by Dr. Noor Ahmed Memon

A large number of knitting units have stopped production due to ever increasing cost of inputs in the country. Exports of value-added textiles have been seriously affected as a result of the end of textile quota regime and severe competition from India, Bangladesh, China and other countries faced by the exporters of Pakistan, the reason being subsidies being offered by importing countries to them as well as incentives offered by their own Governments. Since the industry had been facing numerous problems in production, such as technological developments, change in policies and macro-economic factors, social issues in the industrial markets and shifting market structure of the world textile industry
Textile and clothing industry is the most important sector of the Pakistan economy. This sector is the main force behind exports and employment. The knitwear is playing an essential role in value addition in the Textile sector. During the year 2005-06 total exports from Pakistan was US$ 1.75 billion which was almost 12% of national foreign exchange. The use of knitwear has increased largely due to its low price as compared to cotton and blended cloth shirts. It is a convenient wearing apparel and easy to wash. Knitted garments are popular among all over the world, especially in the developed countries, due to their inherent qualities like softness, coolness, sweat absorbent and durability.

According to estimates of Pakistan Hosiery Manufacturers Association current production of knitwear is at the level of 1.1 billion pieces. Out of this production, 60% comprising jersey, knitted fabric, T­shirts, sweat shirts, polo shirts, jogging suits track suits and children outer wear.

USA and the European Union are the two largest markets for garments and knitwear products. Apparel is a rapidly changing business with very short product life cycles and consumer preferences. The major thrust of garments and made-ups exports from Pakistan is on the US market. The European Union is the second largest market for garment manufacturers from Pakistan. Major markets that Pakistani manufactures have so for not been able to explore are the Japanese, Far East and Middle East markets. These markets demand high product standards and in return offer higher unit price realizations.

The production of garments and made-ups in Pakistan is concerted mainly in Lahore, Faisalabad & Karachi. In Lahore all major units are vertically integrated & are involved in knitting, dyeing, finishing & stitching. Major reasons to set up vertically integrated units are the desire of the manufacturer to have full control over all the processes involved and to ensure that right products are delivered at the right time. Specialized and commercial units have not been successful to position themselves to cater to the needs of the export oriented garment industry.

Knitting industry is growing at a rate of 15% to 17% annually. In the absence of proper planning and focused approach towards emerging world textile scenario the local industry foresees a turbulent and a disastrous era beginning in 2007 when China fully avails WTO’s quota free benefits as at present it is being restricted at a growth of 8% per annum.

The huge investment of around $6 billion made during last few years, but this investment did not generate the much needed employment in the country as most of the investment went into spinning, weaving or investment made by large industrial groups. This investment did not go to value addition sector which is also the biggest job provider to skilled and semi-skilled work force, including women.

The knitwear industry has developed rapidly in recent years. At the start of the 2000’s there have been new investments in the knitwear sector especially in and around Lahore. Ammar, Klass textile, Ibex, Irfan, Style, Azam, Disco, Crescent Group, Regent and Saigol Groups, based in Lahore, have set up most modern production units for knitwear with state of the art technology. Improvement made during 1990s in knitting technology and techniques in the processing and finishing have been further improved with dimensional stability of knitted fabrics. Some high quality machine manufacturers have also imported soft flow dyeing machines and tension-free dryers.

The locally manufactured machinery is also supplemented with liberal imports under different modes and export oriented capacity is being developed to earn much needed foreign exchange. Limits of shrinkage have also been narrowed. These advancements, together with availability and use of soft twisted spliced yarn have resulted in the upsurge of world-wide consumption of knitted fabrics.

The knitting technology is a unique and distinct part of the textile industry. In general, textile mills which manufacture knitted fabric, do not manufacture woven cloth.
The distinctive feature of knitting industry is that it comprises highly specialized machinery and technical skills required to produce various type of knits: for example machinery used to manufacture sweater bodies cannot also be used to make hosiery, even though both are knitted products.

