KARACHI - Pakistan Yarn Merchants Association (Sindh-Balochistan Zone) Chairman Danish Hanif has rejected the proposal to impose 5 percent Regulatory Duty on import of synthetic filament yarn of polyester and urged the government  to save Pakistan’s polyester filament fabric industry from total collapse.

The PYMA chairman said that duty on polyester filament yarn, which is the basic raw material for fabric industry, was already higher therefore another 5 percent Regulatory Duty was unjustified. He said that on top of the above mentioned, there is an ongoing Anti-Dumping Duty investigation by National Tariff Commission (NTC) and the preliminary findings came out to be 6.23 percent (on average) on Chinese polyester filament/synthetic yarn (PFY). Therefore, the total impact on the import on PFY will be CD 12pc + RD 5pc (proposed) + 6.23pc Anti-Dumping Duty = 23.23pc, whereas the finished polyester filament fabric will have CD 16pc + RD 5pc = 21cp, so the tariff on imported polyester filament fabric will be cheaper than its basic raw material ie polyester filament yarn, he informed, adding that this will be a total disaster for SME sector of the looms in Pakistan and it will lead to huge unemployment.

Danish pointed out that Pakistan started PFY manufacturing at the same time with Thailand, Indonesia Malaysia and India, whereas China started a decade later on similar plants. In due course, all these countries moved to direct spinning process and kept on increasing their capacities as well as modernising them by replacing texturising machines, providing a full range of products domestically as well as internationally at competitive price. On the other hand, the two Pakistani units producing 58,000MT in 2002 remained at the same production capacity till date with third one having very small production still depends on import of pet chips. “Is it justified to put RD to protect 2 or 3 industries vs 5,00,000 people. These 2 or 3 industries are providing employment to only 1500 families whereas 2,00,000 families are associated with the SME sector”, he added.

He was of the view that there is no justification for higher Customs Duty and imposition of RD when the domestic production is only at 25 percent of the total domestic requirement with limited range of products. As you can see from the above polyester chain except PFY, all the other industries are paying custom duty in single digit without any RD imposed.

If the Corporate sectors like Local Spinning Mills and Packaging industry can survive only at 7pc and 8.5pc CD respectively, how can the SME sector of Polyester Fabric Industry sustain 12pc CD along with 5pc RD and a hanging sword of antidumping duties (6.23pc expected to be levied in July 2017), he asked, adding that It would be like a ‘mass massacre’ for the SME sector of polyester fabric loom industry.