Textile value chain unites to strengthen weak links

LAHORE: Textile value chain, feeling threats of closure, has realized the factors impacting their growth could only be addressed though a united representation with the government instead of pleading their cases separately.

Five major textile associations met under the chairmanship of Amir Fayyaz, the central chairman of All Pakistan Textile Mills Association (APTMA), to discuss the issues impacting the textile value chain; and also to narrow down differences on some matters.

The meeting was also attended by Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA), Pakistan Hosiery Manufacturers Association (PHMA), All Pakistan Textile Processors Association (APTPA), and All Pakistan Textile Exporters Association (APTEA).

All stakeholders in the value chain were of the view that they could not grow in isolation as each chain is dependent on the other. The cost of fabric would be higher if the spinning industry is routed out as import of yarn would be costlier. They realized the Indians were heavily subsidizing their yarn to boot Pakistani spinners out of production. 

As businessmen they had the foresight to see the Indians would charge more once the local spinning industry closes down. The value added apparel sector now wants the government of Pakistan to discourage import of those Indian textile products that are produced locally -- including yarn. They also agreed that only those fabrics be allowed to be imported that are not produced in Pakistan. The basic textile sector also agreed to oppose import of textile products not produced locally.

Prior to this, the stance of the apparel sector was the import of Indian yarn should be allowed at zero duty. This stance was adopted way back in 2009 when the Pakistani yarn exports increased exponentially at the expense of local sales.

The then government was forced to impose export quota on yarn. Thereafter, the basic textile sector and the value added apparel sector parted ways and met the policymakers separately. Absence of unified stance on textile policies created chaos all around.  The policymakers stalled decisions as the demand of each sector was opposite to the wish list of the other. This, perhaps, is the reason, the textile package promised in September 2015 has not been notified even after more than 14 months.

While the basic textile sector made hectic efforts to convince the finance minister, Ishaq Dar, for textile concessions; the value added sector targeted the federal commerce minister for a different type of package. The stalemate, this approach created, resulted in inaction. The government planners were hoping that with the strengthening of macroeconomic indicators there would be an automatic growth. The planners failed to factor in the rapid changes taking place in global trade. In India, the textile value chain adopted a unified approach and got packages at every stage of change. In Pakistan, the contradictory demands by value chain stalled the packages and each subsector of textile suffered badly.

Former chairman PHMA, Shahzad Azam Khan, representing PHMA Punjab, appealed to the value chain stakeholders the inter-association issues should be resolved through a spirit of ‘give and take.’ 

He said there was full consensus on affordable power and energy. Khan added the provincial governments should be engaged where federal government cannot provide concession. The PHMA representative cited the case of RLNG. He further said the state governments in India grant subsidy on power and other utilities. Khan urged the Punjab government to bail out the industries of the province on high gas prices. The former PHMA chairman said a revival of the industry would create millions of job in the province.

Chairman PRGMEA, Ejaz Khokhar, said either the federal government provide level playing field to the industries or the provinces intervene to ensure fair play. At the same time, he added the entire textile value chain would have to put its house in order. Khokhar  was of the opinion that in a highly competitive global market the slightest inefficiency puts the exporter at a disadvantage. He said internal inefficiencies should be immediately addressed. The inefficiencies, caused by bureaucratic hurdles and corruption, should be taken up with the planners by the entire value chain.  The PRGMEA chairman finally said we cannot let any component of the chain to collapse because it would finally lead to the demise of entire chain.