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News Clips 17 October, 2014

[ Textile policy still awaits govt approval ]
[ Exports fall 10pc in July-Sept ]
[ Setting up of 600 megawatts power project: textile city to sign joint venture with K-Electric ]

Textile policy still awaits govt approval   [ top ]

Dawn, October 17th, 2014
ISLAMABAD: Despite a lapse of three months, the federal finance ministry is yet to approve the new textile policy which carries measures to increase country’s textile exports to $26 billion by the year 2019.

The policy was sent to the ministry in June for an approval by Finance Minister Ishaq Dar, but it was being delayed despite the fact that textile exports showed negative growth during the first quarter of the current year.

A well-placed source in the ministry of textile industry told Dawn that the five-year textile policy will carry support schemes worth Rs85bn in a period of five years.

The first five-year textile policy was unveiled in 2009, but there were major constraints in its implementation which came to an end on June 30. The new policy will be effective from July 1 focusing on value-addition.

A major part of the proposed textile policy was announced in the budget 2014-15 by giving cash incentives to the textile and clothing exporters. There are few infrastructure projects, like establishment of garment-weaving cities, ginning institute, etc., under the proposed textile policy as well, the source added.

Prime Minister Nawaz Sharif constituted a ministerial committee on energy for the textile sector in April, headed by Finance Minister Ishaq Dar. The source said so far not a single meeting of the committee had been held to address the energy issue faced by the textile sector.

According to the source, the textile industry ministry has sent eight reminders to the finance ministry for holding the meeting of the energy committee.

The energy issue, according to the source, was also taken up in the Economic Coordination Committee of the federal cabinet in which the Petroleum Ministry was asked to cooperate with the textile ministry.

“There was no cooperation from the petroleum ministry on the issue,” the source claimed.

After getting a lukewarm response from the finance and petroleum ministries, the textile ministry has sent a summary to the PM Secretariat to look into the issue, the source added.

“We are awaiting a response from the PM Secretariat for holding a meeting with the premier over the issue,” the source said.

The textile industry ministry predicted a steep decline in textile exports in the winter season because of further deterioration in supply of gas and electricity to the textile industry, especially in Punjab. 

To look into the issues, the textile industry ministry called a meeting of Federal Textile Board on Oct 27 in Islamabad to discuss the performance of textile sector and the proposed textile policy.

An official statement issued by the textile ministry also showed concern on falling exports despite having zero-rated access to the European markets.

According to the statement, the Federal Minister for Textile Industry Abbas Khan Afridi has taken notice of declining textiles exports.

The minister also showed concern that after the grant of GSP+, instead of increase, textile exports have showed declining trend although it was expected that textile exports would increase by at least $1 billion during calendar year 2014.

During the first two months of current financial year (July-August 2014-15), textile exports have decreased by 5pc as against the corresponding period of previous fiscal year.

Yarn and cloth categories were the major losers in which exports decreased by 26pc and 13pc, respectively.

The readymade garments sector had a slight reduction of 2pc. The decrease in textile exports also made a negative impact on cotton prices. As a consequence of energy shortage, the textile production capacity of various sub-sectors has reduced.

It is estimated that the impact of less availability of energy to the export-oriented textile sector means potential loss of around $2bn exports per annum which can easily be made to EU in the presence of GSP+.

The minister was scheduled to hold meetings with the textile sector stakeholders throughout the next week, including visits to Lahore and Faisalabad, added the statement. 

Exports fall 10pc in July-Sept   [ top ]

Dawn, October 15th , 2014
ISLAMABAD: Exports fell by 10 per cent to $6.015 billion in the first quarter (July-Sept) of this fiscal year from $6.695bn a year ago, Pakistan Bureau of Statistics said on Tuesday.

In rupees, the exports declined by 12.45pc during the period.

The government’s subsidy scheme announced in the latest budget for exporters, and zero-duty access to European markets have failed to accelerate exports from the country.

