LAHORE – SALMAN ABDUHU  - It were the textile giants which fluctuate or regulate the prices of textile products at their own will in a bid to maintain their monopoly in the market besides earning huge profits; thus leaving small businesses, especially traders, at their mercy. They inflate and deflate the rates of textile products sans domestic market regime or any other international pressure. They also raise the prices of their products even after the decrease in cotton rate in the open market.

This was stated by Muhammad Saeed-ur-Rauf, Chief Executive of the S.M. Textiles, in an interview with TheNation on Saturday.

He was of the view that the key textile millers usually kept cotton stocks for one year. They also had their own set-ups from cotton ginning to garment stitching, he said. However, he fully backed the giant millers view that the hydra-headed monster of energy crisis had resulted in massive increase in their input cost, which was their genuine reason, but it were the end users of the textile products who were at the receiving end because the increase in the cost was ultimately passed on to them.

He alleged that these giant millers usually exported their surplus cotton bales as well yarn stocks instead of selling these in the open market in the country, which eventually resulted in hike in the price of cotton in the local market.

He was of the view that market mechanism should be fully followed so that it remained stable.

He said that the present energy well as gas crisis had hit every segment of the society, including the textile sector, very hard, besides resulting in 50pc decrease in the textile production, which was a very worrisome thing.

He made a passionate appeal to the present rulers to do something serious, instead of only paying lip service, in order to rid the country and the people of the problems being faced at present.

Saeed-ur-Rauf said that around 40 per cent of textile industrial units in Punjab run on gas and gas suspension means no production by almost half of the industry and a loss of millions of rupees to the exchequer.

Giving a break-up, he said that the industry was denied gas for 77 days in 2008-09, 100 days in 2009-10 while in 2010-11 it was given gas for only 170 days. “An unprecedented hike in power tariff had made the scenario more complex and complicated. To run the industry on alternative fuel, including diesel and furnace oil is not a viable proposition.”

He said textile industry, particularly in the province of Punjab, was showing alarming downward trends in exports as well as local production since last two quarters due to energy shortage. The whole industry was facing acute financial crunch, unable to repay loans to banks, he added.

According to him, the volume of non-performing loans (NPLs) of the textile industry surged to the tune of Rs188 billion in September 2011 against Rs171 billion in December 2010. He said textile exports are also down in value terms, dwindling 17 percent down in January 2012 against corresponding period, keeping monthly exports below one billion dollar, which was on an average over $1.2 billion during 2010-11. There is a consistent decline for the last four months and it is becoming impossible to achieve announced $16 billion export target for current fiscal against $14 billion last fiscal year and it is likely to stay below $12 billion.

He said the textile industry was not generating export surplus in the absence of gas and electricity. He said gas supplied remained disconnect for 172 days during last calendar year besides average loadshedding of six to eight hours a day on independent and grouped feeders.

He said the textile industry was heading fast to a collapse like situation. He said massive litigation would be a direct outcome of the situation, as the textile industry was not in a position to keep its capacities operational due to unprecedented energy crisis.

The SM Textiles CE said that the discriminatory attitude of the government was not only denting its goodwill and reputation but had also put a question mark on its ability to manage and govern things. It was a death knell for export-based industry and productivity, he added. How the industry would be able to manage export orders worth millions of dollars when there is no gas? What about the millions of daily wagers who have a single source of income?

The SM Textiles CE said that the businessmen were unable to understand that why the business community was not taken into confidence over industry-related issues and if the SNGPL was facing some supply related issues they must bring them to the notice of real stakeholders well ahead of time.