigz International (Pvt.) Ltd. 39. Elmed Instruments 40. Enika Trading

41. Hilbro International (Pvt.) Limited 42. IAA Surgical Instruments Company 43. Sobytek Instruments Co.

5) Sports Goods

44. Ali Trading Co. (Pvt.) Ltd. 45. Ballon De Sports 46. Capital Sports Coporation (Pvt.) Ltd. 47. JSD Sports (Pvt.) Ltd. 48. Mansha’s Brother (Pvt.) Ltd. 49. Six A's Group 50. Vision Technologies Corporation

(Pvt.) Ltd.

a) “Pakistan Now!” Booklet


English Version

Profile Sample

a) “Pakistan Now!”Booklet


Subject: How to Access Japanese Market Lecturer: Mr. Yoshiaki Kamiyama, Sr. Researcher of Japan

Textile Importers Association Place & Date: Karachi : 14th April, 2014 (Monday) – : 10:00 to 13:00 Place: Regent Plaza Hotel, Karachi Lahore : 16th April, 2014 (Wednesday) – : 10:00 to 13:00 Place: Avari Hotel, Lahore Faisalabad : 17th April, 2014 (Thursday) – : 10:30 to 13:30 Place: Faisalabad Chamber of Commerce & Industry, Faisalabad

b) Textile Seminar


Karachi: April 14, 2014

Lahore: April 16, 2014

Faisalabad: April 17, 2014

b) Textile Seminar


b) Textile Seminar


After making Japanese version of TDAP’s export promotion booklet “Pakistan Now!” in April, 2014, JICA Advisor immediately organized Business Seminar & B2B Meeting in Japan as an effective export promotion event with the official launching of this booklet in Japan.

Project Name: “PAKISTAN NOW! - Business Seminar & B2B Meeting” Sponsored by TDAP and JICA Period: June 22, 2014 – June 28, 2014

c) Business Seminar & B2B Meeting in Japan

No of Delegation Members and TDAP members Delegation: 11 members TDAP: 5 members

Date & Place for Business Seminar & B2B Meetings June 23: Osaka / Osaka Chambers of Commerce & Industry (OCCI) June 24: Osaka / Consulate of Pakistan Osaka (Additional B2B Meetings) June 25: Tokyo / KFC Hall, Hall 2nd June 26: Tokyo / Embassy of Pakistan (Additional B2B Meetings)

TDAP Members Delegation Members

DG TDAP Staff Textile Leather Agricultural Foods

Surgical Instrumen

ts Sports Goods

1 4 5 2 1 2 1




Although Karachi airport attack by TTP was happened a couple of weeks before this event, both Osaka and Tokyo were full house, fortunately. Actual number of registered participants is as follows:

Actual number of attendance would be more than 100 in each seminar .

Osaka Tokyo Total

Textile 40 26 66

Leather 11 10 21

Agrifood 7 4 11

Surgical Instruments 12 4 16

Sports Goods 2 6 8

Total 72 50 122

Osaka Seminar participants 75 B2B participants 44 Tokyo Seminar participants 80 B2B participants 36

Total number of B2B meetings is as follows:



Business Seminar in Osaka Business Seminar in Osaka

Business Seminar in Tokyo Business Seminar in Tokyo

c) Business Seminar


c) B2B Meetings

4-1 Recommendations for Textile Industry

1-1)Great Business Opportunity in the “CHINA PLUS ONE “Trend

The business trend of “China Plus One” (to secure other Asian suppliers besides China) has been accelerated rapidly in Japan.

Recently, it is obvious to see quality deterioration of Chinese

products due to omitting crucial steps in the production or decreasing necessary costs in lower value added products.

Regarding the basic products like home textile, some Japanese think that some Pakistani products are better than Chinese products on quality and price.


It is a great business opportunity for Pakistan to take more market shares in Japanese market while it has extremely low market share in Japanese textile import market in spite of having huge textile industry in the country.

More strategic promotion activities shall be implemented to give strong impact or

good impression to Japanese buyers at this timing. Especially finished products such as home textile and garments are recommendable.

It is also important to show what competitive advantage of Pakistan is or why Pakistan products are superior in a series of promotion activities, especially, in a comparison of other Asian countries such as China, South East Asian countries, Bangladesh, and India.

1-2) Great Business Opportunity in the “CHINA PLUS ONE “Trend

4-3 Recommendations for Textile Industry 2-1) Improvement on Quality, Inspection, and Delivery Japanese companies are always concerned about quality, inspection,

and delivery. Pakistani companies’ performance on these matters is basically not

enough than other Asian competitors since seldom have direct guidance or training by Japanese customers in their factories while most of Chinese or ASEAN companies can have such things through transactions with Japan.

There would be a possibility of huge improvement on these issues by Japanese companies’ support through increase of export to Japan from now on. There are many rooms for improvement in production control, quality control , and inspection in the factory operation of Pakistan textile companies


For improving these matters, wide range of educational activities through technical workshops shall be arranged for textile related people by comparison with relevant factories in Japan and China.

It would be also useful to introduce feedbacks through direct

guidance by Japanese expert in Pakistani textile factories at workshops.

Regarding inspection, it is desirable that Japanese inspection & logistic companies could come to Pakistan as same as China and other Asian countries.

2-2) Improvement on Quality, Inspection, and Delivery


Regarding business with Japan, Pakistan still have several disadvantages compared with other Asian competitor countries such as far distance from Japan, security issues, import duty issues and so on.

It is necessary to challenge more positive and aggressive business matching

activities between Pakistan and Japan to overcome the above disadvantages.

3) Positive Actions for More Business Matching

It would be another interesting challenge to organize Japanese delegation to Pakistan sector by sector and arrange more intensive business matching. Especially, there would be a lot of potential Japanese participants in textile sector, it may be a good idea to focus on home textile or garment sectors at the beginning.

It is also necessary to continue promotion activities from Pakistan side such as

arrangement of business mission to Japan, participation in international exhibitions in Japan, etc. to expand business opportunities for Pakistan.


The tariff problem is still a major barrier with regard to Pakistani textile export to Japan. Especially, the finished textile products such as home textile and garments are always facing severe price competitions.

In most of the cases, Bangladesh or Viet Nam are more advantageous on price completion due to their tax exemption to Japan. As a result, there are many cases that Pakistani products are shelved in the price comparison.

Until now, government officials and private sectors of Pakistan always have taken initiative to insist the tariff exemption to Japanese government. However, nowadays, Japanese companies which import textile products from Pakistan are also willing to have tax exemption for Pakistan.

It would be better to do lobby activities on the issue of the tariff exemption in the form together with major Japanese companies, to prompt a rethink to the Japanese government.

4) Import Duty Issues

Thank You

Annexures

Proposed Activities in 2015 for Textile sector (1-1)

①Strengthening Export Promotion to Japan / Increase of Participation Opportunity in Exhibitions and Business Meetings in Japan

②Organizing Japanese Delegation to Pakistan in Textile Sector

③Research and Proposal for Differentiation Strategy to Pakistani Textile Industry=>Collaboration with Ministry of Textile, etc.

Annexures

Proposed Activities in 2015 for Textile Sector (1-2)

④ Business Matching with Textile related Technology Companies in Japan for improving strength of Pakistani Textile Products

⑤ Textile Workshop for Production Control and Quality Control

⑥ Dispatch of Pakistani Business Mission for Factory Visits in Japanese-related textile companies in Asia or Japan

Documents

TDAP –JICA Activitiestdap-jica.com/pdf/textile_association.pdf · 1-7 Overview of Textile Industry in Pakistan . SWOT Analysis of Region’s Textile Industry . ... Textile & apparel