Value-added sector upset with domestic yarn quality

The value-added textile industry of Pakistan is facing problems as the spinners have raised the moisture level in cotton yarn, and are supplying yarn spinned from poor quality cotton, Jawed Bilwani, Chief Coordinator of the Value Added Textile Forum said.

He said this was the main reason; Bangladesh outshined Pakistan, and moved ahead in the spinning industry.

Owing to its superior quality that it offers, global buyers prefer buying cotton yarn from India, than Pakistan.

The value-added textile sector has remained to be the biggest customer of the spinning industry over the last two decades, Bilwani said.

Till recently the payment terms of the spinners were very moderate, but now they have started demanding advance payment with stipulation that yarn would be delivered only after clearance of cheque, he added.

Bilwani even claimed that, All Pakistan Textile Mills Association (APTMA) was deceiving people by propagating that the spinning industry’s exports for the current year was 20 percent lower than in 2009-10.

With volatile cotton prices, Major Brand names are using cheaper garments to attract consumers

Karachi:  Several apparel brands, including Marks & Spencer and ITC Wills Lifestyle, are using cheaper and blended garments to woo back consumers chasing low-cost options due to rising apparel prices.

With volatile cotton prices squeezing the textile industry’s profit margins despite up to 40% increase in retail prices, 100% cotton garments are being pushed out of shelves by those blended with man-made fibres such as polyester. “There is a lot of value engineering happening on apparels. Apart from passing on the price rise to uers, brands experimented with playing with different blends to come with a winning formula,” says Mansoor Lakhani, CEO Lakhani Textiles.

Cotton currently hovers around Rs 40,000 per candy. Polyester, one of the most common man-made fibres, is still 15% cheaper than cotton, hence the rush for blends.

Retail prices of apparel made out of cotton are 40% higher than last year in the case of local brands and 25% dearer for national brands. “Although cotton would continue to rule, price fluctuations have encouraged fabric manufacturers to innovate and blends have walked in, especially in the bottom of the pyramid where the consumer is extremely price-sensitive,” says Mansoor Lakhani.

Cotton market witnesses brisk trading at KCA

KARACHI: The trading remained brisk with firm spot rate and cottonseed was available in plenty, traders at Karachi Cotton Association (KCA) said on Monday.

KCA spot rate committee kept spot rate unchanged at Rs 7,300 per maund, while physical prices remained above Rs 7,300 per maund, floor brokers said.

They said mills in Punjab and Sindh stations purchased selective lots on competitive prices and grade issue was top on buying agenda in Sindh stations.

Despite rains devastation, station in Sindh remained active with sizeable trading in cottonseed and raw cotton and the buyers purchased lots around Rs 6,200 per maund to Rs 7,200 per maund. The cottonseed was available around Rs 1,500 per maund to Rs 2,500 per maund in Sindh and Punjab, depending on grade, he added.

The price would likely to see a depression in the next coming sessions, as influx of cottonseed and raw cotton have been available in plenty. He said spinners were facing grade problem in Sindh however they were still busy in buying in order to strengthen their inventories to cope with any shortage.

Sunlight for the next 10 days would play a major role in drying up cottonseed and dry cotton in Sindh rain affected stations. He said second grade lint also changed hands in Sindh around Rs 6,000 per maund to Rs 6,100 per maund while exporters remained on sidelines due to grade problems.

Half of the total transactions in Sindh and Punjab stations changed hands on early deals delivery basis, which did not allow the spot rate committee to readjust spot rate.

The ginning units in Sindh and Punjab stations accelerated their ginning activity, as weather was getting better, Ahmad maintained.

The buyers in Sindh and Punjab stations also made deals on forward delivery basis for around Rs 6,500 per maund and Rs 6,600 per maund respectively, depending on grades.

New York Futures market faced some downward correction as October stayed at 109.08 cents per pound and December stood at 110.52 cents per pound says Mansoor Lakhani, CEO,  Lakhani Textiles.

Japanese firms will invest in the upcoming Pakistan Textile City

Japanese firms will invest in the upcoming Pakistan Textile City in the Eastern Industrial Zone of Port Qasim in Karachi.

The Textile City project is aimed at attracting maximum foreign direct investment to give a fillip to the country’s textile and garment industry. The plan is to establish at least 277 new textile and garment units in the demarcated area for the project.

It is being set up on 1,250 acres of land as a state-of-the-art industrial zone for value-added textile sectors. It will be equipped with latest infrastructure facilities and is estimated to help increase the country’s exports significantly.

