Spinning sector of Pakistan can once again become viable through value addition

The spinning sector of Pakistan was once a thriving export-oriented sector, but due to increased electricity/gas tariff and shortfall of cotton bales, the sector has been unable to compete in the world markets. With the world facing the challenge of Covid 19, the situation of the textile sector particularly the spinning industry is at stake.

The government had promised to charge a fixed gas tariff to the export-oriented sector. Most of the sector had shifted their entire heavy electricity generators to gas incurring huge costs, but the government had increased gas tariff to an unviably high level.

To counter this adverse situation, the present government has announced competitive electricity tariff for the export-oriented sectors to encourage new investments and revival of closed units of textile sector. As the export-oriented industry can not sustain exports on high electricity bills or gas tariffs, the government must resolve this issue without any delay.

On the other hand, Pakistan currently needs more than 14 million bales of cotton, while the actual production is around only eight million bales. Currently, cotton imports from the United States and other countries are helping the textile industry meet the shortfall while having to cope with challenges such as high enegy costs. Cotton imports are expected to increase in the coming years as leading vertical units in the home textiles, denim and knitting sectors shall continue importing US cotton to produce high-quality yarns. Several countries are importing cotton and yet have a thriving spinning industry. This is because of competitively energy pricing by their governments as well as a focus on producing yarns of high value and quality that find ready markets in their own countries and abroad.

With the improved power situation, the spinning sector will be on its path of recovery and becoming an export-oriented sector once again. However, the fundamentals of the textile industry have now changed. The spinning industry should focus on diversification and move towards high-value addition to ensure a viable future for the entire textile supply chain.

The real and sustainable growth and progress will come to the spinning industry of Pakistan not only through government subsidies but also with the modernisation of their installed capacity.  Due to old technology still in use by the spinning sector the energy consumption is unviably high. The latest spinning technologies from the various leading spinning machinery manufacturers offer high production with low energy consumption. At the same time with the automation of the spinning plants, the industry will gain efficiencies required to sustain and survive in these difficult times.


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