FAISALABAD, June 7: Textile exporters will lose much of foreign markets if the government fails to announce a sound relief package for them.
This fear was expressed by industrialists at an emergent meeting of the Pakistan Textile Exporters Association, Garments City Faisalabad and the Faisalabad Dry Port Trust here on Wednesday.
Office-holders of industrialists?organisations observed that some vested interests were trying to give the country an import-oriented status.
Fearing closure of industries in the wake of brewing crisis, they demanded a level playing field with a substantial decrease in the cost of production.
PTEA chief Rana Arif Tauseef, although welcomed incentives offered to agriculture and other sectors, feared that required financial resources won’t be available to dish out these incentives and implement the record public sector development programme of Rs320 billion without textile sector’s contribution to the national economy.
Underlining the textile sector importance, he said its share in the national economy was 65 per cent while it was also providing maximum jobs to the unemployed youth.
He said Pakistani exporters were fully prepared to compete exporters of other countries, but they could not face powerful governments that were extending maximum incentives to their exporters.
Exporters, he said, had been persistently identifying these complications and disparities in the production cost with a request to bail out the textile sector.
He cautioned that the negative impact of this situation would start revealing in next few months making it difficult for exporters to tackle it alone.
FDPT chairman Muhammad Sadiq Chaudhry said that textile exporters had invested heavily to refurbish and expand industrial units to improve their quality and quantity to compete in global markets.
Despite best efforts of textile exporters, he said only 18 per cent growth was achieved as against the expected increase of 32 per cent.
Pakistan, he said, was now producing high quality textile products, but our regional competitors, including China, India and Bangladesh, were flooding international markets with their cheap products with the help of their governments.
Our competitors had an edge of cheap electricity, gas and loans in addition to subsidies, which were being extended to them in shape of technical measures.
While exporters claimed that the production cost was manifold in Pakistan as compared to other countries because of continuous increase in rates of gas, electricity and bank loans.
They demanded removal of the Export Development Fund (EDF) levy and deferment of loan repayments for two to three years to ensure sustained economic growth and achieving export targets.
Faisalabad’s Garments City chairman Sheikh Mukhtar Ahmed urged President Pervez Musharraf and Prime Minister Shaukat Aziz to take immediate measures to redress grievances of textile exporters.
He said the repayment of loan instalments had also become a formidable challenge to textile exporters as loan rates had gone much high, putting additional burden on them.

DHAKA: Knit sub-sector has become the front runner in Bangladesh textile sector. The knit units attracted most of investments made in the apparel sector. The number of such factories rose significantly over the last one year.
Officials of the Bangladesh Knitwear Manufacturers and Exporters Association said here on April 10 that 42 new knit factories were established across the country during the three months of this year.
During the last calendar year at least 144 new knit factories were set up in the country. Now, the total number of the knit factories in the country is 996 while it was 667 in 2004.
New investors are coming into this area due to lower production costs, government incentives schemes and other facilities.
Moreover, the demand for knit items also registered a growth in the international markets due to superior quality of the items.
Most of the newly established factories have been set up in Savar and Gazipur due to easy communication, transport facilities and space.
The space in Narayanganj, the original home to this item, has been squeezing over the years. As a result, investors are looking for new places for establishing their production units. More than 84 new garment units have been established since the beginning of the quota-free regime during the last year.
During this period, the entrepreneurs invested more than Tk 14 billion in this sector, with an expectation of creating employment opportunities for 41,154 officers and workers.
The total number of BGMEA members stood at more than 4,107 until July 2005 whereas the same was 3,957 in the corresponding period of the previous fiscal, the BGMEA database cell said.
The newly set up garment units would be able to produce more than 13.65 million dozens of garment items annually. 66 units were established in Dhaka, 14 in Chittagong and four others in Narayanganj.
Altogether, the entrepreneurs set up 13 knit units, 24 sweater factories, eight jacket factories, one dyeing factory, one cloth and dyeing factory, and seven woven and knit units.
Meanwhile, more than new 24 textile mills have gone into operation within the last six months having a total production capacity of more than 96.35 million kg of yarn annually.
The textile entrepreneurs have invested Tk 11.764 billion in the new textile mills. At present the money invested in this sector is around Tk 15 billion with 5.0 million spindles.
The newly set up mills have started operation with 431,320 spindles and 12,712 rotors.

Tk 450cr textile machinery imports in July

Textile machinery worth Tk 450 crores was released from customs in the month of July after a reduction in duties on the import of capital machinery and spare parts and the introduction of 1 percent procedural fee.

The government, in its current budget for the fiscal year (FY) 2008-09, reduced the duty on import of capital machinery from 5 percent to 3 percent and introduced a 1 percent procedural fee on import of such machinery instead of the previous indemnity bond system.

According Bangladesh Textile Mills Association's (BTMA) estimate, a total of 175 units of machinery, mainly for spinning mills, were imported in July.

After the introduction of 1 percent procedural fee for releasing capital machinery from customs, an importer of such machinery has to collect a certificate from the BTMA.

Of the total machinery imported, 90 percent was imported for spinning mills, the BTMA data revealed.

Simplifying procedures and reduction in duty on import of capital machinery helped increase the import of machinery, said Managing Director of Noman Group Nurul Islam.

Islam, who is a major importer of textile machinery, said he is setting up 10 new industrial units as the demand for local textile products is increasing worldwide.

At present, he has 12 textile production units from which he exports $180 million annually. "If I can start production of the newly set up factories within this year, the total export of Noman Group will cross $280 million by the next year," said an optimistic Nurul Islam.

Noman Group is setting up dyeing, weaving, spinning, finishing and a fashion house, Nurul Islam said.

Similarly, almost all textile entrepreneurs are importing machinery to initiate expansion as the demand for Bangladeshi made textile products has increased sharply, especially after the appreciation of Chinese currency against the US dollar.

The rising import of textile machinery proves the strength of the country's backward linkage industries. At present, the knitwear sub-sector can obtain 80 percent raw materials from the local market and the woven sub-sector gets 40 percent raw materials, industry people said.

According to data from the Bangladesh Bank, letters of credit (LCs) worth $ 1.39 billion were settled for importing capital machinery in FY 2007-08 against $1.92 billion in FY 2006-07.

Of the total imported capital machinery, 70 percent are textile and ready-made garment (RMG) machinery, industry insiders said.

When asked to comment on the issue, BTMA President Abdul Hai Sarker said the import of textile machinery would go up
significantly if the government can ensure a smooth supply of gas and power to the factories.

majority of the machinery were imported for newly set up factories," he said..