TEXTILE INDUSTRY

Introduction

Textile Industry is the premier industry of Pakistan. The Pakistan textile industry’s total
export is around 9.6 billion US dollars. The textile industry contributes approximately 46
percent to the total output or 8.5 percent of the country GDP. In Asia, Pakistan is the 8th
largest exporter of textile products providing employment to 38 percent of the work force
in the country.

Pakistan is the fourth largest of the world's 70 cotton growing countries and produces
around 2million tons of raw cotton a year. The main characteristic of Pakistani cotton
varieties is its fiber strength, which is among the best in the world.

Cotton remains a primary raw material for the textile industry in Pakistan, accounting for
more than 70% of the total production cost. Massive investments in the country's textile
industry during the past decade have increased annual cotton requirements to 2.7m tons.
For the past several years, Pakistan has been importing more than 600,000 tons of cotton
a year from a number of countries to meet the growing industrial demand for raw cotton.

Sectors of Textile Industry

The textile industry can be subdivided into four sectors:

1. Spinning
2. Weaving
3. Printing/dyeing
4. Stitching

Importance and structure

Textile industry is the backbone of Pakistan's economy, moreover, the contribution of the
textile industry to the national economy is even more vital in view of its substantial
backward linkages to the agriculture sector.

Garment manufacturing is a major growing sub-sector of the textile value chain. It

consumes the majority of the workforce in Pakistan's textile and garments industry and
has been contributing towards the high growth-rate in exports.

Keeping in view the emerging trend in the global market, there is a huge potential for
Pakistan's garment sector. This need had never before been felt as intensely as now, in the
major garments clusters located in Lahore, Karachi, Sialkot, Faisalabad and Multan. In
unison they expressed that the existing infrastructure of textile & garments institutes in
the country is not able to fulfill the requirement for skilled human resources to meet the
immediate demand.
Readymade Garment industry

The current senario:

At present Pakistan is fast losing its share in the global garment market because of high
cost of production. Garments exports from Pakistan’s traditional competitors in the
region - Bangladesh, Sri Lanka, China and India - have picked up dramatically because
the exporters of those countries are getting hidden subsidies from their respective
governments. Export of readymade garments from Pakistan decreased form 42 million
dozens worth US $ 1.59 billion in 2007-08 to only 30 million dozens worth US $ 1.23
billion in 2008-09, thus showing decline of 23% in term of value.

The apparel segment is the highest value added link in the entire textile value chain. The
global trade in the sector accounts for 53% of the total value of global textiles trade and is
consistently growing since the last two decades.

Pakistan has been a major Asian player in the garment export market especially during
1990s and early 2000. Total apparel exports from Pakistan were to the tune of US$ 1.38
billion in 2006-07. The importance of the apparel sector in the
overall economic perspective is two fold. On the one hand the
sector has the potential to be the engine of Pakistan textile export
growth, while on the other the sector is the largest source of
creating low cost employment in the country at all levels.

USA and the European Union remain to be the largest markets

for garments and other apparel products with a combined share
of 73% in total global clothing trade.

Exports of Readymade Garments from Pakistan

Quantity (Million
Year Doz) Value (US $ Million)
2003-04 28 993
2004-05 34 1,088
2005-06 37 1,310
2006-07 41 1,385
2007-08 42 1,592
2008-09 30 1,230
Source: Trade Development Authority of Pakistan.

At present the major thrust of garments exports from Pakistan is on the USA market. The
European Union is the second largest market for garment manufacturers from Pakistan.
Major markets that Pakistani manufactures have so for not been able to explore are the
Japanese market, the United Arab Emirates and some new markets in the European
Union. These markets demand high product standards and in return offer higher per unit
price.
 Table 3: Country wise export of Readymade Garments
(Value in 000 $)
Country 2008-09 2007-08 2006-07
Germany 174,501 207,649 181,053
Spain 68,120 95,550 83,146
France 67,994 78,088 71,282
The Netherlands 41,786 58,344 56,983
U.A.E 38,684 47,746 44,238
Turkey 25,513 22,771 13,675
Sweden 20,017 15,786 15,488
Australia 9,551 8,792 8,607
Greece 7,715 6,688 7,873
Norway 9,097 5,990 3,387
Benin 3,782 4,706 3,348
Denmark 13,730 4,036 3,875
Brazil 3,081 2,688 1,246
Hong Kong 554 1,692 1,238
Poland 1,817 1,510 969
Japan 1,508 1,344 636
U.S.A 403,580 531,794 651,114
UK 136,027 156,570 174,806
Italy 53,353 68,826 73,953
Belgium 66,875 54,473 60,567
Canada 16,165 17,110 19,760
Saudi Arabia 22,939 14,906 17,109
Ireland 6,998 8,210 9,085
Finland 3,107 3,681 4,761
South Africa 1,649 2,469 4,096
Portugal 1,166 1,457 2,164
Singapore 967 921 1,516
Other countries 29,743 168,583 31,370
Total 1,230,019 1,592,380 1,547,345
Source: Source: Trade Development Authority of Pakistan.