During the visit of a Japanese delegation, Federal Minister for Textile Industry Makhdoom Shahabuddin gave an assurance that latest facilities and total security would be provided to Japanese investors.

All Pakistan Textile Mills Association (APTMA) Chairman, Mr. Gohar Ejaz told Fibre2fashion, “We are looking forward to a lot of investments not only from Japan, but also from Korean and Chinese companies to set up their apparel units in the Textile City.”

“Pakistan is the 4th largest producer of cotton and the 3rd largest producer of yarn in the world. It has surplus of US$ 2 billion worth of yarn and fabric, in addition to availability of skilled manpower to set up garment units. Hence, it will be a great opportunity for large companies from these 3 countries – Japan, Korea and China – to invest in the Textile City and set up export-oriented manufacturing units,” he reasoned.

He further explained, “It makes sense to invest in the Textile City now, as it is still in the planning stage. Pakistan every year exports billions of dollars of dyed fabric alone, so the fabric is readily available.”

Among other reasons for investing in the Textile City by Japanese and other firms, Mr. Ejaz said, “Pakistan-made fabrics are exported to all branded manufacturers. The products are of very high standards and are approved by all the big companies. So, it should attract foreign companies to come and invest in the project.”

“Finally,” the APTMA Chairman said, “the grey or dyed fabric producing companies in Pakistan meet international standards. All these are enough reasons for Japanese companies to invest.”

APTMA concerned over unprecedented gas, electricity cut

Spokesman of All Pakistan Textile Mills Association (APTMA) has expressed deep concerns over textile industry being subjected to severe electricity and gas shortage situation.

The SNGPL is also unilaterally curtailing gas supply for three days a week against a clear direction from the federal Petroleum Minister for twice a week gas curtailment for textile industry. Furthermore, he said the Pepco has also started electricity shut downs for long hours, ranging between 8 to 10 hours a day, resulting into workforce layoff, production and export losses.

The APTMA spokesman added that the textile industry is constrained to run 30 – 40% below capacity due to energy shortage, restricting its potential to grow fast and earn foreign exchange for the national exchequer. The textile industry cannot afford closure of units for a single day, as it operates 24/7.

There is no standby arrangement and it is not viable to operate on alternative fuels other than gas and electricity. The SNGPL has also started disconnecting gas supply for three days a week against an earlier arrangement of two days a week.

APTMA spokesman said the National Transmission and Distribution Company was disconnecting electricity supply to textile units intermittently causing machinery damages besides disturbance in shifts of textile workforce.

He said despite an encouragement extended to textile industry by the President of Pakistan and Federal Petroleum Minister, the SNGPL is continuing with three days a week gas supply curtailment since September 17.

He said the central Chairman Gohar Ejaz is set to take up the issue with the federal Petroleum Minister on Wednesday (today) for immediate reverting to the agreed load management plan.

The APTMA spokesman said the government should exempt the industry on independent feeders from electricity load shedding besides revising the gas load shedding to twice a week from thrice a week at present.

Reduction in exports due to short supply of energy, APTMA

Chairman All Pakistan Textile Mills Association (APTMA) Mohsin Aziz has said that massive decline in textile exports in the month of October both in value and quantity terms is alarming and this trend is likely to continue in the month of November without redress the issues of energy shortage and high mark up rate for textile industry.

He cited that the IMF latest report has also endorsed the APTMA concerns regarding sluggish economic trends, particularly rising trade deficit amidst dwindling exports. He said the exports may drop further in coming months due to unfavourable circumstances.

According to him, textile exports though increased in value terms during last four months of current fiscal, yet all textile exports declined in quantity terms in October. The exports of cotton yarn, cotton cloth, knitwear, bed wear, towel and readymade garments have registered decline by 26%, 32%, 26%, 28%, 12% and 14% respectively, he added.

Chairman APTMA said short supply of energy was one prime reason behind drop in exports, as the textile industry has been denied gas supply for 120 days during 2011 against much lesser days during previous year.

Further, he said, high interest rate was restricting industry expansion. According to him, a reduction of 150 basis points to produce export surplus has failed in pushing credit off take, which means the interest rate is yet on higher side and both commercial and industrial borrowers are reluctant for further financing.

Chairman APTMA said the interest rate the world over ranges between zero to one percent and the discount/policy rate is not more than 8.5% in the regional economies against Pakistan where it is still in the double digit to 12%. He said the IMF is also of the opinion that improvement in employment and living standards not achievable unless economic reforms take place by ensuring industrial expansion and new set ups with reduction in interest rates.

