Over 100 textile mills closed in a year: Aptma

KARACHI: The All Pakistan Textile Mills Association (Aptma) Chairman Tariq Saud has said that at least 110 textile mills have closed down their operations in the last one year due to the high cost of doing business, particularly the cost of electricity and gas. 

In a statement on Tuesday he said the high cost of doing business has started hitting textile industry severely, as further closure of operations of the textile mills was reported to the association. "The current situation is fast getting out of control, which is quite evident from the free fall of exports over the last three months," he pointed out. 

He said the export data for November 2015 suggests that the exports of cotton yarn and cotton fabric have dropped by 45 percent and 22 percent respectively against the corresponding period in quantitative terms, consequently an overall decline by 15 percent in value terms during the same period.  

"There is a nominal increase in clothing exports, which constitute $4 billion in total exports of industry as against $8 billion of textiles," he added. 

He said the clothing sector possessed the growth potential of above 20 percent with the availability of GSP plus facility, but it could not happen because of the adverse circumstances. 

Meanwhile, he said, both the spinning and weaving sectors, backbone of the textile value chain, have faced the brunt of high cost of doing business, which has made them unviable throughout the country. 

He said 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 will make the industry further unviable as against international competitors,” he said.

He said the Punjab-based textile industry was under severe threat of closure because of non-availability of gas. "Some 100 mills have already been closed down and more are heading to the abyss fast," he added.  

Aptma Chairman urged the government to immediately announce the remaining part of the textile package, which includes DLTL to the entire textile value chain, extension of export refinance to spinning and weaving sub-sectors, introduction of safeguards through tariff, non-tariff measures against the inroads of synthetic yarns and fabrics in domestic market, and availability of incentives in the export market by matching the regional support package.