On the other hand Bangladesh gets duty-free access to the neighboring countries in the
US, reporting textile exports worth $US15 - $20 billion over the next two years. At
present Bangladesh has earned $US 12.35 billion in the fiscal year to June 2009 by
exporting ready-made garments. Garments accounted for three-quarters of the country's
total export income. Garment exports, including readymade garments, primary textiles
and knitwear, account for more than 80% of national export income, and in the 12
months to June, 2009 rose from $10.7 billion in the previous financial year. Despite a
decline in garment exports in the second quarter of current fiscal year, exporters are still
trying to attract orders from traditional buyers in Europe, the United States and Japan.
BGMEA represents 5,000 garment factories that employ about three million people,
mostly women. Bangladesh is in the process to get duty-free export of garments to
Russia, Malaysia, India, Pakistan and the member countries of the Association of South-
East Asian Nations.

Product Line:

Pakistan produces apparel of various patterns and styles, of the latest fashions and
quality. The industry is adequately equipped to produce latest fashions to suit tastes and
needs in any part of the world.

Local designers have a keen eye on the international market in producing garments with a
variety of influences, classic, modern, eastern, western or a combination of
eastern/western traditions. Cotton knits and hosiery are available in fine quality, excellent
fit and style for maximum comfort. Standard international sizes and specifications are
generally in use in garment manufactures but the industry shows a remarkable degree of
adaptability in meeting the specific requirements of foreign buyers

Leading Pakistani designers, garment manufacturers and exporters regularly display their
designs and products round the world at international fairs and exhibitions and in trade
centres like Paris-London, New York, Tokyo and Berlin.

Difference in woven and knit garments

The difference in woven and knit garments lies in the construction of the fabrics. The knit
garment is tougher and better able to withstand wear, but the woven garment has the
ability to be more versatile in its construction.

The woven garment is the most common in clothing construction. Because of the ability
to cut the material and shape it by means of sewing, it is far more popular in the garment
industry. Material made by weaving is thinner as a rule and is not prone to raveling in
handling. This allows the garment maker to cut shapes that are not ordinarily available to
the knitted garment. Garments made by this method can be embellished by any number
of add on items such as buttons, woven in patterns, or different types of lace and
contrasting materials sewn to the fabric.

The knitted garment is softer and suppler because its thread is treated differently. Knitted
is produced by using needles to pull threads up through the preceding threads to produce
fabric. Items such as sweaters and stockings are made by the knitting method and will
readily "give" in response to pressure of the body. The disadvantage to the knit garment
is that it is easily damaged by pulling of one thread in the garment which will distort or
even destroy the garment. Examples of this problem are seen by the "run" in stockings
and "pulls" in a sweater.
  Knitwear garments
Pakistan's knitwear sector, which comprises 18,000 knitting machine, is the
leading growth sector in the entire textile chain with a growth potential estimated
at around 12% a year over the next five years, which would allow it to fetch more
than US$5bn in foreign exchange by 2014.

 Woven ready-made garments

There are as many as 450,000 industrial sewing machines installed in this sector.
Most of these manufacturers are small household units having 50-300 machines
each.

