Pakistan as major Asian market for textile machinery

manufacturing nations

Import of Textile Machinery in Pakistan

by Dr. Noor Ahmed Memon.

928.6

The spinning sector had grown with yarn export and growth in
cotton production, followed by logical growth in weaving and processing sector due to value addition. The major concentration of
industry is in Karachi, Hyderabad, Multan, Lahore and Faisalabad.
Unlike spinning sector the weaving sector comprises of large
number of small power loom units, mainly clustering in Faisalabad,
Hafizabad, Kasur and Multan. Recent trend is to set up Air-Jet loom
either as independent units are integrating it with spinning or processing industries.
Though textile industry maintains its ranking of the single largest
manufacturing sector in Pakistan, unfortunately indigenous manufacturing of its machinery could not develop along with the growth
of textile industry. Therefore, demand for textile machinery still is
almost entirely met through global imports.
The usual and most effective channel for sale of machinery,
equipment and spares is through a reliable agent. Foreign firms
appoint local agents for the Pakistan to provide them with market
intelligence and to follow-up on sales. The most popular and possibly the most effective distributorship arrangement in Pakistan is the
exclusive agency agreement. The exclusive agent receives commission on all sales of the product within the country, regardless of the
channels through which they were ordered. The agent often
imports and stocks spare parts inventory, that are regularly required
by textile mills. The agency may also provide after-sales service.
Pakistan has been a major Asian market for major textile machinery
manufacturing nations. China Japan, Italy, Germany and
Switzerland have been among top exporter of textile machinery to
Pakistan.

Investment
Textile Industry has made an investment of about US$ 7.5 billion during the last eleven years. The total investment to be
divided in various sub sector, indicates that 50.2% in spinning
sector, followed by 17.8% in textile processing, 15.23% in weaving, while the investment and other sectors namely like knitwear,
made ups and synthetic textile at respective rate of 7.02%,
4.71% and 5.76%. This investment includes both investment
through bank loan as well as own sources. This investment has
been made in the form of Balancing Modernization Replacement
(BMR) expansion and new capacity.

Import of machinery
Textile machinery imports jumped to $297 million in the
financial year 2009-10 from $211 million in the previous financial,
registering a growth of 41%. Growth in the textile machinery is
an encouraging sign, which has remained in the grip of uncertain
and gloomy conditions for the last few years.

42 PTJ August 2011

771.0
598.0

US $ Million

531.9

456.1

503.0
438.3

406.9

294.7

10

-1
1

212.0

20

Pakistan textile industry is by far the most important sector of

the economy contributing 63% to export earnings and engaging
38% of labour force. At present Pakistan has the third largest spinning capacity in Asia after China and India. 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 28% in world yarn trade and
8% in cotton cloth. The value addition in the textile sector accounts
for over 9% of GDP and its weigh-age in the quantum index of
large-scale manufacturing is 20%.

Source: Federal Bureau of Statistics, Government of Pakistan.

Investment in textile industry (sector-wise)

(US$ 7.5 billion)
Knitwear and
garments

made up
4.71%

Textile
Processing
17.08%

7.02%

Synthetic
Textiles
5.76%

Spinning
50.20%

Weaving
15.23%

During the past four years textile machinery imports

decreased heavily when textile industrialists halted making investments in their units due to falling export of textile goods.
During the year 2009-10 sector wise textile machinery
imports in Pakistan shows that spinning sector share 34.37%,
weaving 23,90%, knitting 19.33% finishing 20.57% and remaining 1.83% share by others machines. Sector -wise textile
machinery imports in Pakistan is given in Table-1.

Table 1
Sector-wise imports of textile machinery in Pakistan
(Value in $ 000)
2008-09

2009-10

Sector
Value

% Share

Value

% Share

Spinning

88,406.45

42.17%

101,296.87

34.37%

Weaving

46,363.53

22.12%

70,442.17

23.90%

Knitting

32.835.72

15.66%

56,958.46

19.33%

Finishing

35,975.72

17.16%

60,615.62

20.57%

Others

8,850.44

2.89%

5,392.89

1.83%

Total

212,431.86

100.00%

294,706.01

100.00%

Source: Federal Bureau of Statistics, Government of Pakistan.

