Basic textiles need investment to regain global competitiveness

LAHORE: Pakistan’s entrepreneurs need to invest in balancing, modernisation and replacement of weaving and spinning industries to regain the lost share of basic textiles in the international market, industry experts agreed. 

Over the years, stagnant investment in industries has made most manufacturing units unviable. Technology is transforming so rapidly that machines bought a decade back have turned obsolete.

Only a decade back, Pakistan’s basic textile industry enjoyed a comparative advantage over all of its competitors in the world, according to research papers of 2005. Today, the industry lost its international competitiveness.

Unfortunately, local entrepreneurs remained complacent, while their competitors invested in upgrades of their spinning and weaving machines. 

Bangladesh and China, which were used to import yarn and fabric from Pakistan, relinquished the buying after developing self-sufficiency. Our major buyer was China. We were complacent that China would opt out of basic textile production due to increasing wages. 

China, however, has been adding new spinning and weaving machines every year. What we failed to realise was that China was trying to remain competitive by upgrading its technology.

The new spinning and weaving machines are much faster and operational on one-third workers and consume 40 percent less energy. 

Bangladesh, the second largest buyer of Pakistani yarn and fibre, has added new spinning capacities, which are almost equivalent to our total spinning capacity. The country added five times more weaving efficient capacities than Pakistan. This, perhaps, is the main reason that basic textile orders from Pakistan continue to decline.

Another newly emerging economy Vietnam has also installed new modern yarn and weaving capacities. So much so that Vietnamese yarn exports to China increased 34 percent in September.

During the same month, Pakistan’s export to China declined 29 percent. Indian yarn exports to China fell 73 percent. Consumption of local yarn in China rose five percent in September.

Amir Fayyaz, chairman of the All Pakistan Textile Mills Association said textile entrepreneurs should upgrade their technology if they want to compete globally.

Introduction of new technologies and globalisation resulted in regular shift in comparative advantage to different regions, creating new jobs as well as shedding some jobs as redundant industries are closing.

New jobs require different skills and therefore workers losing their jobs in dying industries, for example, cannot be accommodated in any of the new industries. The new technologies save labour, and gadgets like computers and robots replace human workers. A labour, lacking new skills, finds it difficult to get employed in a modern setup.

World over, basic textile industries systematically upgrade technology, replacing 10 to 15 percent of older machines with new technology in a certain period. They impart new tech training to their workforce. 

Currently, Pakistan’s industries are sitting on inefficient technology. They are losing export orders as a result of which many workers have lost jobs. They are also weakening future job opportunities for them.

The government should facilitate employers and workers by evolving strategies for skills enhancement. Right now, the industries resent wage increase because they are operating on obsolete technology.

If they have efficient technology to produce more products with fewer inputs like power and human resource then they will be content on increase in wages.   

The technology upgrade will reduce informal economy as high tech production will not be possible without documentation. The output will be of better quality and the cost of production will be relatively lower. —Mansoor Ahmad