TEXTILE INDUSTRY OF PAKISTAN

• Textile is a term that comes from “texere” which is a Latin word, that means “to weave”.

• A cloth, especially one manufactured by weaving or knitting; a fabric.

About Textile

• The textile industry is often considered the backbone of the Islamic Republic of Pakistan’s economy.

• Pakistan’s textile Industry is the fourth Largest Cotton Producer.

• 6th largest importer of raw cotton• The Third largest Consumer

Introduction

INTRODUCTION

• The textile industry contributes approximately 46 percent to the total output or 8.5 percent of the country GDP.

• In Asia, Pakistan is the 8th largest exporter of textile products providing employment to 38 percent of the work force in the country.

Value chain of textile industry

RAW MATERIAL

TEXTILE PLANTS SPININGWEAVING

DYINGPRINTING

ACCESSORIES

APPAREL PLANTS

DISTRIB.CENTRES

RETAIL STORES

CUSTOMERS

OVERVIEW• 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.

HISTORY OF TEXTILE IND.

PIDC came into being which had the main objective of industrializing the

country in major fields

The modern development of the sector started in 1953 with the inauguration of

the Valika textile Mill at Karachi.

Pakistan's industrialization began in the 1950s with the textile industry at

its center1950’s

HISTORY OF TEXTILE IND.

New private investment began with a highly protected home market

Newly established mills were based upon imported technology but there was a lack of

technical staff and shortages of capital.

By mid sixties there were about 180 units of textiles bleaching, printing

and processing units, mostly situated in Karachi and Punjab.1960’s

HISTORY OF TEXTILE IND.

After the separation of East Pakistan Cotton Export Corporation of Pakistan

was established which meant that most of the private sector work was taken

over by the state.

The textile industry suffered heavy losses because the export of cotton was

controlled by the CEC

By 1970-71 there was 113 textile units and the industry had 2,605 thousand

spindles and 30 thousand looms1970’s

HISTORY OF TEXTILE IND.

There was a rapid growth in spinning sector.

Till 1980-81 spinning continued to expand.

The eighties brought a relief to the textile industry due to the boom in international market and industry

friendly policies of the government. 1980’s

HISTORY OF TEXTILE IND.

World demand for good quality, wide width fabrics grew and replacement and

a modernization process started.

Machinery for producing garments and made-ups was also freed from import

duty. As a result, a huge expansion in the spinning sector took place in the first five

years of the 1990s.

The number of units rose to 440 in 1996-971990’s

HISTORY OF TEXTILE IND.

Textile exports managed to increase at a very decent growth of 16% in 2006.

Textile exports share in total export of Pakistan has declined from 67% in 1997

to 55% in 2008, as exports of other textile sectors grew

Textile exports in 1999 were $5.2 billion and rose to become $10.5

billion by 2007.1999 to

2008

HISTORY OF TEXTILE IND.

textile industry is being hit hard due to ongoing energy crisis, depriving the gas supply to the textile units for three days a week.

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.

The textile industry employs almost 40 percent (2008-09) of the industrial workforce2009

HISTORY OF TEXTILE IND.

Significant changes to the general sales tax (GST) on industrial sector including textiles

(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.2010

HISTORY OF TEXTILE IND.

Energy crisis leaves Pakistan textiles in tatters

Textile exports stood at $12.5 billion from July 2010 to May 20112011

HISTORY OF TEXTILE IND.

10 percent of the spinning mills and fabric printing units have shut down, and half of the remaining plants are

struggling to survive

thousands of textile workers poured out onto the streets of the city, burned tires,

and shouted slogans against the government.

Pakistan’s $13.8 billion textile industry is struggling to survive a critical

shortage of energy to run its plants.2012

HISTORY OF TEXTILE IND.

Textile millers, workers in gas protest

2013

PERFORMANCE CHART

IMPORTANCE OF TEXTILE INDUSTRY IN ECONOMIC SECTOR

• Pakistan’s economy relies heavily on its cotton and textile sectors.

