by Dr. Noor Ahmed Memon

Textiles and clothing trade is a vital part of the world economy with many nations heavily dependent on the sector for foreign exchange earnings and employment generation. Today textiles and clothing trade accounts for nearly 6% of total world exports. Many of the least developed and small developing countries have built a huge dependency on the sector which often accounts for more than 90% of industrial exports and more than 50% of total employment.With increased global competition, many sectors within the textile industry are increasing production efficiency. Research, innovations and development in technical textiles, yarn quality, clothing products, process performance, fabric finishing, coloration technology and marketing can bring significant advancements in the textile sector and market supremacy.

Fabric processing is the most critical stage of value addition in the entire value chain. Woven or knit fabric can either be dyed or printed depending upon the requirement of the customer who is the garment or made-ups manufacturer. The use of coloured cotton being unique and attractive has the potential to become a part of cotton fabric and apparel market.

Pakistan textile sector is by far the most important sector of the economy contributing 67% to export earnings and engaging 35% of labour force. The entire value chain represents production of cotton, ginning, spinning, weaving, dyeing, printing and finally garments manufacturing. Pakistan has emerged as one of the major cotton textile product suppliers in the world with a market share of about 8% in world cotton cloth trade.

At the time of independence, present-day Pakistan had only two textile mills. These units were self contained, having all the departments such as ginning, spinning, weaving, dyeing and bleaching as well as processing and printing, though the printing of textiles was not as developed in those days as it is now. After independence, the process of development of the textile industry also started picking up gradually.

By mid-sixties there were about 180 units of textile bleaching, printing and processing units, mostly situated in Karachi and a small number in the Punjab. In 1968, in consequence of change in the basis of collection of excise duty from capacity to production, most of the mills closed down their weaving sections. The looms, removed from the mills, were installed outside the mills’ premises in units of four, which have been exempted from excise duty.

About 31,000 looms since 1969-70, continued to operate in the mill sector even after general segregation of weaving. This number decreased to only 9,000 looms in mill sector by the end of June 2006. In the non-mill sector a big majority of the units operate at very low level, having few automatic machinery. In some factories, the printing of textile is done by spreading the cloth on tops of tables and pressing design screens on them, a method which is primitive as compared to the process in use by the modern and automated factories.

According to the estimates, textile finishing industry is embraces almost 731 units, the majority of which independent and complementary to the weaving industry. About 650 independent processing units are working in and around Faisalabad, Gujranwala and Karachi, in which about 50 integrated units have complete finishing facilities.

Pakistan’s textile sector has made considerable advances in production capacity and capability in the last five years. Over the last five years this sector has invested about $ 6.0 billion in modernization and higher value addition. As the current trend is for the establishment of air-jet looms units, open-width processing units, and in printing major strength is of ‘rotary’ screen printing machines, further investment are being made for the import of latest machinery for bleaching, dyeing, printing and finishing. Import of textile printing and finishing machines increased from Rs1.51 billion in 2001-02 to Rs 5.58 billion in 2005-06, thus showing an average increase of 54% per annum. Import of textile printing and finishing machinery into Pakistan is given in Table-1 and country-wise import of printing machines is given in Table-2.

 

Production of cloth (mill sector) increased from 568 million sq. meters in 2001-02 to 583 million sq. meters in 2005-06, thus showing an average 8% per annum. Out of total production of 683 million sq. meters cloth during 2005-06 in mill sector, 49% produced in grey form, 30% dyed and printed, 15% blended and 6% bleached. Category-wise production of cloth (mill-sector) is given in Table-4.

The new idea of free trade under World Trade Organisation (WTO) is reshaping, restructuring and redefining the volume of foreign trade and its direction in almost all economies of the world. In pre-WTO period the West was supplying garments and textile products to the East with complete dominance on textile trade. Now, the scenario is changing fast. The USA and European countries can not afford high cost of labour wages in textile mills and can not compete with the low cost of production in textile and garment sectors. As such, spinning, weaving and finishing capacity of US and European countries is reducing drastically and is increasing fast in some of the Asian countries like China, India, Pakistan, Bangladesh, Sri Lanka and Vietnam. Some of these countries have their own cotton production, while most of them have comparatively cheap labour.
USA a prominent cotton producer and textile manufacturer of the West producing 13.77 million bales some ten years ago has maintained its cotton production level around 20 million (480-lb bales) in last many years, but its level of domestic cotton consumption has been drastically reduced from around 11.0 million bales in 1998-99 to only 5.0 million bales in 2006-2007 and now is estimated around 4.5 million bales in 2007-2008 - some 58% decrease in ten years.

The study of the cotton production and consumption figures of the last five years reveal that China and India have made tremendous progress in increasing its productivity, production and spinning capacity. China has also increased its spinning capacity largely, as is evident from the reports of International Textile Manufacturers Association in Zurich. These reports indicate that in the last six years 2000-2005, China has imported 51% of the world total cotton-type spindles shipments, India 13% and Pakistan 10% while balance 26% share goes to rest of the countries of the world.

Almost 3/4th share of the world shipments of spindles went to three Asian countries i.e. China, India and Pakistan. Cotton/textile business is shifting from USA and other European countries to Asian countries, specially China, India, Pakistan, Bangladesh, Sri Lanka and Vietnam. These Asian countries would be manufacturers and exporters of textile goods and garments and USA and European countries would be importers.

Asia has a share of about 62% in world cotton production and has 76% share in world total cotton consumption. India and Pakistan jointly produce 26.5% of world cotton and consume 27.6% of world’s total consumption. China alone produces 26.8% of world cotton and its mills consume around 41% of world total consumption. This trend of shifting of cotton / textile industries is expected to continue in the years to come till the saturation stage. Pakistan should make all-out efforts to increase its share in textile and apparel exports specially to US and EU countries.

With the end of the textile quota system and increased globalisation of economy with new players like Vietnam and Cambodia are entering the export arena vigorously, the global economic paradigm for a textile-exporting country like Pakistan has to be changed to keep pace with the developments.

The Government is trying to enter the Free Trade Agreements with the major and minor countries. It has signed FTA deal with China which offers great opportunities to Pakistan exports. A similar deal is being negotiated with the US, the European Union and the Gulf Cooperation Council. It has already signed an FTA with Sri Lanka which has become operational. Negotiations for such a deal are also going on with Bangladesh, Nepal, Malaysia and Jordan.

These agreements would open up vast markets with large demands, particularly in China. Pakistan should have surplus to meet their needs. If that is not done, goods from other countries with no or nominal tariff would flood in markets, as Chinese goods are doing at highly competitive prices. So producers have to defend own markets through open market mechanism and try to export more and more.

To enlarge the exports to $45 billion by 2013, exporters have to focus on garments and make them increasingly value-added and their brands have to earn a name abroad for quality, style and packaging. Today the value addition of garments in Bangladesh is higher than value-addition in Pakistan not to speak of the Indian output which is higher than Bangladesh garments. This situation must change and the Government of Pakistan should work hard to export more garments and earn more foreign exchange.

To achieve these ends, Pakistan needs highly skilled workers and in large numbers to meet the future needs of the industry. It is hoped that efforts would produce enough workers to produce quality goods to boost export. In order to be competitive in this ever demanding world of lean retailing, the apparel industry needs to have an abundance of skilled, inexpensive, productive labour to remain competitive in a post-quota world.