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News Clips 04 October, 2014

[ PRGMEA to devise strategy to cash in on GSP Plus opportunity ]
[ PRGMEA elects office-bearers ]
[ Limited product range reins textile sector exports ]
[ TDAP directed to submit report on funds released for projects ]

PRGMEA to devise strategy to cash in on GSP Plus opportunity   [ top ]

Business Recorder, October 04, 2014
Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) has decided to devise a long-term aggressive strategy to get maximum benefits from the GSP Plus status, newly-elected Chairman of PRGMEA, Ijaz A. Khokhar, told Business Recorder.

Voicing his concern over the declining trend of textile exports, he deplored that it seemed that Pakistan's textile industry has, so far, failed to get even minimum benefits of the GSP Plus status merely because of government's lack of interest in this regard. 

Khokhar, who hails from Sialkot, is a leading textile exporter. He has been elected central Chairman of PRGMEA for the fourth time. He is also Member of Executive Board of International Apparel Federation. 

Stressing the need for a close liaison between the commerce and textile ministries for the solution of textile industry's problem, he said that the European Union (EU) granted duty free access to Pakistani made-ups under the Generalised System of Preference (GSP) Plus status from January 01, 2014. Under the GSP plus status, he added, Pakistan's textile products could be exported duty free or on preferential duty basis for next 10 years. 

This status provides Pakistani textile exporters a duty free or preferential duty rate access on 3,500 products to EU markets where previously some 10-11 per cent duty was imposed on Pakistani textile products, he said, adding that though Pakistan is one of the leading textile exporting country in the region and got the GSP Plus status from EU countries, its textile industry has been competing in the world market without any support or proper roadmap. 

"Our competitors like China and India are utilising all possible resources to capture the international markets and we also need to adopt the same approach to survive in the market", he added. 

The PRGMEA chief said that trade and industry dynamics was being changed globally and, as such, there is a need to educate our labour force as per requirement of the industry for producing quality goods. 

He said that following approval of GSP Plus status, Pakistan was expecting some $1 billion annual increase in its textile export, but the present situation was totally different than expected because Pakistani textile industry was unable to increase its exports to EU countries. 

The country's overall textile exports have posted some eight per cent fall in the first two months of this fiscal year (FY15), Khokhar added. 

Referring to his recent meeting with CEO of Trade Development Authority of Pakistan (TDAP), S. M. Muneer, he said that the latter has promised to provide all required facilities for marketing of Pakistani products in potential countries." 

He said that PRGMEA labour training institute is under construction in Sialkot while three state-of-the-art research centers would be set up at Karachi, Lahore and Sialkot to develop a roadmap for the exports of apparels. 

He suggested that textile and commerce ministers should conduct a review meeting on monthly basis to discus developments and the issues concerning GSP Plus, he suggested. All stakeholders of textile sector should be invited in such meetings so as get their feedback, he added. 

He regretted that value added textile export sector despite being the backbone of the country's economy was still facing several challenges. Pointing out that the sector is over-burdened with rising costs of doing business in the wake of exorbitant rates of gas, electricity and water and high rates of Export Re-finance and unskilled labourers, he said these issues are required to be addressed on priority. 

He regretted that with the closure of several textile industries across the country due to unavailability of gas and electricity has rendered thousands of workers jobless. 

He demanded of the government to ensure uninterrupted supply of gas and electricity to processing industry and freeze the tariff for next three years to support the textile industry. 

"We are confident that with the provision of proper gas supply, over 250 processing industries could be revived in Punjab only and as result of which some 0.1 million workers would be employed," he added. 

He complained that a huge amount of money which was outstanding against Federal Board of Revenue on account of sales tax refund claims, customs rebate claims and DLTL claims was creating severe liquidity problem, making it impossible for the industry to compete with neighbouring countries. 

About Sialkot, he said that that the city was the second world's largest exporting center of martial art's uniform and presently some 35 per cent of the world's demand was being met by the city's industry. Processing and weaving industry of Sialkot has been generating some $350 million annually, but it can earn one billion dollar annually provided a relief package was announced for the industry by the government, Khokhar said. 

He also urged Export Development Fund (EDF) be disbursed sector-wise on the recommendations of concerned associations. 

He appealed to the Prime Minister Muhammad Nawaz Sharif to help resolve the issues being faced by the textile sector on a war-footing basis. 

PRGMEA elects office-bearers   [ top ]

Business Recorder, October 03, 2014
Jawed Suleman was elected unopposed as Chairman (South Zone)/Senior Vice Chairman of Pakistan Readymade Garments Manufacturer and Exporters Association (PRGMEA) Sindh Balochistan Zone for 2014-2015 at the 21st Annual General Meeting held on Tuesday. Addressing the AGM, Jawed Suleman vowed to work hard for the betterment of the members and promote the association to new heights. 

