Textiles An Overview

September p 2012
Textile Some Facts Importance of Textile in Pakistan World Textile Demand & Supply Dynamics Performance Competitiveness Outlook on the Sector

Snapshot p
1. Profile
Textile T il Some S f facts Importance of Textile in Pakistan

2. Risks
World Textile Demand and Supply Dynamics Performance Competitiveness

Textile Some Facts

Importance of Textile in Pakistan

World Textile Demand & Supply Dynamics

Performance

Competitiveness

Outlook on the Sector

Textile Some facts

Textile means to weave 4th largest producer of cotton1 3rd largest spinning capacity in Asia and 5% of the global spinning 2 capacity 3 Largest industrial sector Sufficient availability of raw material
Textile Some Facts Importance of Textile in Pakistan World Textile Demand & Supply Dynamics Performance Competitiveness Outlook on the Sector

Pakistan Agricultural Land use 4

Textile Some Facts

Importance of Textile in Pakistan

World Textile Demand & Supply Dynamics

Performance

Competitiveness

Outlook on the Sector

44%
Textile Some Facts Importance of Textile in Pakistan World Textile Demand & Supply Dynamics Outlook on the Sector

Performance

Competitiveness

15%

Textile Some Facts

Importance of Textile in Pakistan

World Textile Demand & Supply Dynamics

Performance

Competitiveness

Outlook on the Sector

Textile Some Facts

Importance of Textile in Pakistan

World Textile Demand & Supply Dynamics

Performance

Competitiveness

Outlook on the Sector

Textile Some Facts

Importance of Textile in Pakistan

World Textile Demand & Supply Dynamics

Performance

Competitiveness

Outlook on the Sector

Pakistan's Textile Sector

5

6
Installed Capacity (Looms)
9,000 9,000 8,000 8,000 8,000 7,000 , 7,000 7,000

Pakistan & Textile Industry Exports FY12 (P) FY11 FY10 FY09 FY08 Pakistan Exports (USD mln) 24.6 24.8 19.3 17.7 19.1 Textile Exports (USD mln) 12.3 13.8 10.2 9.6 10.6 %age of Textile Exports 50% 56% 53% 54% 55%
P: Provisional

Year 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Working Capacity (Looms)

5,000 4,000 4,000 4,000 4,000 4,000 , 5,000 5,000

PUNJAB Year

SINDH

KHYBER PAKHTUNKHWA Spindles 000

781 812 812 812 813 745 712

BALUCHISTAN

A KASHMIR A.KASHMIR

TOTAL PAKISTAN Spindles 000

10,483 10 436 10,436 10,514 10,514 10,515 10,626 10,965

I M P O R T A N C E

Units 2004-05 2005-06 2005 06 2006-07 2007-08 2008-09 2009-10 2010-11

307 309 309 309 309 316 316

Spindles 000
6,998 7,328 7 328 7,349 7,349 7,349 7,606 7,841

Units
118 119 119 119 119 118 116

Spindles 000
2,512 2,100 2 100 2,132 2,132 2,132 2,056 2,188

Units
17 17 17 17 17 17 17

Units
10 10 10 10 10 9 9

Spindles 000
99 103 127 127 127 125 130

Units
6 6 6 6 6 6 6

Spindles 000
93 93 94 94 94 94 94

Units
458 461 461 461 461 466 464

Textile Some Facts

Importance of Textile in Pakistan

World Textile Demand & Supply Dynamics

Performance

Competitiveness

Outlook on the Sector

Pakistans Textile Sector Composition

Pakistans textile industry consists of large scale organized sector and highly fragmented cottage/medium and small units Organized sector : Large number of spinning units (464) and d a small ll number b of f weaving i units i (60) 7 The rest of the downstream industry chain finishing, madeups, d garments, t towel t l and d hosiery h i having h i a great t export potential, is largely segmented in un-organized sector. sector

Textile Some Facts

Importance of Textile in Pakistan

World Textile Demand & Supply Dynamics

Performance

Competitiveness

Outlook on the Sector

Pakistans Textile Sector at KSE

180 listed textile companies constituting three segments: A) Spinning, B) Weaving, and C) Composite.
Textile Paidup Capital as at end-June
30 25 7.5% 6.3%