• The cotton-processing and textile industries make up almost half of the country’s manufacturing base, while cotton is Pakistan’s principal industrial crop, supplying critical income to rural households. Altogether, the cotton-textile sectors account for 11 percent of GDP and 60 percent of export receipts.

TEXTILE SECTOR’S CONTRIBUTION TO THE ECONOMY OF PAKISTAN

• 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.

• According to the 2012 Economic Survey of Pakistan, issued by the finance ministry, the textile industry itself constituted about 4% of the total size of the economy.

TOP BUYERS OF PAKISTANI TEXTILE GOODS ARE

• USA, EU, Gulf region, UK, Hong Kong, Japan, Korea, Saudi Arabia, Italy, Turkey, Germany, Norway, France, Canada, Sweden, Australia, etc.

IMPORTANCE OF TEXTILE SECTOR

• In asia pakistan is the 8 largest exporter of textile products

• Cotton is the basic Cash crop of Pakistan.

• Textile products are one of the essential and basic human requirement next to food.

• Pakistan is the 3rd largest exporter of raw cotton

IMPORTANCE OF TEXTILE SECTOR

• Cheap labor and Raw cotton are available.

• 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 labour is very less as compared to that of uskilled labour

• 2nd Largest supplier of cotton yarn with 26% share of the international market.

FORWARD AND BACKWARD LINKAGE

BACKWARD LINKAGE

The backward linkage of textile

sector is in agricultural sector.

FORWARD LINKAGE

The forward linkage includes finished

goods and like knitted and readymade

garments

SECTORS OF TEXTILE INDUSTRY

• Spinning• Weaving• Processing• Printing• Garment manufacturing• Filamen yarn manufacturing

FACTORS OF PRODUCTION

• Cotton is an economic asset of Pakistan, it is a natural fiber used primarily as a raw material in textile industry.

• The World cotton production is estimated at 118.8 million bales in 2007-2008.

COTTON

• Leading produces of cotton include USA, China, India, Pakistan, Uzbekistan and turkey.

• Both Punjab and Sindh are the major cotton growing provinces, where as N.W.F.P is not known for growing cotton production.

FIBER

• Cotton was primarily used as a raw material in yarn manufacturing but the growing demand for blended yarn and fabrics has shifted the raw material source towards the manmade or synthetic fiber in Pakistan.

• Pakistan usage is currently at 74% cotton and 26% manmade fiber, whereas the world fiber mix is 45% cotton and 55% non-made fiber.

SPINNING• Spinning is the process of converting fibers into

yarn.• The fibers maybe natural fibers such as cotton

or man made fibers such as polyester.• Sometimes , the terms spinning is also used for

production of manmade yarn (that is not made for fibers).

• What so ever is the case the final product of spinning is yarn.

SPINNING CONSIST OF

• Blowing and mixing• Carding• Combining• Drawing• Simplex• Ring Spinning• Cone Winding

WEAVING

• weaving sector is one of the most important textile sub sector.

• The exports of woolen fabrics and other related woolen made-ups from a major portion of textile exports from Pakistan.

• Weaving is a process which turns yarns into cloth.

• The machine used for weaving is the loom

Weaving comprises on :

• Wrapping

• Sizing

• Weaving

COTTON GINNING SECTOR

• Leading producers of cotton include USA, china, India, Pakistan, Uzbekistan and turkey. The current market share of cotton in 56 percent in all fibers. Textile fibers are divided into three basic types according to their sources such as cotton fiber, man made fiber and wool.

• There are 1221 ginning factories in the country.

• Ginning industry has installed capacity of more than one million bales on a single shift basis and total capacity of around 20million bales on three shift bases.

COTTON SPINNING SECTOR• Pakistan has the third largest spinning capacity in Asia

with a spinning capacity of 5% of the total world and 7.6% of the capacity in Asia.

• Pakistan growth rate in this sector has been 6.2% per annum.

• At present, cotton-spinning sector is comprised of 421 textile units (50 composite units and 471 spinning units) with 10.1 million spindles and 114 thousand rotors in operation with capacity utilization of 89 percent and 60 percent respectively, during July-Mar 2007-08

WEAVING & MADE-UP SECTOR

• There are three different sub-sectors in weaving i.e, Integrated, independent Weaving Units, and Power Loom Units.