Important Highlights:
 Pakistan's garment Industry provides the highest value addition. However, a lack
of trained personnel has become a serious bottleneck to the growth of this sector.
 The industry enjoys the facilities of duty drawback up to 3% of the free on board
(FOB) value.
 Total number of textile and apparel workers: 2.5m.
 Total number of garment factories: 4,000 woven garment units, 700 knitted
garment units.
 Location of factories: Karachi, Faisalabad, Lahore, Sheikhupura, Kasur, Sialkot,
Multan districts.
 Source of workers: Mostly young school dropouts. Labor productivity is far too
low, lack of training.
 Main woven apparel products: Jeans, jeans jackets, cargo and carpenter pants,
shorts, shirts, pajamas, dress pants, Capri pants, blouses (men, woman and
children).
 Main knit apparel products: Polo shirts, fleece jackets, sweatshirts, T-shirts,
jogging suits, others.
 Contribution of textile and apparel exports to Pakistan's total exports: Pakistan
exported US$10.244bn worth of textile and apparel worldwide in the 12-month
period from July 2009 to June 2010. This accounted for 53% of the country's total
exports of US$19.382bn during the year.
Big Players

Garment manufacturing factories located anywhere in Pakistan which are the major
exporters.

1.Masood Textile Mills Limited, Faisalabad

2. Chenab Limited, Faisalabad
3. Kay & Emms (Pvt) Ltd, Faisalabad
4. Renfro Crescent (Pvt) Limited, Karachi
5. Azgard Nine Limited, Lahore
6. US Apparel & Textiles (Pvt) Limited, Lahore
7.Crescent Bahuman Limited, Pindi Bhattian
8. Style Textile (Pvt) Ltd, Lahore
9. Ali Murtaza Associates (Pvt) Ltd, Lahore
10. Interloop Private Limited, Faisalabad
11. Suntex Gloves Industries, Faisalabad
12. Paramount Spinning Mills Ltd, Lahore
Improvement Model for Ready-made Garment Industry of Pakistan
Ready made garment industry in Pakistan has to struggle a lot to stand in line with other
Asian garment manufacturing markets. For this purpose the following model is
introduced which can help in industrial and national development.
To compete with the foreign market garment industry in Pakistan has to strengthen its
competencies; at the same time it has to seek changes as opportunities and not a threat.
To compete in the local market garment industries should concentrate on the quality of
the products because quality is the first thing on the mind of consumers.

Major problems:

Price competitiveness: China and India have been successful in recent years in cutting
price ranges for their RMG products to greater extent: the reason is that they can afford
buying raw material at cheap rates.

Lead time: Another improvement is desired in reducing the lead time required to
produce and fulfill the orders placed by foreign companies. One way to decrease the lead
time required for producing RMG is to increase domestic linkage expansion and it can
also be reduced by improving the technology used by the industry. Using modern fast and
effective machinery can reduce time taken to deliver the order.
Linkage expansion: At this moment we have a fine textile industry at our disposal, an
industry which is making finest cloth in the world and is a major exporter of cotton
fabrics and yarn. There should have to be a backward linkage expansion i-e; garment
industries should work in collaboration with textile industries so that they can have good
quality fabric and they do not need to waste time in importing fabrics especially for the
orders that have been placed by the foreign buyers. In this way lead time will be reduced
and quality of the product will be enhanced. Some of the large textile industries have
started doing there own garment business which is a sign of healthy change.

Compliance issues: It is true that in Pakistan labor is available at minimum wages and
men power is never a limitation or hindrance; but industry have to follow the
international code of conduct in recruiting and accommodating employees. Recruiting
employees after 18 years of age, maintaining healthy and relaxed environment for the
employees, taking practical measures for health and safety, and giving equal
opportunities is more important than improving the quality if the product. Today even
foreign buyers want to know about the social compliance issues of the company, they are
dealing with.

Product and market composition: Upgrading product quality, upgrading product range,
targeting diversified markets, targeting markets with greater demand, gaining access to
new markets is very important in order to keep pace of the competitive market.
Reducing Production and distribution time: Foreign buyers are interested in knowing how
much time the company will take to deliver their order. Due to power failure every on
and off, Pakistani garment industry is not able to fulfill the orders in short time on the
other hand many other Asian countries are producing the same orders in limited time.
Steps to be taken:

o Basic machinery that is required for performing regular tasks of cutting, stitching,
trimming and finishing should be modernized.
o Trends report, buyers manual and trade shows organization in Pakistan and
abroad should be done by the garment associated companies.
o Strict quality control should be observed and government or private sector should
setup advisory services for the small scale garment industries.