Textile Market Capitalization as at end-June

90 75 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 2006 2007 2008 2009 2010 2011 2012

PK KR in mln

PK KR in mln

20 15 10 5 0 2006 2007 2008 2009 2010 2011 2012

Weaving Spinning Composite %age of total KSE Capital

5.0% 3.8% 2.5% 1.3% 0.0%

60 45 30 15 0

Weaving Spinning Composite %age of total KSE Capitalization

Textile Some Facts

Importance of Textile in Pakistan

World Textile Demand & Supply Dynamics

Performance

Competitiveness

Outlook on the Sector

Top Listed Spinning Players

PKR in mln 31-Mar-12 SR. SR NO. PROFIT TOTAL TOTAL AFTER SALES SALES TAXATION 14,183 11 141 11,141 9,834 5,521 5,914 5 302 5,302 5,467 3,845 3,347 3 061 3,061 1,101 918 265 (413) (305) 137 (668) 14 100 (232) 18,934 18 254 18,254 15,638 9,678 9,288 9 082 9,082 7,709 7,361 5,607 5 446 5,446 106,998 237,196 237 196 237,196
Importance of Textile in Pakistan World Textile Demand & Supply Dynamics

30-Jun-11 SHARE IN SHARE IN PROFIT SPINNING SPINNING AFTER RATING SEGMENT SEGMENT TAXATION SALES PROFIT 8.0% 825 6.5% A- (PACRA) 7 7% 7.7% 2 131 2,131 16 9% A (JCR) 16.9% 6.6% 2,156 17.1% Not Rated 4.1% 250 2.0% Not Rated 3.9% 116 0.9% Not Rated 3 8% 3.8% 364 2 9% Not 2.9% N tR Rated td 3.2% 851 6.8% Not Rated 3.1% 608 4.8% Not Rated 2.4% 354 2.8% Not Rated 2 3% 2.3% (77) -0.6% 0 6% Not N tR Rated td 45.1% 7,656 60.7% 100.0% 11,363 100.0% 100 0% 100.0%
Performance

NAME OF COMPANY (SPINNING)

SHARE PRICE (PKR) 98.9 414 9 414.9 69.3 17.5 14.3 97 9.7 17.4 10.0 196.8 12 0 12.0

1 Fazal Cloth Mills Limited 2 Indus Id D Dyeing i &M Manufacturing f t i C Company Li Limited it d 3 Gadoon Textile Mills Limited 4 Gulistan Textile Mills Limited 5 Fatima Enterprises Limited 6 J. J K. K Spinning S i i Mills Mill Limited Li it d 7 Din Textile Mills Limited 8 Saif Textile Mills Limited 9 Fazal Textile Mills Limited 10 Shadman Sh d C Cotton tt Mill Mills Li Limited it d Total

Total Spinning - Net of losses Total Spinning

Textile Some Facts

12,604 12 604 100 0% 100.0% Source: KSE

Competitiveness

Outlook on the Sector

Top Listed Weaving Players

c C

SR. NAME OF COMPANY (WEAVING) NO. 1 Prosperity Weaving Mills Limited 2 Shahtaj Textile Limited 3 Yousaf Weaving Mills Limited 4 Zephyr Textiles Limited 5 Samin Te Textiles tiles Limited 6 Feroze1888 Mills Limited * 7 ICC Textiles Limited 8 Ashfaq Textile Mills Limited
*Formerly Nakshbandi Industries Limited

31-Mar-12 PROFIT TOTAL AFTER SALES TAXATION 4,024 7 3,017 69 1,790 (140) 2,347 37 1 820 1,820 (84) 2,246 167 1,380 (66) 729 54

TOTAL SALES 5,952 4,040 3,829 3,574 3 096 3,096 2,913 2,246 1,036 26,687 26,687

PKR in mln 8 30-Jun-11 SHARE IN PROFIT SHARE IN SHARE AFTER WEAVING RATING WEAVING PRICE TAXATION SEGMENT SEGMENT 22.3% 139 19.3% A- (PACRA) 10.4 15.1% 205 28.5% Not Rated 30.0 14.3% 61 8.4% Not Rated 1.7 13.4% 89 12.3% Not Rated 3.7 11 6% 11.6% 46 6 4% Not Rated 6.4% 65 6.5 10.9% 151 21.0% Not Rated 36.1 8.4% (99) -13.8% Not Rated 2.1 3.9% 30 4.1% Not Rated 10.5 100.0% 100.0%
Performance