• This sector is producing comparatively low value added Grey Cloth of mostly inferior quality.

• However, the performance of cloth sector remained far better than last year and charted a growth of 12.6 % during July – March 2007-08 .

Textile Value Chain Process

• Cotton value chain starts from Ginning that adds value to it by separating cotton from seed and impurities.

• But Spinning can rightly be called as the first process of the chain that adds value to cotton by converting into a new product i.e. conversion from ginned cotton into cotton yarn.

• Since spinning is in the beginning of value chain, so all the later value added processes of weaving, knitting, processing, garments and made-ups manufacturing are dependent upon it.

Textile Value Chain Process

• If spinning industry produces sub-standard yarn, its effect goes right across the entire value chain.

• The spinning sector forms the heart of the textile industry. This sector produces yarn for downstream sectors, namely weaving, processing and knitting.

• Pakistan is the third largest player in Asia with a spinning capacity of 5% of the total world and 7.6% of the capacity in Asia.

• Pakistan’s growth rate has been 6.2% per annum and is second only to Iran amongst the major players.

TEXTILE NEWS

• Textile industry of Pakistan worst hit by power cuts

“The energy crisis has forced the textile mills to close their units, especially in Punjab the industry is under severe pressure. Chairman APTMA Punjab, Shahzad Ali Khan, said daily electricity load shedding has increased to 12

hours.”

• “The Pakistan textile industry contributes more than 60 percent (US $ 9.6 billion) to the

country’s total exports. However, currently this industry is facing great decline in its

growth rate. The major reasons for this decline can be the global recession, internal security

concerns, the high cost of production due to increase in the energy costs etc.”

‘’A spokesman for the All Pakistan Textile MillsAssociation (APTMA) claimed that 60 to

70 per cent of the industry had been affectedand was unable to accept export orders coming

in from around the globe, as a result of gas load shedding ‘’

PROBLEMS FACED BY TEXTILE INDUSTRY

• Lack Of Research And Development In Cotton Sector

• Lack of Modernize equipment• Finance bill to burden industry further• Increasing cost of production• Internal issues Pose a Larger Threat for

Pakistan’s Textile Industry• Effect of infaltion

PROBLEMS FACED BY TEXTILE INDUSTRY

• Energy crisis• Electricity crisis• Gas shortage• Tight monetory policy• Removal of subsidy on textile sector• Lack of new investment• Raw material prices• Export performance of textile sector

SPECIAL ORGANIZATION

• All Pakistan Textile Mills Association (APTMA) is the chief organization that determines the rules and regulations in the Pakistan textile industry.

• APTMA is the premier national trade association of the textile spinning, weaving and composite mills.

• APTMA represents 391 textile mills out of which 309 are spinning, 45 weaving and 37 composite units

HUMAN RESOURCE

• The textile sector employs 45% of overall labor force, with 38% of the manufacturing Workers employed under textile sector.

• Pakistan has the advantage of cheaper labor as compared to its competitors, but unfortunately the labor productivity is very low.

• There are hardly any training programs to develop the skills of labor hence, the craftsmen entirely depend upon thier inherited skills with no advancement and movement towards technical knowledge.

CLIMATIC CONDITION

Although Pakistan has the ideal climatic conditions for the growth of cotton providing a factor advantage to the textile industry, but it is also quite vulnerable to pesticides that can lower the yield per hector.

The textile sector is largely dependent on the supply of raw material of the agricultural sector and hence whatever happens to the agricultural sector like floods will adversely affect the textile industry rendering it even more vulnerable to environmental conditions.

TRAINING

• Limited availibility of trained technical staff to maintain and run machinery at full efficiency is a constraint upon the development of Pakistan’s textile industry.

• This shortfall is partly due to a lack of technical education facilities.

• Some of the developments in the textile industry include: Advances in ring spinning, computerized dyeing and finishing, computer-aided designing , manufacturing and developming retailing links hence, all these demand new and greater skills and Pakistan lacks it.

