Pakistan Textile Journal. Impact of Long Ring Spinning Frames on Yarn Cost

Pakistan produces natural as well as man-made fibres. The natural fibres include cotton, wool and silk. Cotton is the main textile fibre produced in Pakistan. Wool and silk are also produced. Considerable quantity of wool is produced, but silk is produced on a limited scale. Polyester is the main man-made fibre produced in Pakistan. Viscose Rayon and Acrylic staple fibres are also produced on a limited scale. The data pertaining to the production of the above mentioned fibres is reported below.

Pakistan is the fourth largest producer of cotton in the world and the output is about 8.50% of the total global cotton production. The three countries with production higher than that of Pakistan are PR China, U.S.A. and India. Cotton production in Pakistan reached the highest level of 14.265 million bales (170 KG. each) in 2004-05. The production declined to 12.353 million bales in 2005-06, i.e., by 13.403%. The target of production fixed for 2006-07 by The Ministry of Food, Agriculture and Livestock (MINFAL) was 13.82 million bales. However, heavy rains in the cotton belts of Punjab and Sindh damaged the crop! Consequently, the target cannot be achieved. The Cotton Crop Assessment Committee (CCAC) estimates the production at 12.50 million bales in 2006-07. It may be mentioned that the Government of Pakistan (GoP) has allowed free import and export of cotton to ensure abundant supply to the indigenous textile industry.

The textile and clothing products manufactures by the textile industry of Pakistan are mainly from cotton. The average contribution of these exports to the total exports from Pakistan was 62.80% including the 1.92% share of artsilk, synthetic and other textile products. In other words out of total exports of $16.56 billion, share of textile and clothing products was $10.40 billion in 2005.06. This clearly underlines the importance of cotton production to the economy of Pakistan.

Saurer Management AG, Winterthur, Switzerland reports world wool production at 1.22 million tonnes in 2005(1). Australia, PR China, New Zealand and Argentina produce more than 50% of the global wool output. The production of wool in Pakistan reported by Wool Text House(2) is 0.0545 million tons which works out at 4.4672% of the global output. Pakistani wool is mainly used for the production of carpets and blankets by the local woollen textile industry. For the manufacture of apparel and winter wear fine and super-fine merino wool is imported by the local industry.

Sericulture is a cottage scale industry in the northern areas of Pakistan. Natural silk is produced on limited scale. The details pertaining to the annual production of silk are not available.

The production of Polyester Staple Fibre (PSF) started in Pakistan in 1981. Federal Chemical and Ceramics Corporation Limited set up the first plant in Pakistan, the National Fibre Ltd., in the public sector with a production capacity of 12000 metric tons per annum. However, the demand for PSF by the textile industry of Pakistan increased rapidly. This was mainly due to the possibilities of manufacture of fabrics with special characteristics such as easy care, non-iron, wrinkle and crease resistance and wash and wear properties from polyester cotton and polyester viscose blended yarns. Consequently large number of plants were set up in the private sector to cater for the requirements of the textile industry. By 1999-2000 the output of PSF reached 450,000 metric tons per annum. The current output of PSF in Pakistan is about 630,000 tons per annum. Some of the major producers of PSF in Pakistan are Dewan Salman, Dhan Fibres, Ibrahim Fibres, ICI Pakistan, Pakistan Synthetics, Rupali Polyester and National Fibre Limited.

The local production of PSF has created oversupply conditions in the local market. The high cost of local as compared to the price of imported PSF is restricting its consumption by the textile industry. The prices of imported PSF were lower than that of locally manufactured fibre until recently inspite of 6.5% import duty. However, exclusion of PSF from the DTRE scheme by the GoP recently has increased the cost of exports of PSF products and made these exports unviable, thus, the consumption of PSF in Pakistan is likely to decline further.

It may be mentioned that small quantities of PSF are also imported for the manufacture of speciality products. Such imports were 19,938, 14,675 and 12,672 metric tons during the years 2001-02, 2002-03 and 2003-04 respectively.(3).

In order to meet its requirements of VRSF, the textile industry of Pakistan relies on Imports. The first VRSF plant Chemi Visco Fibre Limited was inaugurated in 2004 by the Chemi Group of Industries in the industrial zone of Nawabshah in the province of Sindh. The production capacity of the plant is reported to be 10,000 metric tons initially. The chairman of Chami Group Mr. Usman Ghani Khatri informed that it would be increased to 45,000 tons per annum eventually(4). However, the textile industry meets its requirements of VRSF mainly by imports which were reported to be 37,175 tons in 2003-04 (3).

The first Acrylic Staple Fibre Plant was set up in Pakistan in the late ninetees by the Crescent Industrial Chemicals Limited after an investment agreement with International Finance Corporation IFC. The financing provided by IFC was $41 million against the total project cost of $106.4 million. The details about the annual production capacity of the plant are not available. During 2003-04 the imports of Acrylic Staple Fibre were 48,968 tons. The data of production of natural and man-made fibres in Pakistan has been reported in the foregoing paragraphs. The share of these fibres in the global output is tabulated on the next page for 2005-06.

From the data reported in the table on the next page, it is obvious that Pakistan is one of the major producers of cotton in the world. Its contribution of wool, PSF, VRSF to the global output is 4.47%, 5.94% and 2.05% respectively.

Although Pakistan is the fourth largest producer of cotton in the world yet its domestic output is not sufficient to meet the requirements of the indigenous textile industry.

This is because of the expansion of the installed capacity and modernisation of the textile industry especially the Spinning Sector. Currently, Pakistan has emerged as the third largest consumer of cotton after PR China and India.