Total Weaving

Total Weaving - Net of losses

Textile Some Facts Importance of Textile in Pakistan World Textile Demand & Supply Dynamics

720 100.0% 621 100.0% Source: KSE

Competitiveness

Outlook on the Sector

Top Listed Composite Players

PKR in mln 31-Mar-12 PROFIT TOTAL AFTER SALES TAXATIO 32,513 2,526 18,069 (279) 15 881 15,881 620 13,380 298 14,157 537 8,129 (4,417) 9 386 9,386 602 N.A N.A 8,995 (293) 8,262 7
8 30-Jun-11 COMPOSITE PROFIT COMPOSITE SHARE AFTER RATING SEGMENT SEGMENT PRICE TAXATION SALES PROFIT 14.9% 4,844 26.1% AA- (PACRA) 58.5 7.8% 1,196 6.4% Not Rated 26.7 7 0% 7.0% 1 607 1,607 8 7% Not Rated 8.7% 152 6 152.6 6.2% 1,459 7.8% A- (JCR) 20.6 5.7% 730 3.9% Not Rated 29.0 5.4% (4,702) N.A. D 6.1 4 7% 4.7% 1 925 1,925 10 4% Not Rated 10.4% 136 3 136.3 4.6% 1,123 6.0% Not Rated 101.8 4.5% (119) N.A. Not Rated 13.7 4.4% 584 3.1% D 27

SR. NO.

NAME OF COMPANY (COMPOSITE)

TOTAL SALES 48,565 25,435 22 937 22,937 20,322 18,525 17,603 15 453 15,453 15,098 14,759 14,344 213,041 326,065 326,065

1 Nishat Mills Limited 2 Gul Ahmed Textile Mills Limited 3 Sapphire Textile Mills Limited 4 Nishat (Chunian) Limited 5 Masood Textile Mills Limited 6 Azgard Nine Limited 7 Sapphire Fibres Limited 8 Mahmood Textile Mills Limited 9 The Crescent Textile Mills Limited 10 Quetta Textile Mills Limited Total

Total Composite - Net of losses Total Composite

Textile Some Facts Importance of Textile in Pakistan World Textile Demand & Supply Dynamics

65.3% 100.0% 100.0%

8,647 8,458 18,581

N.M N.M 100.0%

Outlook on the Sector

Performance

Competitiveness

World Cotton Demand and Supply

World Cotton Production

Excess supply of cotton tt estimated for 2013 China the largest producer and consumer
Importance of Textile in Pakistan

Millions of 480 lb. lb Bales China India United U ed S States es Pakistan Brazil Australia Uzbekistan Rest of World World Total

Aug 08 - July Aug 09 - July Aug 10 - July Aug 11 - July Aug 12 - July 09 10 11 12 13
September* 36.7 22.6 12.8 . 8.5 5.5 1.5 4.6 15.1 32.0 23.8 12.2 . 9.2 5.5 1.8 3.9 13.9 30.5 26.4 18.1 . 8.6 9.0 4.2 4.1 15.5 33.5 26.5 15.6 . 10.6 8.7 4.9 4.2 18.7 31.0 24.5 17.1 7. 9.7 6.1 4.3 4.1 17.3

107.3

102.2

116.4

122.7

114.0
* Estimated

World Cotton Consumption

Millions of 480 lb. Bales China India Pakistan Turkey Brazil United States Bangladesh Indonesia Rest of World World Total
World Textile Demand & Supply Dynamics

Aug 08 - July Aug 09 - July Aug 10 - July Aug 11 - July Aug 12 - July 09 10 11 12 13
S September* b * 44.0 17.8 11.1 5.1 4.2 3.5 3.8 2.3 18.4 50.0 19.8 10.4 5.8 4.4 3.6 3.9 2.2 18.6 46.0 21.1 10.0 5.6 4.3 3.9 3.7 2.1 18.1 40.0 20.5 10.1 5.3 4.0 3.3 3.2 1.9 17.1 38.0 21.5 11.3 5.6 4.3 3.4 3.6 2.1 17.9

