textile sectopr performance pep final presentaion
TRANSCRIPT
7/28/2019 Textile Sectopr Performance PEP Final Presentaion
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Pakistan Economic Policy
Performance of Textile Sector in Pakistan
Presented By: Bilal Jawaid
7/28/2019 Textile Sectopr Performance PEP Final Presentaion
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Textile Industry is one of the prime and mature industries in Pakistan. It ranks
amongst the top textile industries in the world.
Cotton is the basic raw material for textile industry and Pakistan is the 4th
largest producer and 3rd largest consumer of cotton in the world.
About 10 percent of the world cotton crop is produced in Pakistan
The textile industry currently accounts for more than 60% of Pakistan's exports.
In Asia, Pakistan is the 8th largest exporter of textiles products
It employs 38% of manufacturing labour.
Textile contributes 46% of the total output produced, and
Textile contributes 8.5% to the GDP
Performance of Textile Sector in Pakistan
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Increase in the cotton production and expansion of textile industry has been
impressive in Pakistan since 1947.
Cotton bales increase from 1.1 million bales to 10 million bales by 2000.
Number of mills increased from 2 to 600
Spindles from about 177,000 to 805 million
In the 1950s and 1960s textile industry of Pakistan witnessed tremendous
growth, when a number of textile Spinning and Composite Units were
established.
Till 1997, Pakistan was the world’s largest exporter of yarn followed by India.
However, in 1998, India gained the NO 1 position, leaving Pakistan at NO 2.
Performance of Textile Sector in Pakistan
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In the case of cotton cloth production, a number of Asian countries have been
emerging in the international market to compete with Pakistan. These countries are
Bangladesh, India, Taiwan, Indonesia, Thailand, Turkey, Sri Lanka and Iran.
During 1973-1992, 71 spinning units with 1,136, 835 spindles, 6,600 rotors and 7,329looms were closed down. Pakistan’s govt then hired a foreign consultant form to look
into the matters, their finding was
Pakistan has failed to make real progress in the international market and is taken over by
the neighbouring competitor countries, so they recommended that
It is vital that companies play very positive role in the markets, which each one having its
own marketing activity, whose job is to understand the need of the customers and the ever
changing competitive dynamics of the markets.
Performance of Textile Sector in Pakistan
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Pakistan has a very low share of the international textile market and due
to the economic slowdown in US and Europe, Pakistan’s textiles exports
are also declining as they are mostly dependent on these two markets.
China tops the US market with a share of 36% followed by Bangladesh 21%,
Morocco 19%, India 18%, and Pakistan 13%.
In the European market, China tops again with a share of 29%, Vietnam 28%,
India 19% and Pakistan only 1.5%
Pakistan textile exports declined by 10.38% (from $13.788 billion to
$12.356 billion) during the fiscal year 2011-2012 as compared to 2010-2011.
Performance of Textile Sector in Pakistan
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industrial sector of the country is facing worst kind of power load shedding
(gas and electricity) from last few years, which is resulting in reduction in
exports.
Prices of Pakistan-made textile commodities had decreased in international
market, which is also one of the reasons for reduction in exports.
Farmers are shifting from cotton crops to other crops because they claim
That govt is discouraging local exporters through policy measures against selling
the crop in the foreign market.
That govt is not taking corrective actions to stabilise domestic prices
That govt is not announcing support prices for cotton crops
Performance of Textile Sector in Pakistan
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Farmers also claim that APTMA tries to keep crop prices as low as
possible so that the cost of production for textile companies stays low.
This low price causes a loss to farmers of cotton and hence they are willing
to shift to other crops. This will ultimately cause a decline in textile exports.
The industry is bracing for more trouble ahead with continuing crises of
electricity and gas, international market access, global economic
slowdown etc.
Performance of Textile Sector in Pakistan
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Strengths
Raw material base: Pakistan has high self sufficiency in raw material and
is the fourth largest producer of cotton.
Labour: Labour in Pakistan is available in abundance and that too at a
cheap price, so this means low cost of production.
Rich Heritage: Due to cultural diversity and rich heritage, designers
come up with new different and attractive designs which are appreciated
worldwide.
Domestic Market: Shift of population from rural to urban areas, increase
in income level and growth of population increases domestic demand.
Performance of Textile Sector in Pakistan
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Weaknesses:
Research & Developments: no efforts are being made by the APTMA
in the R&D of the textile industry to enhance the quality of products,
upgrade the technology used, and encourage effective methods of
production in order to compete internationally.
Dependence on Cotton: Textile sector heavily depends on cotton
and a low cultivation of cotton will destroy textile industry.
Labour Productivity: Though labour is available in abundance and at
a cheap price but their productivity is very low. (Work which is
completed in 33 minutes in USA, takes 75 minutes in Pakistan).
Performance of Textile Sector in Pakistan
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Weaknesses:
Poor Infrastructure: supply of water, electricity, gas, transportation etc
Poor Quality Standards: other than multinationals or big companies,
most of the medium and small sized units cannot ensure the reliable and
consistent quality standards.
Unstable Political Situation: Political unrest, strikes and terrorism have
critically affected the economy of Pakistan.
System Orientation and Supply Chain: We are disorganized,
disconnected and distorted. Time management is very much important
aspect in the business but we lack this aspect.
Performance of Textile Sector in Pakistan
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Opportunities:
Marketing: If investment is made in training sales force and in marketing
textile products, market share can be captured from other smaller
competitors.
Collaboration with Foreign Companies: By doing so, latest technologies
can be used, which will not only reduce cost of production, but also
improve product quality and will comply with international standards.
Re-engineering of Production System: Improve production system to
manufacture flawless products, it may be a costly but a very fruitful and
necessary measure to stay competitive in the long run.
Performance of Textile Sector in Pakistan
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Opportunities:
Add Value to Product: It is better to export yarn than cotton, to
export readymade garments than to export only fabrics and so on.
Image Building of Pakistan to attract FDI: If govt succeeds in
building a secure environment , this will increase FDI in Pakistan.
Cost of Business: Rising inflation also increase the cost of
production. Unnecessary costs must be controlled if Pakistani Textile
industry is to survive in the middle of the two giants of the textile
sector in the world. (India and China, where labour and raw material is
available at a much lower cost than Pakistan.)
Performance of Textile Sector in Pakistan
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Threats:
New Competitors: New competitors such as Bangladesh, Vietnam and
Turkey are a threat to our textile industry. Though competition cant be
avoided but we shall try to ahead of them by reforming our strategies
Phasing out of Quota System: WTO imposed quota system on exports of
textile products, which is now ruled out, so the Chinese and Indian
manufacturers may gain most of the market share.
Fashion Life Cycle: Fashion changes quickly nowadays, so buyer wants quick
deliveries of their product, even at higher cost. So if our exports take longer
time, people will not prefer buying from us.
Performance of Textile Sector in Pakistan
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