Spinning sector: At present, it is comprised of 521 textile

units (50 composite units and 471 spinning units) with 10.1
million spindles and 114 thousand rotors in operation with
capacity utilization of 89% and 60% respectively, during the
year 2010-11. The cotton spinning sector has performed
slightly better than other sub-sectors during the year 2010-11.
This can be attributed to market demand and response, easing
of raw materials through local supply and imports, diversification to blends and incentives granted by the Government
under the support packages.
Spinning is the first process in the cotton value chain that
adds value to cotton by converting it into a new product, i.e.
from ginned cotton into cotton yarn. The process of yarn manufacturing of continuous length from different types of fibers
(e.g: cotton, wool, polyester, viscose etc.) is known as textile
spinning.
The spinning is the most important and the initial step in
fabric manufacturing. The major and main goals of spinning is
to produce the quality yarn from raw material, then remove the
process faults afterwards, wind the short length bobbins on big
packages (Cones) according to the market/customer demand.
There are different types of spinning, the most commonly
forms of spinning commercially available are:

Ring spinning,

Rotor spinning,

Air Jet spinning,

Friction spinning etc.
Roving is an important process in the conversion of fibers
into yarn by the rising spinning system. However, it is no longer
an indispensable process because of the development of ring
spinning machines, which produce yarn straight from the finished draw frame silver. Nevertheless, most, if not all, of the
spinning mills in Pakistan, operating ring spinning frames, spin
yarn from roving produced on roving frames, rotors are
installed and nearly 10.85 million spindles and 118 rotors are in
operation.
Import of textile spinning machines and parts increased
from US $ 88 million in 2008-09 to US $ 101 million in 200910, thus showing increased of 15%. Import of textile spinning
machines and parts is given in Table-2

Table 2
Import of textile spinning machines and parts
(Value in $ 000)
Countries

2008-09

2009-10

Value

% Share

Value

% Share

China

20,047.13

22.68%

23,068.82

22.77%

Japan

16,605.68

18.78%

19,805.18

19.55%

Germany

16,699.92

18.89%

18,451.69

18.22%

Switzerland

16,077.02

18.19%

15,106.75

14.91%

Italy

5,730.16

6.48%

10,241.02

10.11%

U.S.A

2,287.95

2.59%

3,171.37

3.13%

India

2,063.64

2.33%

3,069.66

3.03%

Spain

1,399.89

1.58%

1,282,12

1.27%

Korea

1,066.93

1.21%

1,077.42

1.06%

822.73

0.93%

980.31

0.97%

UK
Total

88,406.45 100.00% 101,296.87

100.00%

Source: Federal Bureau of Statistics, Government of Pakistan.

PTJ August 2011 43

Table 4
Import of knitting machines and parts
(Values in $ 000)
2008-09
2009-10
Countries
Value % Share Value % Share

Table 3
Import of textile weaving machines and parts
(Value in $ 000)
Countries

2008-09

2009-10

Value

% Share

Value

% Share

Switzerland

6,950.72

14.99%

15,394.74

21.85%

Japan

10,355.04

22.33%

15,260.93

Belgium

8,385.61

18.09%

China

4,343.90

Germany

China

15,074.14 45.91% 34,935.39 61.33%

21.66%

Japan
Korea

8,242.68
2,840.13

25.10% 10,109.60 17.75%

8.65% 4,501.63 7.90%

14,527.39

20.62%

Switzerland

1,332.42

4.06%

1,757.02

3.08%

9.37%

8,294.10

11.77%

Germany

1,412.29

4.30%

1,565.53

2.75%

4,531.09

9.77%

6,801.15

9.65%

Italy

1,579.15

4.81%

1,076.08

1.89%

Italy
India
USA

3,007.18
2,608.18
930.25

6.49%
5.63%
2.01%

3,863.17
891.70
746.69

5.48%
1.27%
1.06%

USA

1,228.95

3.74%

710.55

1.25%

248.95

0.76%

665.11

1.17%

Korea

655.47

1.41%

691.42

0.98%

France

0.00

0.00%

464.82

0.82%

UAE

238.05

0.51%

566.99

0.80%

UK

431.44

1.31%

288.50

0.52%

Total

46,363.53

100.00%

70,442.17

100.00%

Other Asian Countries

Total

32,835.72 100.00% 56,958.46 100.00%

Source: Federal Bureau of Statistics, Government of Pakistan.

Source: Federal Bureau of Statistics, Government of Pakistan.

Weaving sector: The pattern of cloth production is different

than spinning sector and there are three different sub-sectors in
weaving industry: Integrated, Independent Weaving Units and
Power Loom Units. Investment in the shuttle-less looms both in
integrated and independent weaving sector has increased gradually and this trend is likely to intensify further.

stretchable, snug fitted garments, particularly in greatly expanding areas of sports wear and other casual wear-segments.

