Readymade garment industry surviving against intense international competition
by Prof. Dr. Noor Ahmed Memon, Dean KASBIT.

Export of fashion garments from Pakistan increased from 25 million dozens worth US$ 1.62 billion in 2011- 12 to 32 million dozens worth US$ 2.19 billion in 2015-16, thus showing an average increase of 8% in term of value. Major buyers of fashion garments during 2015-16 were USA, UK, Spain, Germany, The Netherlands, France, Italy and UAE.

Fashion garment industry has emerged as one of the important small-scale industries in Pakistan. These ready made garments and products have large demand both at home and abroad. The local requirements of garments are almost met by this industry. The garment industry is also a good source of providing employment opportunities to a large number of people at a very low capital investment. Most of the machines used by this industry are imported or locally made and assembled.

The fashion garment industry started in 70's in Pakistan. With the passage of time and industrialisation, this industry expanded very rapidly. The majority of the units making cotton fashion garments are medium and small-size in terms of machines, workers and output, with a few notable exceptions scattered throughout Pakistan.

The fashion garment industry uses both locally produced and imported raw- materials, but it mainly uses locally produced raw materials. Both locally produced and imported are readily available in the market. The production of cotton and cotton blended cloth, which are largely used by the garment industry, is not only sufficient but also surplus for exports for the domestic market.

Besides the mill sector, the non-mill sector also produces cotton cloth which is widely used by the garment industry. The non-mill sector is scattered and unorganised and according to a rough estimate, there were about 250,000 looms operating in the non-mill sector. The power loom sector produces pure cotton, polyester, viscose and blended fabrics, which usually fetches low prices in the market.  The other locally produced raw materials of the garment industry which include lining, thread, buttons, interlinings, labels and polythene are also imported or at times manufactured by the un-organised sector.

Import of machinery: The automatic sewing machines are mainly imported from China and Germany, and are capable of working at high speed up to 4,500 stitches per minute. These are especially suitable for assembly line operations and are mostly used by the organised sector. Besides automatic sewing machines, household sewing machines along with parts and electric irons are also being imported. Imports of sewing machines are given in Table 1.

Table 1: Import of Sewing Machines
                                                                                                               Value : Rs. Million

Machines / Parts 2015-16 2014-15
Quantity Value Quantity Value
 Sewing Machines (Household) 32,137 99,218 9,454 51,601
 Automatic Sewing Machines 3,673 188,507 2,919 254,256
 Other Sewing Machines (Industrial) 97,269 2,665,764 87,644 2,352,453
 Total 133,079 2,953,489 100,017 2,658,310

 Source: Pakistan Bureau of Statistics.

Other important machines used by the fashion garment industry are the over-locking machines, which is used to trim and over lock the edges of cut cloth. The specialised machines are used for cutting, making button holes and stitching of buttons.

Exports: The apparel segment is the highest value added a link in the entire textile value chain. The global trade in the sector accounts for 53% of the total value of global textiles trade and is consistently growing since the last two decades. The USA and the European Union remain as the largest markets for fashion garments and other apparel products with a combined share of 73% in the total global clothing trade.

Pakistani fashion garment industry is able to offer a large volume of its products for export. The industry turns out various kinds of garments for men, women, boys such as plain / embroidered /printed dresses, blouses, maxis, shirts, skirts, night dresses, track suits, middies, trousers, sub-dresses etc.

Production of garments by units depends entirely on export orders directly or indirectly. These orders have somewhat risen in terms of value, but they have fluctuated widely in terms of quantity. Export of fashion garments from Pakistan increased from 25 million dozens worth US$ 1.62 billion in 2011- 12 to 32 million dozens worth US$ 2.19 billion in 2015-16, thus showing an average increase of 8% in term of value. Export of readymade garments is given in Table 2.

