Textile industry falling apart : ‘Several mills closed due to high running costs’
KARACHI: All Pakistan Textile Mills Association (APTMA) Chairman Tariq Saud said that the high cost of conducting business had started hitting the textile industry severely, as around 110 textile mills have closed their operations due to the high costs, particularly of electricity and gas tariffs.
“The current state is becoming out of control, which is quite evident from the fall of exports over the last three months,” Tariq Saud pointed out, “A minor increase in clothing exports was noted, which constituted a total of $4 billion of the export industry as against $8 billion of textiles,” he added.
Tariq Saud said that the export data for November 2015 suggested that cotton yarn and cotton fabric exports have dropped by 45% and 22% respectively against the corresponding period in quantitative terms, consequently an overall decline by 15% in value terms, during the same period.
He said that the clothing sector possessed the growth potential of above 20% with the availability of Generalised System of Preference (GSP), but it could not happen due to some adverse circumstances.
He stated that both the spinning and weaving sectors which were the backbone of the textile value chains have faced the brunt of high cost of doing business, which has made them less feasible throughout the country. He lamented that the government was pressing the textile millers, particularly Punjab to purchase LNG at $10.10/MMBTU after extending an earlier offer of $8.5/MMBTU. This would make the industry further unviable as against international competitors.
Chairman stated that the Punjab-based textile industry was under a severe threat of closure because of non-availability of gas, adding that almost around a 100 mills had already shut down and more were heading to the same abyss and fast.
APTMA Chairman urged the government to immediately announce the remaining part of the textile package, which includes (i) DLTL to the entire Textile value chain, (ii) extension of export refinance to spinning and weaving sub-sectors, (iii) safeguards through tariff, (iv) non-tariff measures against the effects of synthetic yarns and (v) availability of fabrics in domestic market and incentives in the export market by matching the regional support package. He further expressed that he hoped that the government would undertake immediate remedial measures to save the Textile Industry from a total collapse.