The power loom sector have modernized and registered a

phenomenal growth over the last two decades. This growth in
power loom sector is due to favorable government policies as well
as market forces. This sector is producing comparatively low value
added grey cloth mostly of inferior quality. Te main issues and
problems of the power loom sector revolve mainly around the
poor technology, scarcity of quality yarn and lack of institutional
financing for its development from unorganized sector to an
organized one.
The progress of the power loom sector is due to favorable
government policies as well as market forces. This sector is producing comparatively low value added grey cloth in unorganized
sector. The growth record of Pakistan's textile industry shows a
reverse trend, especially in the weaving capacity of the mill sector,
in which the installed capacity of looms shrunk from 26,000 in
1978-79 to only 8,000 in 2009-2010, the working looms were
reported to be only 4,000. Thus, the organized sector seemingly
made an all-out shift towards cotton spinning and almost completely gave up efforts to develop and modernize the weaving
sector.
During the past five years, new installations of shuttle-less
machines has resulted in high growth in fabric production and
exports. At present, the shuttle-less weaving industry is largest
consumer of cotton yarn in Pakistan. The quality improvement in
fabric production is directly related to the up gradation of technology in weaving and spinning sectors.
Import of textile weaving machines and parts increased from
US $46.36 million in 2008-09 to US $ 70.44 million in 2009-10,
thus showing an increase of 52%. Import of textile weaving
machines and parts into Pakistan is given in Table-3.
Knitting sector: Knitting is second most frequently used
method of fabric construction. The popularity of knitted fabrics
has grown in the recent years, because of the increased versatility
of techniques, the adaptability of many new man-made fibers
and the growth in the consumer demand for wrinkle resistant,

44 PTJ August 2011

At present there are about 12,000 knitting machines in

Pakistan. The capacity utilization is approx.. 70%, out of this production, 60% comprises of jersey, knitted fabrics, T-shirts, sweat
shirts, polo shirts, jogging suits, and track suits and children outer
wear.
The knitwear industry has evolved considerably during the
past few decades and now different technologies are available for
producing good quality products to compete internationally.
Technological advancements have brought automation and
Computer Aided designing and also manufacturing. The use of
modern consoles such as display panels on the machine, digital
control systems, centralized lubrication systems, thread break stop
motions are few of the common features available nowadays.
This helps in better interaction between the man and machine
along with the efficiency and quality improvement.
The machinery used in the knitting sector, especially for circular and flat is largely imported from China, Japan, Korea,
Switzerland, Germany and Italy. Due to low-investment involvement this industry is very easy to install, as some of the machines
and parts are also manufactured locally. It is also true that this
industry is highly labour-intensive. This industry also does not
create any pollution problem or health hazards. In fact it is one of
the neatest and cleanest industry by every environmental and
health standards.
Pakistan imported mainly automatic flat and circular knitting
machines of different brands. Import of various types of knitting
machines in Pakistan increased from US $32.83 million in 200809 to US $56.96 million in 2009-2010, thus showing an increase
of 73%. Import of knitting machines and parts in Pakistan is given
in Table 4.
Finishing sector: Most of printing and processing units working on Hi-Tec machines are owned by big industrial and commercial cartels. There are more than 700 independent processing
units working in and around Faisalabad, Gujranwala and Karachi,
of which 70 integrated units have complete finishing facilities, i.e.
bleaching, mercerizing, dyeing, calendaring and printing as well
as heat setting and embossing and dry finishing of fabrics.

Table 5
Import of textile finishing machines and parts
Value in $ 000
2008-09
2009-10
Countries
Value % Share Value % Share
Italy

7,805.03

21.70% 14,811.16 24.43%

Germany

6,327.58

17.59% 13,835.58 22.83%

China

7,500.17

20.85% 12,052.31 19.88%

USA

3,210.35

8.92%

4,987.26

8.23%

Switzerland

2,305.42

6.41%

3,033.82

5.01%

Japan

750.65

2.09%

2,914.91

4.81%

Turkey

1,756.07

4.88%

2,165.64

3.57%

Spain

1,436.16

3.99%

1,294.56

2.14%

Other Asian countries 1,287.51

3.58%

1,100.06

1.81%

Korea

1.03%

1,004.90

1.66%

Total

371.38

35,975.72 100.00% 60,615.62 100.00%

Source: Federal Bureau of Statistics, Government of Pakistan.

These textile printing and processing units have been classified into three categories i.e. A, B and C. The category-A integrated units have complete finishing facilities i.e. bleaching
mercerizing, dyeing, calendaring and printing. These units from
the power loom sector, procure cloth and after processing they
marked it under own brand names. At times, these units also
provide finishing facilities to the traders on charge basis.
Category-B units directly compete with the products of
integrated units. In terms of quality, design and colour, their
products are in no-way inferior to the products of integrated
mills. Like the integrated mills these units also sell their products
in wholesale market.
Category-C units are those, which do not have complete
finishing facilities. These are either engaged in bleaching and
dyeing. In comparison with Type-A, these units perform more
work on contract or job order basis. Besides, they also procure
cloth from the market and after processing the same can
market it under their own brand names.
Import of textile finishing machines and parts increased
from US $ 35.97 million in 2008-09 to US $ 60.61 million in
2009-10, thus showing an increase of 68%. Import of textile
finishing machinery and parts into Pakistan is given in Table 5.