110.2

118.6

114.7

105.4

107.6
* Estimated

Textile Some Facts

Performance

Competitiveness

Outlook on the Sector

Cotton Demand and Supply

World Cotton Imports

China leading i importer t establishing the cotton pricing behavior The USA largest exporter
Importance of Textile in Pakistan

Millions of 480 lb lb. Bales China Bangladesh Turkey P ki t Pakistan Indonesia Vietnam Thailand Mexico Rest of World World Total

Aug 08 - July Aug 09 - July Aug 10 - July Aug 11 - July Aug 12 - July 09 10 11 12 13
September* 7.0 3.8 2.9 19 1.9 2.3 1.3 1.6 1.3 8.4 10.9 3.9 4.4 16 1.6 2.2 1.7 1.8 1.4 8.5 12.0 3.7 3.4 17 1.7 2.1 1.6 1.8 1.2 8.5 24.5 3.2 2.4 10 1.0 2.0 1.6 1.3 1.0 8.0 12.0 3.6 3.0 24 2.4 2.2 1.8 1.7 1.2 8.8

30.4

36.3

35.9

44.9

36.5
* Estimated

World Cotton Exports

Millions of 480 lb. Bales United States Australia Brazil India Uzbekistan Greece Burkina Turkmenistan Rest of World World Total
World Textile Demand & Supply Dynamics

Aug 08 - July Aug 09 - July Aug 10 - July Aug 11 - July Aug 12 - July 09 10 11 12 13
S t b * September* 13.3 1.2 2.7 2.4 3.0 0.8 0.8 0.8 5.5 12.0 2.1 2.0 6.6 3.8 0.9 0.8 1.2 6.3 14.4 2.5 2.0 6.0 2.7 0.8 0.7 1.1 6.6 11.7 4.6 4.8 10.5 2.5 1.0 0.6 0.8 8.6 11.8 4.2 4.0 3.5 2.6 1.1 0.8 0.8 7.8

30.4

36.3

35.9

44.9

36.5
* Estimated

Textile Some Facts

Performance

Competitiveness

Outlook on the Sector

Cotton Demand and Supply

China carrying record dl level l ending stocks to be consumed gradually g y Huge world stocks
9

World Cotton Ending Stocks

Millions of 480 lb. Bales China India Brazil United States Austrailia Pakistan Turkey Rest of World World Total Aug 08 - July Aug 09 - July Aug 10 - July Aug 11 - July Aug 12 - July 09 10 11 12 13
September* 22.4 10.6 5.0 6.3 1.0 3.4 1.7 12.2 15.2 9.4 4.4 2.9 0.7 3.0 1.9 10.2 11.6 9.9 7.9 2.6 2.6 2.7 1.7 10.5 30.6 7.7 8.0 3.4 3.3 3.1 1.7 12.2 35.5 8.2 6.0 5.3 3.5 3.4 1.8 12.9

62.5

47.8

49.5

69.9

76.5
* Estimated

Point to note: Due to sufficient availability of cotton, cotton no material change in the current prices is expected
World Textile Demand & Supply Dynamics Performance Competitiveness Outlook on the Sector

Textile Some Facts

Importance of Textile in Pakistan

10

Higher cotton prices i in i China due to support price p

Country Wise Cotton Price Comparison

14,000 350

12,000

300

10,000

250

6,000

150

4,000

100

2 000 2,000

50

Textile Some Facts

Importance of Textile in Pakistan

Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12

Pakistan (PKR/Maund) China (Cts/Lb) Pakistan (Cts/Lb)

USA (Cts/Lb) India (Cts/Lb)

World Textile Demand & Supply Dynamics

Performance

Competitiveness

Outlook on the Sector

US Cents

8,000

200

PKR P

Textile and Clothing Supply

Increasing share of China Chi and d reducing share of the EU Stagnant performance of Pakistan
Sr. #

11

Top 10 Leading Exporters of Textile (%age share in World Textile Trade)