EDUCATION

• Education is essential for the development of the textile industry. Even if the basic factors are present, unless value-addition is not done on them, they will not be productive enough.

• Even if there is not enough production a country could still manage through research and development.

• A recent survey shows technical manpower requirement is 12,750 graduates whereas total number of technical personnel available up tp 2003 was approx. 7,950, so there is a shortage of 4,800 graduates in textile science.

Textile Industry Pros And Cons

Pakistan has the advantage of cheap labor as compared to its competitors, but unfortunately the labor productivity is very low

ADVANTAGE

There are hardly any training programs to develop on the skills of these labors and the craftsmen depend upon their inherited skills with no advancement and

DISADVANTAGE

STRENGHTS

• Self reliance • Manufacturing flexibility• Abundance of raw material production 32• Design expertise • Availability of cheap labour • Growing economy and domestic market • Progressive reforms

WEAKNESSES

Research & Development (R&D) Developed countries are using the technology of

biotechnology and genetic engineering to increase the quality and quantity of their cotton production. In Pakistan, there is very some research done on small scale by private companies. Practically no efforts are being made by the APTMA in the R&D of the textile industry to enhance the quality of its products.

WEAKNESSES

• Highly fragmented sector• High dependence on cotton • Lower productivity • Declining mill segment • Technological obsolescence • Non participants in trade agreements‐

WEAKNESSES

Poor quality standards. Pakistan’s textile industry should focus on

latest material handling techniques and should train workers. The inability to timely modernize the equipment, machinery and labor has led to the decline of Pakistani textile competitiveness

THREATS

New competitors Pakistan is facing new competitors in textile sector such as

Bangladesh, Vietnam and Turkey. Though we cannot avoid competition but we can always stay ahead of them by reforming our strategies and educating our entrepreneurs so as to move one step forward in every aspect.

Phasing out of quota system As the quota system is ruled out by WTO, there is a threat by

the Chinese and Indian manufacturers to gain most of the market share. We have high costs, low labor productivity and inefficient production processes.

THREATS

3. Fashion life cycle Fashion changes day by day these days. Media has so much

penetrated in our daily lives that we easily adapt ourselves as it wants us to. This has resulted in shortening the fashion lifecycle thus increasing the fashion risk.

Now the buyer does not want to wait long for his consignment because he is insecure that by the time it will reach to him he will lost its demand due to change in fashion. Therefore, they prefer to buy from neighboring countries even at higher cost to get their products instantly rather than to wait weeks or months for their consignments to reach them.

• Stiff competition from developing countries; especially China and India.

• Pricing pressure • Locational disadvantage • International labour and environmental laws

ENVIROMENTAL ISSUES

• Textile industry is associated with some environmental issues some of them are:

• Large volumes of water.• Usage of complex chemicals.• Discharge of untreated effluent• Water Pollution.• Air Pollution.• Labours concern.

RECOMMENDATIONS

• Remedy Though Foreign Direct Investment (FDI)• Image Building Of Pakistan To Attract Foreign Direct

Investment (FDI)• Focus On Value Addition• Technology Up-gradation & Capacity Building• Human Resources Development• Subsidy Removal Should Be Taken A Back• Interest Rate Should Be Low Down In Order To Survive

This Industry• Electricity & Gas Tariff

RECOMMENDATIONS

• Removal of Energy Crisis• Exploration of new Export Markets• Reducing the cost of doing Business in Pakistan• Need for Improving Textile Production• Improvement in productivity• Awareness of International Quality Standards• Introducing concept of on-the- job-training• Introducing efficient management techniques

CONCLUSION

Textile industry is the backbone of the Pakistan’s economy. The textile industry of Pakistan plays an

important role in earning foreign exchange, providing employment to the country. Pakistan’s textile

industry is going through one of the toughest periods in decades. Our textile sector needs to capitalize on

the new emerging opportunities by adhering to global best practices, adapting rapidly changing technologies,

better supply chain management while trying to reach global value chains.