Textile exporters have pinned hopes on upcoming financial budget for the industrial and economic stability, and urged the government to support the crises-hit textile industry to boost exports.
The Pakistan Textile Exporters Association leaders also asked the government to remove hurdles and provide necessary incentives to boost exports, expand economy, create new jobs and generate precious foreign exchange reserves.
Chairman Sohail Pasha and Vice Chairman Rizwan Riaz Saigal said that they endured difficulties in the outgoing year as the textile industry, particularly in Punjab, remained in the grip of crises. Now, they added, the textilers have pinned their hopes on the coming fiscal year for betterment.
The industries lack funds while the rising cost of production and deteriorating economic conditions were the major issues besetting the industries that has slowed down the economic activities, they said. They elaborated that the most ticklish issue is the rising cost of production as prices of raw materials and inputs have skyrocketed making the products uncompetitive in international market. Severe energy shortage and high cost of doing business, which have stalled fresh investment in manufacturing for some years, have now brought the country's textile industry to a point where large-scale closure cannot be ruled out, they said.
"Growing energy shortage has led to the closure of almost one-third of the country's textile manufacturing capacity and adversely affected its reputation as a credible supply source. Our exports are becoming dearer than those of China, Bangladesh and India owing to rising energy, credit and labour costs. With the current situation of energy supply to a much larger province, which covers 70% of textile sector, the plan of doubling textile exports to USD 25 billion from current USD 13.5 billion announced in the textile policy 2014-19 is nothing more than a dream," they said.
Although GSP Plus window has increased the flow of orders to textile sector, but textilers are unable to utilise their production capacity mainly due to shortage of electricity and gas, they said. Value added textile sector, which contributes around USD 10 billion to the total textile exports, is likely to remain stagnant in future as Punjab based textile industry is in grip of severe energy crisis and receiving only 25% of gas even during the extreme hot weather and the same was provided in winters, they noted.
They pointed out that industries in other provinces are enjoying 100% gas supply making Punjab textile sector uncompetitive within the country. The government should allow zero rating sales tax facility on export oriented textile chain in the coming budget 2015-16 as it will up lift the exports and strengthen the national economy, they said. They also stressed for immediate payment of custom refund claims of textile exporters to ease their financial stress.
The PTEA chairman was of the view that lack of fresh investment in technology and capacity expansion were enormously eating up the country's share in global textile trade. Referring the WTO's regional textile growth numbers for 2006-13, he said that country's share in the global textile trade of USD 718 billion has dropped from 2.2% to 1.8%, with exports from its regional rivals growing at a much rapid pace.
Bangladesh has pushed its exports by 160% to raise its share in the world market from 1.9% to 3.3%; China's exports are up 97% and its share went from 27% to 40%; and India's foreign sales rose by 94% to take its share from 3.4 to 4.7%, he detailed. Pakistan's overseas textile shipments during the period have surged by just 22% against the overall growth of 45% in the international textile trade because its reputation as a credible supply source has suffered enormously on account of the energy crunch and other issues, he added.
If the situation is not rectified and Punjab's closed processing capacity not revived, the possibility of losing thousands of jobs cannot be ruled out, he said. The PTEA leaders urged the government to take cognizance of this serious matter and immediately address the issues that are hindering the economic activities; provide necessary incentives to the major forex earning textile sector to retain the hard-won export markets at this time of tough competition in international markets.