The Pakistan Textile Industry – An Overview

The textile industry is one of the most important sectors of Pakistan. It contributes significantly to the countrys GDP, exports as well as employment. It is, in fact, the backbone of the Pakistani economy.

Established capacity

The textile industry of Pakistan has a total established spinning capacity of 1550 million kgs of yarn, weaving capacity of 4368 million square metres of fabric and finishing capacity of 4000 million square metres. The industry has a production capacity of 670 million units of garments, 400 million units of knitwear and 53 million kgs of towels.

The industry has a total of 1221 units engaged in ginning and 442 units engaged in spinning. There are around 124 large units that undertake weaving and 425 small units. There are around 20600 power looms in operation in the industry. The industry also houses around 10 large finishing units and 625 small units.

Pakistans textile industry has about 50 large and 2500 small garment manufacturing units. Moreover, it also houses around 600 knitwear-producing units and 400 towel-producing units.

Contribution to exports

According to recent figures, the Pakistan textile industry contributes more than 60% to the countrys total exports, which amounts to around 5.2 billion US dollars. The industry contributes around 46% to the total output produced in the country.

In Asia, Pakistan is the 8th largest exporter of textile products.

Contribution to GDP and employment

The contribution of this industry to the total GDP is 8.5%. It provides employment to 38% of the work force in the country, which amounts to a figure of 15 million. However, the proportion of skilled labor is very less as compared to that of unskilled labor.

Organisations in the industry

All Pakistan Textile Mills Association is the chief organization that determines the rules and regulations in the Pakistan textile industry.

Opportunities available

The world demand for textiles is rising at around 2.5%, due to which there is a greater opportunity for rise in exports from Pakistan.

According to the Pakistan Ministry of Textiles, an export target of 13 billion USD has been fixed for the year 2007-08. Hence, the textile units in Pakistan have an opportunity to expand their scope.

Challenges

The Pakistan textile industry is currently facing several challenges. According to experts, there is a need for the industry to improve the quality of its products. There is also the need for greater value addition in its products.

The textile machinery used in Pakistan is imported mainly from the countries of Japan, Switzerland, Germany, China and Belgium. The technology that is in use in the industry leaves a lot to be desired. It is necessary that the industry undertake an upgradation in the technology used. Also, there is lack of efficient R&D and training.

The Pakistan textile industry is facing tough competition from the Indian, Bangladeshi and Chinese textile industries. The cost of power in Pakistan is high as compared to that in other countries.

On account of these reasons, the Pakistan textile industry is going through a critical condition.

According to the National Assembly Standing Committee on Textile Industry in Islamabad, "Pakistan needs to improve bilateral relations with the US for greater market access.

Current scenario

The growth in the textile exports of Pakistan is gradually declining. Textile exports in Pakistan grew from 8.92 billion USD in 2004-05 to 10.11 billion USD in 2005-06, reflecting a growth rate of 18%. As against this, in the current year, export growth has been only 5%. This is growing to be an issue of concern for the Pakistani government.

The exports of readymade garments grew from 1.190 billion USD to 1.254 billion USD in the period July 2006 May 2007 as compared to the same period in the 2005-2006. This amounted to a growth of 5.35%. The exports of knitwear also grew from 1.570 billion USD to 1.773 billion USD during the same period, recording a growth rate of 12.94%.

However, there was a decline in the growth rate of export in raw cotton, bed clothes as well as cotton cloth during the same period. The export growth rate of raw cotton fell by 21.73%, while that of bed clothes and cotton cloth dropped by 3.10% and 4.10% respectively.

In order to bring the Pakistan textile industry out of its current crisis, it is necessary that certain strict measures be taken to meet the challenges that the industry is facing.