Falling export of textile products

THE textile industry has been hit by falling export trend. Most of the exporters seem to be nervous which has raised alarm bells for the country’s economic managers.

Pakistan is facing tough competition from China, India and Bangladesh. Exports of textile products were down by 7.10 per cent to $1.625 in July-August as compared to the same month last year.

And yarn export is increasing vis-a-vis apparel, bed linen and cotton fabric. The exports of semi-manufactured products are rising as against slowing down of value added products which fetch maximum price.

Recently, UNDP released Asia-Pacific Development Report 2006 which says that Pakistan fared badly in the region’s textile exports compared to Bangladesh— a non-cotton-producing country.

Pakistan earned less ($5.39 billion) than Bangladesh ($6.99 billion) in 2005 through the export of textile and clothing, though it exported nearly 200 million kg more than Dhaka. India and China which are cotton-producing countries have a bigger share of the international market in terms of volume and are also earning far greater amounts of foreign exchange from their exports.

To improve the value addition capacity, textile industry sources claim that around Rs450 billion has been invested in modernisation and improvement of production technology and textile machinery worth $4 billion was imported in the last four years.

Even after such a huge investment, textile exporters find themselves in a tough situation. They claim that the cost of doing business in Pakistan is too high. Most of them demand a cut in utility costs. They want the government to have a fresh look at gas and electricity rates. On the other hand, it seems that the textile industry is the most pampered industry getting rebates for R&D, swapping of high cost loans with subsidised credit and a range of other concessions.

In the post-quota regime, the era of concession is fast diminishing; global trade is swiftly marching towards a level playing field. Instead of relying on governmental concessions, the textile management needs a paradigm shift.

If one looks at the successes of India and Bangladesh, one finds that apart from cost of doing business and official incentives, they focus on workers’ skill development, improvement of working conditions, catching up with market ‘fashion’ trends, design, and brand development.

To improve the workers working conditions and wages, Bangladesh garment industry leaders have recently persuaded foreign buyers to agree to higher prices for ready-made garments. Most of foreign buyers such as Wal-Mart Inc and JC Penny etc are willing to raise prices if factories ensure social compliance.

However in Pakistan, textile workers are the most neglected, particularly women who get the lowest wages besides having no protection of job as only two per cent workers have appointment letters while the rest work on daily wages, as stated at a seminar on textile policy organised by Sustainable Development Policy Institute (SDPI).

Fashion trend is a key element in the business of value-added clothing or garment. Fashion changes quickly, at least twice a year in developed markets. However in Pakistan, experts believe that industry does not keep pace with changing trends. Falling exports of value added textile products is due to its ability to keep pace with latest fashion trends. Garment designing is critical to boosting exports and it is vital that industry should focus on it.

If we look at the manufacturing centres of Indian garment industry, it has developed in some regions, specialised in niche products, making it more convenient for international player to source and work in India. Each region functions works independently and it is self-sufficient in the technical, raw material and labour needs of specific products.

Regions such as Ludhiana have been developed for knit apparel, Bangalore for trousers and structured garment destination, Tripura for knitwear, Delhi for innovation and value added products and Jaipur for handicrafts and traditional prints.

Delhi has been selected for garment-based industry because it is known for its ability to develop innovative products and focus on value addition. Delhi is a vibrant metro city and resourced with information on latest trend, fashion, fabric, design, technology which enables it to produce diverse products catering to the needs of international buyers.

To catch with global fashion trends, most of the garment manufactures around the world and especially in India and Bangladesh utilise the information highway connected with major fashion trend-setting sites.

Management is one of the key elements in delivering value-added products. In Pakistan, most of the textile units are family managed and they have not been able to absorb the modern corporate culture in management and human resource development.

Lastly, it is evident that Pakistan is way behind regional countries in the export of goods although it has some distinct advantages. Even the small gains that it has made so far in the world market have come more because of the concessions of western countries accorded to Pakistan’s textile and clothing exports in appreciation of its role in the war on terror.

It is high time for the industry to focus on fashion trends, quality/human resource management and improvement in working conditions for workers. The government should also reduce the cost of inputs so that industry can compete effectively with its regional players.

Courtesy: The DAWN

Leave a Reply

Your email address will not be published. Required fields are marked *