2006 World Textile (USD bln)
220.4 22.3 32.6 4.3 5.8 4.6 4.5 3.5 3.4 3.2 1.6 85.8

2007
240.4 23.5 33.9 4.0 5.2 4.4 4.1 3.7 3.1 3.0 1.6 86.5

2008
250.2 26.1 32.1 4.1 5.0 4.1 3.7 3.8 2.9 2.9 1.5 86.2

2009
209.9 28.3 29.5 4.3 4.7 4.3 3.7 3.7 3.1 2.9 1.5 86

2010
250.7 30.7 26.8 5.1 4.9 4.4 3.9 3.6 3.1 2.8 1.8 87.1

1 2 3 4 5 6 7 8 9 10

China * European Union India USA Korea Taipei Turkey Pakistan Japan Indonesia Total
*Including Hong Kong

Textile Some Facts

Importance of Textile in Pakistan

World Textile Demand & Supply Dynamics

Performance

Competitiveness

Outlook on the Sector

Textile and Clothing Supply

Chi the th China leader in the world textile and clothing exports B l d h Bangladesh strengthening its p presence in the world clothing trade P ki Pakistan not a prominent player p y
Textile Some Facts

11

Sr. #

Top 10 Leading Exporters of Clothing (%age share in World Clothing Trade)

2006 W ld Textile World T til (USD bl bln) )
309 1 309.1 30.6 26.8 2.8 3.8 3.3 1.7 1.8 1.6 2.0 14 1.4 75.8

2007
345 8 345.8 33.4 29.9 2.9 4.1 2.8 2.1 1.7 1.2 1.5 12 1.2 80.8

2008
361 9 361.9 33.2 31.1 3.0 3.8 3.0 2.5 1.7 1.2 1.4 12 1.2 82.1

2009
315 1 315.1 34.0 30.7 3.4 3.7 3.6 2.7 1.9 1.3 1.3 12 1.2 83.8

2010
351 5 351.5 36.9 28.1 4.5 3.6 3.2 3.1 1.9 1.3 1.2 12 1.2 85.0

1 2 3 4 5 6 7 8 9 10

China * European Union Bangladesh g Turkey India Veit Nam Indonesia USA Mexico Thailand Total
*Including Hong Kong

Importance of Textile in Pakistan

World Textile Demand & Supply Dynamics

Performance

Competitiveness

Outlook on the Sector

Textile and Clothing Demand

11

The EU and the USA major demand drivers Slow economic activity hurting the t til textile demand
Textile Some Facts

Sr. # Top 10 Leading Importers of Textile (%age share in World Textile Trade) 2006 2007 2008 2009 2010 1 European Union 30 7 30.7 33 7 33.7 31 9 31.9 29 7 29.7 27 5 27.5 2 USA 10.2 9.6 8.8 8.6 8.8 3 China* 7.1 6.7 6.2 6.7 6.7 4 Japan p 2.7 2.5 2.6 3.0 2.7 5 Turkey 2.0 2.4 2.1 2.1 2.5 6 Viet Nam 1.4 2.0 2.7 2.3 7 Mexico 2.6 2.3 2.0 1.9 1.9 8 B ld h Bangladesh 1.9 9 Korea 1.7 1.7 1.6 1.6 1.8 10 Indonesia 1.2 1.6 Total 58 4 58.4 60 9 60.9 56 4 56.4 56 3 56.3 57 7 57.7
*Including Hong Kong

Importance of Textile in Pakistan

World Textile Demand & Supply Dynamics

Performance

Competitiveness

Outlook on the Sector

Textile and Clothing Demand

Reducing share of the USA
11

Sr. # 1 2 3 4 5 6 7 8 9 10

Top 10 Leading Importers of Clothing (%age share in World Clothing Trade)

2006 European Union USA Japan Canada Russia Switzerland Austrailia Korea Turkey U.A.E Total
43.6 25.6 7.4 2.1 2.5 1.4 1.0 1.2 0.7 0.6 86.1

