KARACHI: The textile sector has restarted making investment to enhance its production capacity, which is evident from the phenomenal growth in the import of textile machinery in February over the same month of previous year.
Despite the fact that a gloomy scenario surrounded the textile sector, it did not give up and began making investment in the form of importing textile machinery. The import cost in February was $23.10 million as against $7.992 million in the same month of last fiscal year, posting almost 190 percent growth, according to sources in the industry.
In July to February period of the current fiscal year, the import of textile machinery also recorded 3.11 percent growth to $163.844 million as compared to $158.897 million in the corresponding period of last year. “In the current tough and disappointing scenario, investment in textile industry is like a silver line at the end of the tunnel and reflects that still there are chances of revival in this important sector of the economy,” textile the sources opined.
According to the industry people, the growth in the import of textile machinery has been recorded after a long spell of decline, which some years back was going up on the back of new investments being made in the textile units after the dismantle of quota system of textile exports.
The stiff competition put up by the competitors in the global markets dented the Pakistani textile sector, which became uncompetitive in its traditional markets due to high tariff slabs on Pakistan’s textile goods in comparison to its competitors like Bangladesh and Vietnam, which have greater market access by enjoying preferential treatment in the European and American markets. Furthermore, the chronic issues of high financing cost, power and gas shortage coupled with their high charges domestically had devastating impact on textile goods when compared with China and India, which gave concessions and incentives in the shape of subsidies on power and financing.
Before the removal of quota system, the textile industry made around Rs 5 billion investment by modernising and expanding its units to prepare itself in the post quota regime. However, all the preparations vanished when the high tariffs were imposed on its import by western markets and domestic issue confronting it made it redundant to have a quantum jump in the export.
“Presently whatever investment is being made it is mostly confined to the denim sector whereas spinning and value-added sector have not attracted this investment so far,” said Chairman Al Pakistan Textile Mills Association (APTMA) South Zone Yasin Siddik.
Talking about the investment in spinning and value-added sector, he said that so far new investment was being made in this sector, however spinners were considering to enhance their capacity after the growing of yarn internationally with the export orders multiplying each day.
However, the abrupt move of the government to restrict the yarn export dampened the spirits to go with their plans, Siddik said.
Source: http://www.dailytimes.com.pk/default.asp?page=2010\03\25\story_25-3-2010_pg5_1
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