Table 2:  Export of Apparel from Pakistan

Year

Quantity
(Million Doz)

Value
(US $ Million)

2008-09 29 1,230
2009-10 28 1,230
2010-11 34 1,774

2011-12

25

1,616

2012-13

27

1,800

2013-14

30

1,909

2014-15

31

2,095

2015-16 32 2,195

 Source: Trade Development Authority of Pakistan.

Pakistan exports fashion garments to a number of countries. Major buyers of fashion garments during 2015-16 were USA, UK, Spain, Germany, The Netherlands, France, Italy and UAE. The country wise exports of fashion garments are given in Table 3.

Table 3: Country wise Export of Fashion Garments
                                                              (Value in $ 000)

Country 2013-14

2014-15

2015-16
 Germany 190,963 238,524 271,367
 Spain 227,517 306,399 294,474
 France 85,138 73,778 70,256
 Netherlands 118,414 136,330 124,171
 U.A.E 46,349 56,235 63,391
 Sweden 38,980 39,403 41,803
 Poland 22,802 28,411 44,556
 U.S. America 498,203 486,816 496,426
 United Kingdom 261,329 274,758 286,788
 Italy 75,890 80,684 82,510
 Belgium 129,099 139,233 142,839
 Canada 34,198 26,513 28,595
 All others 180,441 208,005 248,040
 Total 1,909,323 2,095,089 2,195,216
 Source: Trade Development Authority of Pakistan.

E-Commerce Businesses: Fashion has become an integral part of the operations of E-commerce businesses. It has helped to contribute a great deal to the revenues and profits of online businesses with a recorded 16.648 million fans on the E-commerce platform.

Fashion designers, both male and female, have mushroomed with the recent collection of the most innovative clothing, footwear and accessories’ designs in the fashion and apparel industry. Amidst the lawn frenzy and designers swooping the fashion arena with their latest lawn collections, it is not long before, these fashion trendsetters will have set the stage for the biggest fashion revolution in the country, in most part led by E-commerce ventures and online businesses.

According to the E-commerce report, clothing is a leading product category on the Pakistani E-commerce landscape. One of the observations of the report is that in the 3-year period spanning (2013-2015) T-shirts, hoodies, shrugs, shirts etc. are the highest grossing clothing items for each of the four quarters every year.

As with other commercial ventures, E-commerce businesses also face a surge or escalation on the demand for fashion products during specific times of the year. These include religious festivals such as Eid-ul-Fitr and Eid-ul-Azha as well as special occasions such as Mothers Day, Valentines Day. E-commerce players can capitalise on the opportunity to yield maximum turnover and profits.

Another research-based finding by Euromonitor that the fashion industry in Pakistan is forecasted to grow by 15% from the year 2013 through the year 2017.

Future Prospects: Pakistan is one of the leading textiles exporting countries in the region and got the GSP Plus status from EU countries. Its textile industry has been competing for global market without any roadmap and support, while our major competitors like India and China were utilising all channels and resources for capturing the market share.

Under the prevailing situation, we need to adopt the same approach to survive in the global market. To boost the exports in the apparel sector, Pakistan needed to find its 'pockets of excellence' with the identification of segments, it possessed best potential to perform. Building relations and winning the trust of buyers was equally important.

To achieve this, buyers must be assured that the country has strong mechanisms in place to address issues that may hamper the sustained supply of items that are being imported. Ravindra A Yatawara, Senior Economist, World Bank Institute highlighted this aspect while speaking at a seminar held at Sustainable Development Policy Institute (SDPI).

He said that the strategic segmentation in this sector is important to identify as one of the fundamental ways of doing business. Earlier, Dr Vaqar Ahmed, Deputy Executive Director SDPI, explained that the competitiveness of the apparel sector has been hurt due to high cost of doing business in Pakistan which includes high import tariffs, energy and security costs.

References

  1. Pakistan Bureau of Statistics.
  2. Pakistan Economic Survey- 2015-16.
  3. Readymade Garments Manufacturers and Exporters Association (PRGMEA)
  4. Trade Development Authority of Pakistan.

 

 
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