Textile industry of Pakistan

The availability of cheap labor and basic raw cotton as raw material for textile industry has played the principal role in the growth of the Cotton Textile Industry in Pakistan... The te

TEXTILE INDUSTRY OF PAKISTAN

• Textile is a term that comes from “texere” which is a Latin word, that means “to weave”.

• A cloth, especially one manufactured by weaving or knitting; a fabric

About Textile

• The textile industry is often considered the backbone of the Islamic Republic of Pakistan’s economy

Introduction

• The textile industry contributes approximately 46 percent to the total output or 8.5 percent

of the country GDP.

employment to 38 percent of the work force in the country

Value chain of textile industry

DISTRIB CENTRES

RETAIL STORES

CUSTOMERS

textiles contribute over 60% to the total exports, accounts for 46% of the total manufacturing and provide employment to 38% manufacturing labor force The availability of cheap labor and basic raw cotton as raw material for textile

industry has played the principal role in the growth of the Cotton Textile Industry

in Pakistan

HISTORY OF TEXTILE IND.

PIDC came into being which had the main objective of industrializing

the country in major fields

PIDC came into being which had the main objective of industrializing

the country in major fields

The modern development of the sector started in 1953 with the

inauguration of the Valika textile Mill at Karachi

The modern development of the sector started in 1953 with the

inauguration of the Valika textile Mill at Karachi

Pakistan's industrialization began in the 1950s with the textile

industry at its center

Pakistan's industrialization began in the 1950s with the textile

industry at its center

1950’s

HISTORY OF TEXTILE IND.

New private investment began with a highly protected home market

Newly established mills were based upon imported technology but there was a

lack of technical staff and shortages of capital

Newly established mills were based upon imported technology but there was a

lack of technical staff and shortages of capital

By mid sixties there were about 180 units of textiles bleaching, printing and processing units, mostly situated in Karachi and

HISTORY OF TEXTILE IND.

After the separation of East Pakistan Cotton Export Corporation of Pakistan was established which meant that most of the private sector

work was taken over by the state

After the separation of East Pakistan Cotton Export Corporation of Pakistan was established which meant that most of the private sector

work was taken over by the state

The textile industry suffered heavy losses because the export of cotton

was controlled by the CEC

The textile industry suffered heavy losses because the export of cotton

was controlled by the CEC

By 1970-71 there was 113 textile units and the industry had 2,605

thousand spindles and 30 thousand looms

By 1970-71 there was 113 textile units and the industry had 2,605

thousand spindles and 30 thousand looms

1970’s

HISTORY OF TEXTILE IND.

There was a rapid growth in spinning sector

Till 1980-81 spinning continued to expand

The eighties brought a relief to the textile industry due to the boom in international market and industry friendly policies of the

HISTORY OF TEXTILE IND.

World demand for good quality, wide width fabrics grew and replacement and a modernization process started

World demand for good quality, wide width fabrics grew and replacement and a modernization process started

Machinery for producing garments and made-ups was also freed from import duty As a result, a huge expansion in the spinning sector took

place in the first five years of the 1990s

Machinery for producing garments and made-ups was also freed from import duty As a result, a huge expansion in the spinning sector took

place in the first five years of the 1990s

The number of units rose to 440 in 1996-97

1990’s

HISTORY OF TEXTILE IND.

Textile exports managed to increase at a very decent growth of 16%

in 2006.

Textile exports managed to increase at a very decent growth of 16%

in 2006.

Textile exports share in total export of Pakistan has declined from 67%

in 1997 to 55% in 2008, as exports of other textile sectors grew

Textile exports share in total export of Pakistan has declined from 67%

in 1997 to 55% in 2008, as exports of other textile sectors grew

Textile exports in 1999 were $5.2 billion and rose to become $10.5

billion by 2007.

Textile exports in 1999 were $5.2 billion and rose to become $10.5

billion by 2007.

1999 to 2008

HISTORY OF TEXTILE IND.

textile industry is being hit hard due to ongoing energy crisis, depriving the gas supply to the textile units for three days a week.

textile industry is being hit hard due to ongoing energy crisis, depriving the gas supply to the textile units for three days a week.

Pakistan’s cotton cultivation has declined due to several factors ranging from cultivation of traditional varieties and via traditional methods, poor marketing, and failure in making timely payments to cotton producers.

Pakistan’s cotton cultivation has declined due to several factors ranging from cultivation of traditional varieties and via traditional methods, poor marketing, and failure in making timely payments to cotton producers.