On a month-on-month basis, the decline reached almost 17pc in September 2014 from a year ago. The drop was 19pc in rupee terms.

Commerce Minister Khurram Dastgir was not available for comment despite several attempts.

The only answer came from a commerce ministry official was that the decline was because of energy shortage, especially in Punjab.

But the most important issue, according to an exporter, was the lack of interest of the ministry in helping exporters to overcome the problems. Dastgir has also not held a meeting with stakeholders so far to review the reasons of decline, the exporter added.

Since April this year, the country’s exports have been in decline despite having preferential GSP+ market access to 28-nation European Union.

Although Pakistani rupee depreciated in the last months, it could not help boost exports.

An official in the commerce ministry said international buyers were reluctant to drop orders with Pakistani exporters because of political uncertainty here.

In the previous fiscal year (2013-14), export proceeds grew by 2.75pc to $25.132bn from $24.460bn in 2012-13.

Meanwhile, imports rose by 12.01pc during the quarter, reaching $12.519bn as against $11.177bn over the same period of last year.

In September, imports grew by 20.31pc on a month-on-month basis. The growth was one of the highest in the last couple of years. However, it was not clear import of which commodities witnessed a robust growth during the month.

Pakistan’s trade deficit in the July-Sept quarter expanded by 45.11pc to $6.504bn as against $4.482bn over the same period of last year. Trade deficit in September was 102.73pc given the high growth in imports.

In FY14, imports grew marginally by 0.36pc to $45.113bn from $44.950bn in FY13. 

Setting up of 600 megawatts power project: textile city to sign joint venture with K-Electric   [ top ]

Business Recorder, October 15, 2014
Pakistan Textile City Limited (Textile City) has decided to take formal approval from the Ministry of Textile Industry to sign a joint venture with K-Electric for setting up a 600 MW coal-based power project. K- Electric has presented a proposal to Pakistan Textile City for a joint venture of 600 MW coal-based power project in the Textile City which will help to supply cheap power, steam and hot water to value-added textile industries in the Pakistan Textile City zone. 

The proposal was discussed in the 58th Board of Directors meeting of Textile City Limited held in Karachi. The meeting was chaired by Dr Mirza Ikhtiar Baig, chairman of Pakistan Textile City Limited. During the meeting, a team of K-Electric led by Dr Syed Naveed Ahmed, chief of Corporate Strategy & Business Development, along with Ammar Talat, Deputy Director, gave a detailed presentation of the project. 

After reviewing the proposal, the Textile City Board has granted approval of the agreement with K-Electric for setting up a 600 MW coal-powered project. As both parties are agreed in principle for the proposed joint venture, the Textile City Board has also decided to forward its recommendation to the Ministry of Textile Industry for the approval. A joint venture agreement will be singed with K-Electric, when the ministry will grant formal approval, sources said and added that K-Electric has acquired expertise in coal-powered electricity generation as they are in process to convert their two units at Bin Qasim from furnace oil to coal. 

K-Electric has already signed an agreement with Pakistan Textile City to supply 50 MW uninterrupted power to the Textile City for initial industries to be set up there. Required infrastructure work for the supply of 50 MW has already been completed by K-Electric. During the meeting it was also decided to speedily completion of infrastructure work to launch the Textile City project in next two months. Electricity and water have been available in the project. 

The board appreciated the efforts of the chairman for removing hurdles of the project of the vital importance which will provide 8,000 jobs in Karachi and would also generate additional revenues for the national exchequer. The meeting was attended by Directors, Wajahat A. Baqai, EVP of National Bank, Shabbir Anwar Kazi, DG, Port Qasim Authority, Sheikh Aftab Ahmad, SVP of Saudi Pak Industrial & Agriculture Investment, Zarrar Haider, Joint Secretary, Ministry of Industries, Group Head of NIB Bank Shah Miftahul Azim, Muhammad Salahuddin, Deputy Secretary, Ministry of Textile, and CEO of Pakistan Textile City Muhammad Hanif Kasbati.