2007
45.5 23.7 6.7 2.1 4.1 1.4 1.0 1.2 1.4 87.1

2008
47.3 22.0 6.9 2.3 5.7 1.5 1.1 1.1 0.6 1.5 90.0

2009
48.5 21.8 7.7 2.3 2.2 1.6 1.2 1.0 0.7 0.8 87.8

2010
44.7 22.3 7.3 2.3 2.0 1.4 1.3 1.2 0.8 0.7 84.0

Textile Some Facts

Importance of Textile in Pakistan

World Textile Demand & Supply Dynamics

Performance

Competitiveness

Outlook on the Sector

12

Pakistan - Textile Sector Exports

FY12 Commodity Units Quantity 264,076 572,047 1,971,757 12,214 97,520 248,912 143,922 28,593 25,437 389 084 389,084 FY11 FY10 Value YoY Quant. YoY Rate Value Value Quantity Quantity (USD 000) Change Change (USD 000) (USD 000) 470,133 57.0% -21.8% 168,210 383,151 177,947 215,954 6.7% -23.6% 536,128 2,201,405 1,794,575 625,418 1,433,094 -15.7% 10.9% 2,337,804 2,623,195 1,787,659 1,800,055 2,454,701 -11.6% -1.4% 13,819 41,520 47,632 13,646 35,693 -22.2% 10.1% 125,351 2,305,554 1,974,228 108,669 1,764,959 -19.1% 3.5% 307,734 2,088,898 1,748,327 324,025 1,744,250 -17.2% 8.4% 173,786 684,183 762,308 192,490 668,239 86.6% 12.8% 15,323 98,826 46,954 20,741 61,527 -26.0% 24.5% 34,353 1,773,661 1,634,593 27,661 1,269,338 30 2% 27 8% 27.8% 557 349 557,349 -30.2% 542 116 542,116 607 806 607,806 435 185 435,185 445 807 445,807 N.A. N.A. 584,772 624,955 537,237 328,738 N.A. 322,592 245,216

Raw Cotton 000 Kgs Cotton Yarn 000 Kgs 34% Cotton Cloth 000 Sq Mtrs Yarn Other than Cotton Yarn 000 Kgs Knitwear 000 Doz Bed Wear 000 Kgs Towels 000 Kgs Tents,Canvas & Tarpulin 000 Kgs Readymade Garments 000 Doz Art Silk & Synthetic Textile 000 Sq Mtrs Art,Silk Madeup Articles Other Textile Materials

Total
Textile Some Facts Importance of Textile in Pakistan

12,356,712
World Textile Demand & Supply Dynamics

-10.4% 10.4%
Performance

13,788,111
Competitiveness

10,221,369
Outlook on the Sector

Textile - Credit Behavior

PKR in bln

13

Pakistan's Banking Sector Loans

Jun-10 Total Loans Total Loans Excluding g Textile Loans Textile Loans Share in Total Loans
3,567.6 2,963.9 , 603.7 17%

Sep-10
3,518.5 2,928.8 , 589.7 17%

Dec-10
3,714.3 3,009.2 , 705.2 19%

Mar-11
3,717.4 3,012.2 , 705.2 19%

Jun-11
3,776.7 3,109.0 , 667.7 18%

Sep-11
3,666.5 3,068.9 , 597.6 16%

Dec-11
3,746.2 3,065.9 , 680.3 18%

Mar-12
3,846.4 3,161.0 , 685.4 18%

CAGR
15% 15% 16% -

PKR in bln

Pakistan's Pakistan s Banking Sector Non-Performing Non Performing Loans

Jun-10 Total NPLs Total NPLs Excluding Textile NPLs T til NPLs Textile NPL Share in Total NPLs
459.8 319.5 140 4 140.4 31%

Sep-10
494.0 345.7 148 4 148.4 30%

Dec-10
547.8 376.3 171 5 171.5 31%

Mar-11
573.5 396.9 176 6 176.6 31%

Jun-11
579.2 396.2 183 0 183.0 32%

Sep-11
613.2 424.8 188 4 188.4 31%

Dec-11
607.1 413.0 194 2 194.2 32%

Mar-12
608.8 407.3 201 4 201.4 33%

CAGR
19% 16% 21% -

Pakistan's Banking Sector Infection Ratio

Jun-10 Total Infection Ratio Total Infection Ratio Excluding Textile Infection Ratio Textile Infection Ratio
Importance of Textile in Pakistan