Pakistan is also reported as the largest consumer of the US PIMA cotton utilized for production of fine and superfine counts by the textile industry(5). The consumption trends of cotton, wool, PSF and VRSF as evaluated from the data of previous years are reported below.

Cotton production, imports and Consumption data from 2001-02 to 2006-07 is given on the above table. It is obvious from the data tabulated above that the consumption of cotton has been increasing from 2001-02 to 2005-06 at an average rate of 7.40%. Hower, during 2006-07 decline in cotton consumption is anticipated. This is mainly due to the textile and clothing products of Pakistan being costlier by about than 20% those of the regional competitors such as China, India and Bangladesh etc.

because of higher input cost! Consequently, the exports of these products are expected to decline resulting in decrease in consumption of yarn and therefore cotton.

The data of production and consumption of wool in Pakistan for the previous years is not available. However, as already mentioned the indigenous woolen textile industry consumes local supplies of wool for manufacture of carpets rugs and blankets and imports fine quality merino wool for apparel required for winter.

PSF and VRSF are the main man-made fibres consumed in Pakistan for the manufacture of blended yarns. The quantities of these yarns are less than 25% of the total yarn produced in Pakistan.

The consumption of these fibres has been calculated from the data of production of blended yarns on the basis of the usual blend composition of 65:35 and after adding 5% process waste as follows:

From the data reported above the overall percentage increase in the consumption of PSF and VRSF between 2002-03 and 2004-05 works out 14.04% and 18.13% respectively. As already mentioned consumption of cotton increased in 2005-06 by 16.53% as compared to 2004-05. The prospects are that textile industry of Pakistan will continue to rely excessively on cotton producing more than 75% of the total yarn output from cotton. Thus, the cotton man-made fibre consumption ratio is expected to escalate further from the current 80:20 ratio as compared to the global ratio of 60:40.

Useful data on Global Fibre Production received from Dr. Noor Ahmed Memon and assistance received from M/S. Umair Younus, Ume Farooq saqib Ali and Tahoor Ali (final year TIP students) is acknowledged gratefully.

2. Wool Test House, Maketing and Grading Department of the Ministry of food, Agriculture and Livestock. (MINFAL).

5. Islamabad Outlook, Mr. Arif Saeed, Chairman APTMA, Pakistan Textile Journal, August, 2006.

"The American workers' leadership is appreciative of the price that Pakistan is paying for being a close American ally and in confronting terrorism and extremism. It also appreciates the building of a middle class in Pakistan and understands the imperative need for economic development in far-flung areas of Pakistan and Afghanistan." This was stated by Ms Thea M. Lee, Policy Director of the Legislation Department and a senior executive of AFL-CIO, the largest worker Federation in USA, alongwith Jeff Vogt, Global Economic Policy Specialist of AFL-CIO, while talking to Majyd Aziz, ex-President Karachi Chamber of Commerce and Industry and member of Pakistan Delegation on ROZ Advocacy Visit to USA in Washington D.C. USA recently.

The meeting with AFL-CIO was very timely since the sponsors of the ROZ legislation in Congress need the input of the American workers and thus the initiative taken by Majyd Aziz to meet AFL-CIO was regarded as crucial. The outcome of the meeting was a very positive assurance that the AFL-CIO would consider supporting the legislation and that its representatives would also visit Pakistan in the near future. Ms Thea Lee who is also responsible for International Trade further said that the "American labour leadership also believes strongly in the enforcement of labour standards all around the world and it is fully committed to the concept of Decent Work as envisaged by ILO." She added that "the American workers are generally against Free Trade Agreements, Preferential Trade Agreements, or Unilateral Trade Agreements. The Trade Policy of the United States is misguided by both the Democrats as well as the Republicans." The AFL-CIO Director moreover said that the industries in Reconstruction Opportunities Zones as planned for most of NWFP plus the 100 mile band on the Balochistan-Afghanistan border, as well as the total area of Afghanistan, must adopt all labour standards so that there is no child labour, the workers get proper wages, they have the freedom of association, and are not abused or exploited.

Majyd Aziz, who was accompanied by Taha Gaya, Executive Director of Pakistan American Leadership Center in Washington, presented a detailed briefing on the ROZs and informed them that the concept of this USA initiative is that it will be a counter-terrorist strategy, will provide economic opportunities to the population in the areas, will also give employment to women living in the villages there, will also attract social infrastructure such as schools, vocational training institutions, and hospitals, and more importantly induce entrepreneurs to invest in these Zones since exports to USA would be duty-free. He allayed the concerns of the American worker's leadership by informing them that the enlightened employers and moderate workers’ leaders in Pakistan are involved together under the banner of Workers Employers Bilateral Council of Pakistan (WEBCOP) to introduce labor reforms and protect the concept of Decent Work in all industrial estates in Pakistan.

Majyd Aziz further added that the full support of the US workers' leaders is imperative for the ROZs and emphasized strongly that Pakistan needs a level-playing field in its exports to USA since its regional competitors are getting advantages over Pakistan and have encroached upon the share of Pakistani products in USA and Europe. He also said that providing jobs within the proximity of their homes would enable the people of those areas to refrain from migrating to other cities of Pakistan. The children would have access to education and would be shielded from negative influences of those who subscribe to destructive actions and deeds. Majyd Aziz also assured that the Karachi investors would certainly invest in the ROZs since the exports from ROZ areas to USA would have duty-free status and would give better and profitable market access to their products in USA.