The textile industry employs almost 40 percent (2008-09) of the industrial workforce

The textile industry employs almost 40 percent (2008-09) of the industrial workforce

2009

HISTORY OF TEXTILE IND.

Significant changes to the general sales tax (GST) on industrial sector including textiles

Significant changes to the general sales tax (GST) on industrial sector including textiles

(APTMA) had prepared a based report for the federal government in which it has been projected that the textile industry exports would cross over $16 billion compared to its present level of around $8 billion.

(APTMA) had prepared a based report for the federal government in which it has been projected that the textile industry exports would cross over $16 billion compared to its present level of around $8 billion.

2010

HISTORY OF TEXTILE IND.

Energy crisis leaves Pakistan textiles in tatters Textile exports stood at $12.5 billion from July 2010 to May 2011

2011

HISTORY OF TEXTILE IND.

10 percent of the spinning mills and fabric printing units have shut down, and half of the remaining plants are struggling to survive

10 percent of the spinning mills and fabric printing units have shut down, and half of the remaining plants are struggling to survive

thousands of textile workers poured out onto the streets of the city, burned tires, and shouted slogans against the government

thousands of textile workers poured out onto the streets of the city, burned tires, and shouted slogans against the government

Pakistan’s $13.8 billion textile industry is struggling to survive a

critical shortage of energy to run its plants.

Pakistan’s $13.8 billion textile industry is struggling to survive a

critical shortage of energy to run its plants.

2012

HISTORY OF TEXTILE IND.

Textile millers, workers in gas protest

2013

PERFORMANCE CHART

IMPORTANCE OF TEXTILE INDUSTRY IN ECONOMIC SECTOR

manufacturing base, while cotton is Pakistan’s principal industrial crop, supplying critical income to rural households Altogether, the cotton-textile sectors account for 11 percent of GDP and 60 percent of export receipts

TEXTILE SECTOR’S CONTRIBUTION TO THE ECONOMY OF PAKISTAN

industry contributes more than 60% to the country total exports, which amounts

to around 5.2 billion US dollars

ministry, the textile industry itself constituted about 4% of the total size of the economy

TOP BUYERS OF PAKISTANI TEXTILE GOODS ARE

Germany, Norway, France, Canada, Sweden, Australia, etc

IMPORTANCE OF TEXTILE SECTOR

food

IMPORTANCE OF TEXTILE SECTOR

to a figure of 15 million However, the proportion of skilled labour is very less as compared to that of uskilled labour

FORWARD AND BACKWARD LINKAGE

BACKWARD LINKAGE

The backward linkage of textile

sector is in agricultural sector

The backward linkage of textile

sector is in agricultural sector

SECTORS OF TEXTILE INDUSTRY

FACTORS OF PRODUCTION

raw material in textile industry

turkey

N.W.F.P is not known for growing cotton production

growing demand for blended yarn and fabrics has shifted the raw material

source towards the manmade or synthetic fiber in Pakistan

world fiber mix is 45% cotton and 55% non-made fiber

polyester

(that is not made for fibers)

portion of textile exports from Pakistan

Weaving comprises on :

• Wrapping

• Sizing

• Weaving

COTTON GINNING SECTOR

• Leading producers of cotton include USA, china, India, Pakistan, Uzbekistan and turkey The current market share of cotton in 56 percent in all fibers Textile fibers are divided into three basic types according to their sources such as cotton fiber, man made fiber and wool

• There are 1221 ginning factories in the country

• Ginning industry has installed capacity of more than one million bales on a single shift basis and total capacity of around 20million bales on three shift bases

COTTON SPINNING SECTOR

• Pakistan has the third largest spinning capacity in Asia with a spinning capacity of 5% of the total world and 7.6% of the capacity in Asia

• Pakistan growth rate in this sector has been 6.2% per annum

• At present, cotton-spinning sector is comprised of 421 textile units (50 composite units and 471 spinning units) with 10.1 million spindles and 114 thousand rotors in operation with capacity utilization of 89 percent and 60 percent respectively, during July-Mar 2007-08

WEAVING & MADE-UP SECTOR

• There are three different sub-sectors in weaving i.e, Integrated, independent Weaving Units, and Power Loom Units

• This sector is producing comparatively low value added Grey Cloth of mostly inferior quality

• However, the performance of cloth sector remained far better than last year and charted a growth of 12.6 % during July – March 2007-08