He said the SBP should reduce the discount rate by 250 basis points in upcoming monetary policy on November 30th to ensure single digit mark up in the country. According to him, curbing the inflation must be priority of the government but still it should not be at the cost of industrial growth, as reduction in discount/policy rate would not affect inflation and instead it would be helpful in creating new jobs.

Chairman APTMA has urged the government to ensure uninterrupted energy supply to the industry forthwith besides reducing mark up to single digit to let the industry expand and perform to contribute in national economy.

All Pakistan Textile Mills Association (APTMA)

TDAP urged to explore new markets for Pakistan’s textile exports

The Trade Development Authority of Pakistan (TDAP) has been asked by the Senate Standing Committee on Textiles to explore new world markets to boost country’s export volumes.

The Committee Chairman Gul Muhammad Lot said Pakistani industries, and textile industry in particular, should focus on African economies as their core export destinations.

The TDAP representative apprised the Committee that they have already diverted their focus from Europe and the United States to Asian nations and are even considering penetration into South American countries like Chile, Argentina, Peru and Brazil, in near future.

The Committee met to discuss issues like outcomes of organizing global textile exhibitions and expenses incurred for the same, and also to ponder on the favourable and adverse consequences of bestowing India with the Most Favoured Nation (MFN) status.

The Committee voiced its concern over TDAP’s selection of venues for organizing trade events and also over not coordinating with the concerned Ministry of Textiles. It said the TDAP is organizing international trade fairs in countries like Germany, United Kingdom and France, where it is not meeting expected response to match the expenditure that goes in organizing such an event.

APTMA rejects monetary policy

Acting Chairman All Pakistan Textile Mills Association (APTMA) Seth Muhammad Akber has rejected monetary policy and said that maintaining mark up at 12 percent would add more to the Non Performing Loans (NPLs) and unemployment in the private sector. He said the textile industry was expecting a reduction in interest rate to single digit, as the industry was accruing heavy losses on present levels amidst unprecedented energy crisis in the country. Seth Akber also criticised the SBP approach on curbing inflation through high mark up, as major borrower of the banks was the government and not the private sector. The government was borrowing heavily at the cost of the growth of private sector, which was losing viability fast due to high financial cost, he added. Acting Chairman APTMA said absence of surplus liquidity in the market was prime reason behind lack of investment in the industry. The population, on the other hand, was multiplying fast, which means high rate of unemployment in the absence of expansion plans of industry due to high interest rate

An export target of 80 million yards of cloth for the next calendar year

An export target of 80 million yards of cloth for the next calendar year has been fixed under an agreement between the government and the All-Pakistan Textile Mills Association, it was announced here yesterday.

This quantity, according to a press note issued after the agreement, will be distributed among the mills in West Pakistan on a pro rata basis in accordance with the number of looms in each unit.

The press note said that as the target for export is a comparatively modest one, the APTMA does not foresee any difficulty in reaching it. If, however, any individual mill does not participate in these arrangements, the Association, with the government’s approval, will take necessary action against it and ensure the export of the shortfall.

As a further measure to step up the production of cloth, the government has decided to allow the mills to install additional looms to raise the ratio of looms to spindles from one for 60 to one for 40.

This will raise the Second Plan target of looms from 41,666 to 62,500. The government has been assured by the Association that exports of this order will not have any significant impact on the home market and, therefore, internal prices will remain unaffected.
Lakhani Textile is the leading exporter of Textile products from Pakistan. We specialize in Home Textile and Garments of all types.

Textile Exporters have decided to stop purchase of yarn immediately

Textile Exporters have decided to stop purchase of yarn immediately due to exorbitant price hike in the local market and in case the situation becomes worse they will close down their Factories. Consensus towards this decision was arrived at an emergent meeting of the local textile exporters here today to forge line of action against the speculation and un-certain condition in the local yarn market.

Terming the recent price hike of yarn as fatal for the Industry, they said that the Textile Industry was already in doldrums as the cost of production has already gone beyond the control and our exportable goods are not competitive due to high prices. The Gas closure has added fuel to the fire and the Industry is on the verge of collapsing. Under these circumstances they were constrained to stop purchase of yarn and also to close down their Mills in case there is no improvement.

They further stated that polyester fiber was alternate raw material but its prices were also out of reach of the textile exporters. They have demanded removal of import duty on Polyester Fiber.