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September 3, 2019

Textiles: spinning threadbare yarn amid looming limbo

Business

September 3, 2019

LAHORE: The second decade of this century saw a transformation in the efficiency of the textile industry with the advent of innovative equipment that consumes 60 percent less energy, produces more yarn/fabric per hour, and requires only 35 percent of the workforce; however, this kind of upgrade is still a long way from Pakistan.

Data from International Textile Manufacturers Federation reveals that in last decade (data available from 2008-09 till 2016-17) Pakistan during this period added 20 times less spindles than China, nine times less than India, and 1.2 times less than Bangladesh. In the same way it installed 62 times less shuttle-less looms than China, 11.5 times less than India and 5.4 times less than Bangladesh. We must keep in mind that this textile machinery continued increasing in efficiency almost every year.

According to the available data China added 6.1 million spindles in 2008-09, 3.7 million in 2009-10, 5 million in 2010-11, 7.9 million in 2011-12, 6.4 million in 2012-13, 6.2 million in 2013-14, 4.4 million in 2014-15, 3.3 million in 2015-16, and 3.9 million in 2016-17. India during the same period added 20.4 million new spindles and Bangladesh added 3.75 million spindles. Pakistan on the other hand added only 2.45 million spindles. Regionally we are far behind our three competitors in modernisation of yarn machinery. China in the meantime has also relocated sizable spinning equipment to Vietnam, which is incidentally outcompeting Pakistan yarn in global yarn markets.

The situation is far worse in weaving where China has added 427,000 shuttle-less looms during the period under discussion. India has added 89,000 shuttle-less looms and Bangladesh 41,000. Pakistan on the other hand has added only 7,600 modern shuttle-less looms. We have much less capacity to produce fabric than even Bangladesh. It is pertinent to note that new spinning machines compared with those used in Pakistan are speedier (produce more yarn per hour), consume 60 percent less power and employ only one third of the workforce.

The chances for yarn markets are limited because the main yarn markets now are China, India, Bangladesh, and Vietnam. Each of these countries has increased their yarn-making capacities and is an efficient producer of yarn. Pakistani fabric producers have not introduced new varieties and are now limiting themselves to the huge domestic market. The new looms are not as efficient and limit the penetration of Pakistani fabric in the global markets.

In 2005, when the textile trade became quota-free, all the creditable institutions declared Pakistan’s basic textiles the most efficient in the world. The reason was that besides having competent skilled textile labor its machines were new and better than its global competitors. Even then the industry further upgraded its equipment in the next two years. That was the last technology upgrade of basic textiles in Pakistan. Fourteen years onwards the basic textile industry of Pakistan is in shambles operating on 12-14 years old technology. The new technology has also reduced the advantage of cheap labour that Pakistan currently enjoys. The new technology is automated and its labour requirements are 1/3rd that of new machines. High power consumption of Pakistani textile machinery further erodes this advantage.

The inability to upgrade technology played havoc with the textile industry. Already 25 percent of the industry (over 100 mills) has closed down mainly due to obsolete and inefficient spindles and looms. Some critics blame the textile entrepreneurs for their failure to upgrade technology when the going was good.

However, Gohar Ejaz, a top industry official at All Pakistan Textile Mills Association (APTMA), laments that it was not because of lack of resources that the technology upgrade was not undertaken but it’s due to various problems industry faced because of inconsistent government policies.

Ejaz said this government had removed most of irritants. The APTMA leader said the main irritant in the past one decade was the shortage of power and energy; though and a number of issues were resolved in last two years, the cost of energy for Punjab (where 70 percent industry is located) was very high. He said the present regime immediately after assuming power assured that the power and energy rates would be resolved on long-term basis.

Ejaz said the power and energy prices had been reduced but the government notified these rates on six-monthly basis. The industry, he said, needed long term 4-5 years stability in current rates, adding, to attract fresh investment long-term power and energy supply must be assured at regionally competitive rates as available currently. Ejaz claimed that at least one hundred entrepreneurs in Pakistan were ready to invest $100 million each in new textile units if a long-term competitive energy/power tariff is announced.

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