Sep-10
14% 12% 25%

Dec-10
15% 13% 24%

Mar-11
15% 13% 25%

Jun-11
15% 13% 27%

Sep-11
17% 14% 32%

Dec-11
16% 13% 29%

Mar-12
16% 13% 29%

13% 11% 23%

World Textile Demand & Supply Dynamics

Textile Some Facts

Performance

Competitiveness

Outlook on the Sector

Competitiveness
FACTORS FRAMEWORK RISK MATRIX

New Entrants

High capital requirement to enter in the industry Large population of manufacturers in the spinning and weaving segment Cost and/or quality advantages are enjoyed j y by y the existing gp players y

Low

Substitute of products Bargaining P Power of f Buyers (Demand S Scenario) i )

Textile Some Facts

May have substitute Addition of quality and branding sense, , p probability y of customer switching gets lower China - supplier of choice Lower price image of Pakistan Increasing competitive pressure from Bangladesh, Vietnam and Turkey in few segments of the textile chain. chain
Importance of Textile in Pakistan World Textile Demand & Supply Dynamics Performance Competitiveness

Medium

High

Outlook on the Sector

Competitiveness
FACTORS FRAMEWORK

RISK MATRIX

Bargaining Power of Suppliers (Supply Scenario)

Numerous players with varied size and power. Over 1,200 1 200 ginning factories, factories 464 spinning units and 50 composite units Low threat of forward integration

Low

Strong commitment of the participants Degree of Rivalry among Price competition (or respond to such competition) to defend their market existing share and to cover fixed costs is high Competitors Inventory Risk Heavily He il dependent de e de t on cotton tt Government intervention
World Textile Demand & Supply Dynamics

High

Low L Medium

Textile Some Facts

Importance of Textile in Pakistan

Performance

Competitiveness

Outlook on the Sector

Risks
Fluctuation Fl t ti in i cotton tt pricing: i i lik l to likely t remain i largely l l at t the current level Demand Pattern: expected to be sluggish owing to prevailing slowdown in the major importing economies Energy crisis due to non availability of gas: would continue to pose a threat

Textile Some Facts

Importance of Textile in Pakistan

World Textile Demand & Supply Dynamics

Performance

Competitiveness

Outlook on the Sector

Business Risk: Spinning and weaving Segments: Low Value Added Segments: Medium

Whats the outlook | Stable

Textile Some Facts

Importance of Textile in Pakistan

World Textile Demand & Supply Dynamics

Performance

Competitiveness

Outlook on the Sector

Bibliography
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Pakistan Economic Survey 2010-11: Manufacturing and Mining | Section 3.2 Pakistan Textile Journal | February - 2010 | Pakistan: The third largest spinner country in Asia by Dr. Noor Ahmed Memon Contributes 46% of the total manufacturing: Pakistan Economic Survey | 2011-12|Manufacturing and Mining | Section 3.2 Pakistanpaedia : http://www.pakistanpaedia.com/maps/maps-of-pakistan.html State Bank of Pakistan : Economic Data | Export Receipts by Commodity | Archive Monthly All Pakistan Textile Mills Association: http://www.aptma.org.pk/Pak_Textile_Statistics/Gctipw.asp All Pakistan Textile Mills Association: Member Directory Karachi Stock Exchange: Downloads | Analysis Reports United States Department of Agriculture: http://www.fas.usda.gov/cotton/Current/ All Pakistan Textile Mills Association World Trade Organization : International Trade Statistics 2011, 2010, 2009, 2008, 2007 All Pakistan Textile Mills Association g System y | editions: Sep10, p , Sep11, p , Dec11 and Mar12 State Bank of Pakistan: Statistics of the Banking

Analysts

Aisha Khalid +92 42 3586 9504 aisha@pacra.com

Omaira Amjad +92 42 3586 9504 omaira.amjad@pacra.com

M. Shahnawaz A. Khanzada +92 42 3586 9504 Shahnawaz.aziz@pacra.com

DISCLAIMER SC
PACRA has used due care in preparation of this document. Our information has been obtained from sources we consider to be reliable but its accuracy or completeness is not guaranteed. The information in this document may be copied or otherwise reproduced, in whole or in part, provided id d the th source is i duly d l acknowledged. k l d d The Th presentation t ti should h ld not t be b relied li d upon as professional advice.