Future trends
The economic recovery after global recession has already
started and some prominent Asian countries such as China,
India, Malaysia, Indonesia, Pakistan and Bangladesh are heading towards recovery, while Western countries like USA and
prominent European countries which were hard hit by the
global economic recession are still struggling to come out of the
recession.
Pakistan has achieved its highest ever exports mark of
$19.3 billion in the financial year 2009-10. The country has so
far recorded exports worth $19.3 billion which not only
exceeds the target set for exports in 2009-10 i.e. $18.8 billion.
Pakistans textile exports fetched a lions share of 51.8% in
value terms out of the total exports for the financial year 20092010 Exports of textile and clothing, which crossed the $10 billion mark, recorded a growth of 7% as compared to the last
year.

PTJ August 2011 45

Increase in the value of exports was a result of increase in

the prices only. However, only raw cotton and yarn export witnessed major shift destination, which is a positive sign for the
country, which relied mainly on the traditional markets over the
years. The textile exports recorded a substantial increase to
existing market, but also sent to markets like Turkey, Portugal
and Singapore, which broadened the customer base.
According to one Chinese survey, world textile market is of
US $540 billions of which China has 27.18% and India only
3.68%. Other small countries like Bangladesh, Pakistan and
Thailand have shares even bigger than India.
Despite all odds China and India have enough potential to
fight the effects of global recession and their economies would
absorb the shocks at comparatively low cost. Bangladesh,
Thailand, Vietnam, Sri Lanka are in the second line in textile
exports. Presently, China, India, Pakistan and Bangladesh share
about 50% of US imports of cloth and textiles. China has lion
share of over 35%, while India and Pakistan share is small as
compared to China. India and Pakistan have great potential as
both produce large cotton crops and can exploit their resources
to increase their share in textile exports to US.
Pakistan would have to enlarge its product base. Currently,
the global trade is dominated by blended textile products, in
which the ratio of manmade fiber to cotton is 80:20. Pakistan's
textile products on average use 80% cotton and 20% manmade fiber. Besides that, local entrepreneurs have confined
themselves to exploring markets in few countries like the US,
European Union, Canada and Turkey. In order to achieve the
textile exports target of $25 billion by 2014, there is need for
further diversification both in terms of exploring new markets
and adding further value added products.
Pakistan governments decision to withdraw duties on
imported textile machineries under National Textile Strategy
2009-2014, has proved to be a big boost for its textile industry.
After this decision, the country has registered a growth rate of
25% in textile exports. It also helped to attract higher foreign
investments in the country.

46 PTJ August 2011

Pakistan invests $ 35 Million in 40 new

ginning factories
With a large new crop of high-priced cotton on its way,
investors in Pakistan are increasing their ginning capacity by
investing nearly $35 million into the opening of 40 new plants
and expanding the capacity of existing ones.
According to Naseem Usman, a cotton consultant and
Chairman of the Cotton Brokers Forum, thirty of the new ginning
factories have been established in Sindh and the others in Punjab
(15 in the Sanghar district, seven in Mirpurkhas, and a total of 8
factories in Hyderabad and Kotri). The four ginning factories are
ready for operation in Chicha Watani and 4 more in Burewala,
with one each in Layyah, Arifwala and Mianwali.
A ginning factory removes the seeds from the cotton and is the
first step in the value-addition chain subsequent to the harvesting of
the cotton crop. Thus the objective of the $35 million investment is
to support efforts towards higher value-addition of raw cotton
domestically then it stands to reason that if the cotton output has
risen then so would the need for more ginning factories.
The factories will help in handling Pakistans bumper crop of
cotton, which is estimated to be more than 15 million bales this
year. Currently, there are nearly 1,000 ginning factories in the
country: 250 in Sindh and more than 720 in Punjab, with the
others in Balochistan with installed capacity of more than 1.0 million bales on a single shift basis and a total capacity of around 20
million bales on a three-shift basis.
Naseem Usman further said that a top commodity company
on the globe Louis Dreyfus of Switzerland has set up an office in
Pakistan with the name of Louis Dreyfus Commodities Pakistan
Pvt Ltd to deal in cotton.
Other international trading companies including Cargil
International of Switzerland and Noble Group of Singapore are
also operating through their agents in Pakistan. One ginning factory with five to six gin saws can be set up at a cost of Rs 60 to 70
million.