Pakistan imported large numbers of automatic flat knitting machines of different brands. Import of flat knitting machines into Pakistan increased from 857 numbers valued Rs128.1 million in 2002-03 to 2,235 numbers valued Rs312,387 million in 2004-2005. However, during the year 2005-06 import of flat knitting machines decreased to 84% in terms of value. Import of flat knitting machines into Pakistan is given in Table-1 and country-wise import of knitting machines is given in Table-2.

At present there are about 1,5000 knitting machines working in the country to manufacture 1.1 billion pieces if knitwear with approximately 60% capacity utilisation. The sector is not only catering for domestic demand, but also has export potential. There is great reliance on the development of this industry because of high value addition content in the form of knitwear.

The products made in Pakistan include T-shirts, jogging suits, jerseys, sport shirts, children wear, gloves, tracksuits, sweaters, socks, etc. The use of knitwear (Hosiery) has increased primarily due to its low price, as compared to cotton and blended shirts. It is a convenient wearing apparel and easy to wash. It requires no vest or under garments due to its inherent absorbent quality.

Knitwear goods exported from Pakistan are known for their fine quality in European and American markets. A series of new finishing processes have been incorporated with improved shades, texture and lustre. Some of the bulk export items, which have gained popularity, are 100% cotton T-shirts, vests, slips, children’s pajama suits, sports shirts, undergarments, bathing suits, knitted garments and knitted tabulator or flat fabrics.
Manufacturers follow international sizes and specifications. They also welcome buyer’s samples, specifications and designs
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Export of Knitwear (Hosiery) increased from 40 million dozens worth $911 million in 2000-01 to 79 million dozens worth $1,751 million in 2005-06. Export of knitwear is given in Table-3. In the international market the USA is the major buyer, followed by UK, Germany, Netherlands, Italy, Canada, France and Belgium. Country-wise export of knitwear is given in Table-4

Challenges: Pakistan textile industry is loosing its competitiveness in international market. Buyers get a low quality service which reduces their confidence to do business with Pakistani industry. As such, Pakistani industry could neither meet the lead time demand of highly profitable textile and fashion products nor could meet the low price expectation of Western markets.

Despite having state of the art machinery and access to capital, our textile industry is compelled to manufacture and export raw, non seasonal and low value textile products where high capital is required to manufacture at extremely low margins.

China, India and Bangladesh are strong competitors. In China industrial cities have grown up, in Bangladesh cash subsidy of 10% is normal plus the industry is getting incentive for conversion. Sri Lanka built image through its GS. India has added 14 million spindles in last two years, 5 million spindles have been installed in Bangladesh where no cotton is grown, expansion of Chinese textile spinning capacity than twice that of India.

Challenges ahead for the industry are search for new markets and product segment is non quota countries and other unexplored areas, maintaining international quality standards, etc. China is the major threat: about 40% of its total export goes to Japan, which is a non-quota country. The two major challenges are low level of technology and modernization in textiles and clothing of Pakistan, which includes the knitwear sector.

As no proper research work has been undertaken, the role of R&D is very much lacking as there is not much research activity in the textile sector. The only one Textile Industry Research & Development Centre (TRIDC) set up with UNIDO assistance by the Ministry of Industry, Government of Pakistan, was closed down some years back. No textile association has own its research institute. In India all major associations have their own research institutes, such as the BITRA in Bombay, ATIRA in Ahmedabad, SITRA and Jute Industry Research Institute (JIRI) in Calcutta. The other Challenges are given as under:

• Frequent fashion changes.
• Anti dumping policies imposed by major importers.
• Non tariff barriers may increase such as standards relating to child labour, human rights.
• Comparatively poor image of Pakistani brands aboard.
• Poor presence in non-quota countries and niche markets.
• Increasing wage rates in other ASEAN & Asian countries.
• China under quota system till 2007
• Government bureaucracy and reactive nature.
• Under-developed weaving sector and unorganized processing units.
• Lack of international marketing efforts.
• Higher rate of interest on loans for modernization and expansion.
• Less awareness in acquiring international quality certifications.