Textile Value Chain Process

from seed and impurities

value to cotton by converting into a new product i.e conversion from ginned cotton into cotton yarn

processes of weaving, knitting, processing, garments and made-ups

manufacturing are dependent upon it

Textile Value Chain Process

entire value chain

yarn for downstream sectors, namely weaving, processing and knitting

total world and 7.6% of the capacity in Asia

amongst the major players

TEXTILE NEWS

• Textile industry of Pakistan worst hit by power cuts

“The energy crisis has forced the textile mills to close their units, especially in Punjab the industry is under severe pressure Chairman APTMA Punjab, Shahzad

Ali Khan, said daily electricity load shedding has increased to 12 hours.”

• “The Pakistan textile industry contributes more than 60 percent (US $ 9.6 billion)

to thecountry’s total exports However, currently this industry is facing great decline in itsgrowth rate The major reasons for this decline can be the global recession, internal

securityconcerns, the high cost of production due to increase in the energy costs etc.”

‘’A spokesman for the All Pakistan Textile Mills Association (APTMA) claimed that 60 to

70 per cent of the industry had been affected and was unable to accept export orders coming in from around the globe, as a

result of gas load shedding ‘’

PROBLEMS FACED BY TEXTILE INDUSTRY

PROBLEMS FACED BY TEXTILE INDUSTRY

SPECIAL ORGANIZATION

determines the rules and regulations in the Pakistan textile industry

and composite mills

and 37 composite units

HUMAN RESOURCE

manufacturing Workers employed under textile sector

unfortunately the labor productivity is very low

craftsmen entirely depend upon thier inherited skills with no advancement and movement towards technical knowledge

CLIMATIC CONDITION

providing a factor advantage to the textile industry, but it is also quite vulnerable

to pesticides that can lower the yield per hector

agricultural sector and hence whatever happens to the agricultural sector like floods will adversely affect the textile industry rendering it even more vulnerable

to environmental conditions

efficiency is a constraint upon the development of Pakistan’s textile industry

spinning, computerized dyeing and finishing, computer-aided designing ,

manufacturing and developming retailing links hence, all these demand new and greater skills and Pakistan lacks it

basic factors are present, unless value-addition is not done on them, they will not be productive enough

research and development

whereas total number of technical personnel available up tp 2003 was approx 7,950, so there is a shortage of 4,800 graduates in textile science

Textile Industry Pros And Cons

Pakistan has the advantage of cheap

labor as compared to its competitors,

but unfortunately the labor

productivity is very low

Pakistan has the advantage of cheap

labor as compared to its competitors,

but unfortunately the labor

productivity is very low

ADVANTAGE

There are hardly any training programs

to develop on the skills of these labors and the craftsmen depend upon their inherited skills with no advancement and

There are hardly any training programs

to develop on the skills of these labors and the craftsmen depend upon their inherited skills with no advancement and

DISADVANTAGE

Research & Development (R&D)

Developed countries are using the technology of biotechnology and genetic engineering to increase the quality and quantity of their cotton production In Pakistan, there is very some research done on small scale by private companies Practically no efforts are being made by the APTMA in the R&D of the textile industry to enhance the quality of its products.

• Highly fragmented sector

• High dependence on cotton

Poor quality standards.

Pakistan’s textile industry should focus on latest material handling techniques and should train workers The inability to timely modernize the equipment,

machinery and labor has led to the decline of Pakistani textile competitiveness

Phasing out of quota system

As the quota system is ruled out by WTO, there is a threat by the Chinese and Indian manufacturers to gain most of the market share We have high costs, low labor productivity and inefficient production processes

3 Fashion life cycle

Fashion changes day by day these days Media has so much penetrated in our daily lives that we easily adapt ourselves as it wants us to This has resulted in shortening the fashion lifecycle thus increasing the fashion risk

Now the buyer does not want to wait long for his consignment because he is

insecure that by the time it will reach to him he will lost its demand due to

change in fashion Therefore, they prefer to buy from neighboring countries even

at higher cost to get their products instantly rather than to wait weeks or months for their consignments to reach them

• Stiff competition from developing countries; especially China and India.

ENVIROMENTAL ISSUES

• Textile industry is associated with some environmental issues some of them are:

• Large volumes of water

• Usage of complex chemicals

• Discharge of untreated effluent

• Water Pollution

• Air Pollution

• Labours concern