Gadoon Textile Mills surviving against odds

LAHORE: Located at 1,500 kilometres from Karachi, Gadoon Textile Mills in Khyber Pakhtunkhwa is a rare success story that even after braving inconsistent government policies, several economic recessions, and turmoil in the textile sector, still emerged as the largest spinning mill of the country.

With 250,000 spindles, it is by far the largest spinning mill of the country. It was established in 1992 in Gadoon Amazai Industrial Estate with only 14,500 spindles. The feasibility of the mill was based on imported Pima and Egyptian cotton on the strength of 10 years waiver of all import duties on raw materials for industries located in Gaddon Amazai. “The duty waiver was withdrawn in 1994 with the change of government,” said Abdul Sattar Jumani, the chief operating officer of the company.

He said the viability of operating the mill was severely impacted after change in policy. The jobs of 600 direct workers employed by the mills were at stake. The Karachi-based management was informed that the mill would barely cover its expenses if it had to bear the import duties on cotton. The management decided to save the jobs and operate the mill at no profit.

Today the mill is providing employment to over 6,000 workers, perhaps the highest by any manufacturing concern in KP.

“This was a vital decision that encouraged our employees who repaid the gesture by improving productivity, going for innovation, research and development,” said Jumani. He said the mill through in-house research and development introduced almost all fine count yarns in Pakistan. He said it was the first mill to produce 100 count yarn in Pakistan. It was among the few global producers to introduce 140 count yarn. It introduced 180 count, 200 count and is the first global mill to produce 250 count yarn – the finest ever yarn produced anywhere in the world.

This innovation and research kept the mill going that currently spends Rs250 million monthly on transportation of cotton from Karachi Port and then dispatch of finest yarns around the world through the same port. He said Gadoon Textiles has the distinction of exporting the highest valued yarn from country. Jumani said its 250 count product fetches $38 per kg which was higher than the value-addition of even the garment sector.

The basic concept behind the mill operations was to create employment in this remote area of KP. “We have the most stable workforce in the spinning sector as the turnover of workers is very low every year,” he boasted. He said many employees have been working in this mill from its inception, while numerous are attached with the company for more than a decade.

Interviews with the employees revealed that the management has never delayed the salaries of the workers even during deep recession.

The mill has emerged as an example for other spinners in the country. It has solved the oft repeated mystery as to how the spinners in non-cotton producing countries are surviving while spinners in Pakistan remain under pressure. “We invested most of our earning in the mill instead of diverting the resources somewhere else,” said the COO of the mill, adding that the machines in the mill were upgraded regularly.

It is self sufficient in energy and though it pays industrial connection charges monthly to PESCO it produces its own power from furnace and gas generators. He said the mill has installed power generation capacity of 57MW though its requirement is around 27MW.

There is a state of the art dairy farm in the mill premises with over 500 high milk yielding Australian cows. The entire milk produced at the farm is distributed among the mill workers most of whom reside in the mill colony across the road. The commercial value of the mill supplied is over Rs9 million monthly. There is a well equipped school for the children of the workers that get free education.  

 The Karachi-based group operating the mill is one of the largest providers of jobs in the country. Its tax compliance is exemplary. After slowdown in China and Europe, the exports of the mills have been impacted and sponsors plead with the government for some subsidy on transport. They supplied extra power available with them to the national grid when the government through a paper advertisement requested the textile industry to supply surplus power at price agreed with the textile industry. Only Gadoon Textile Mill out of 28 spinners has been haunted by NAB for supplying excess power at high (government agreed) rates.