He thanked the new Managing Committee Members for reposing confidence in him to lead the Zonal Committee. 

Limited product range reins textile sector exports   [ top ]

THE NEWS, October 03, 2014
LAHORE: Structural imbalances in the textile chain, limited product range, and a small export market keep Pakistan’s textile sector- 56 per cent of the country’s total exports- on its toes.

Textile entrepreneurs concede that this lopsided approach allows other economies like Bangladesh, Vietnam or Tunisia to surge ahead of Pakistan. 

This is despite the fact that Pakistan is the third largest consumer of cotton in the world, said Gohar Ejaz, group leader, All Pakistan Textile Mills Association (APTMA). “We, as entrepreneurs admit our short sightedness, but we were severely handicapped by the government policies,” he said, adding that these policies have reduced the product base.

The current global trade is dominated by blended textile products, in which the ratio of manmade fibre to cotton is 80:20. In Pakistan, he added, it is the other way around, with 80 per cent cotton and 20 per cent manmade fibre. “This has restricted Pakistan to only 20 per cent of the global textile market from which it earns $13 billion out of total textile trade of $640 billion.”

Lamenting the 10-year high duty protection granted to a multinational investor for establishing a polyester plant in Pakistan, he blamed the decision for making it impossible for the textile industry to compete globally in blended textiles.

Ironically, even after a lapse of 15 years some protection is still provided to the all manmade fibre producers in the name of protecting the local industry. And since the industry could not compete globally by buying expensive duty protected manmade fibre, it has been forced to use cotton that was available at global rates, he added.

Speaking in favour of the local industry, Ejaz further said that the textile sector has state of the art equipment and machinery to produce the complete textile range.

Adding to Ejaz’s comments, APTMA Chairman SM Tanveer said that textile entrepreneurs too have shown short-sightedness by exploiting only a few developing economies.

He said the local entrepreneurs limited themselves to exploring markets in a few countries like the United States, European Union, Canada, and Japan that account for only 20 per cent of the global population. Eighty per cent of the global clothing market is still virgin for Pakistani exporters. Instead of waiting for the government the textile tycoons should earmark handsome funds to explore new markets.

Tanveer also suggested exploring and exploiting the appetite for value added textiles in Asia and Africa. He said there is large scope to exploit the textile market and triple or quadruple exports from the current less than 2 per cent share in the global textile trade. 

He pointed out that 80 per cent of the textiles produced in the country are exported in one form or the other (though with very low value addition), which means that the local market accounts for only 20 per cent of local produce. “The local entrepreneurs are denied the domestic market because of under invoicing, smuggling, and massive import of used goods,” he regretted.

He said other countries like India and China enjoy 75-80 per cent share in their domestic markets and 20-25 per cent of their production in exported. “This shields their textile industries from recessions in global textiles,” he revealed. Pakistani textile sector on the other hand is extremely vulnerable to any loss to its export market.

Further highlighting the issues, especially in the spinning industry, APTMA Punjab Chairman Seth Muhammad Akber said structural balances in the industry are severe. The domestic spinning industry, he added, produces 25 per cent more yarn than can be weaved in the country. Thus, the country exports 25 per cent lowest value added textile production as yarn. “Ideally all yarn should be converted in to fabric,” he added.

We do not have the processing and finishing capacity for the fabrics that we produce from the remaining 75 per cent yarn, resultantly, over fabric worth $2.2 billion - 33 per cent - is exported as grey at a very low price. “In fact all fabric we produce should be converted in to high value apparel,” he maintained.

Akber said this was only possible if we exploit 80 per cent of the global market that is out of our reach due to imbalance in the use of manmade fibre vis-à-vis cotton.

TDAP directed to submit report on funds released for projects   [ top ]

The Nation, October 04, 2014 
ISLAMABAD - Federal Minister for Commerce Engr Khurram Dastgir Khan on Friday directed Trade Development Authority of Pakistan (TDAP) to submit quarterly report on the funds released for the projects in order to bring efficiency and transparency in the EDF funded projects. He made these remarks while chairing a meeting of the Board of Directors of the Export Development Fund. The meeting took decisions on several issues pertaining to export promotion. The Minister also said that an effective mechanism will be devised to spend the amount collected under the Export Development Cess for maximum export enhancement.

The Board appreciated the timely intervention of the Ministry of Commerce at the start of this mango export season to formulate a strategy for pest-free export of mangoes to European Union by enforcing mandatory hot-water treatment which resulted in enhancement of Pakistan’s exports to EU. It was informed that last year 237 consignments from Pakistan were rejected by EU due to infestation with fruit-fly but this year only 2 infested consignments were found. EU also acknowledged the great work done by the Government of Pakistan within a very limited time to make arrangements to export pest-free mangoes to the EU. Last year Pakistan exported 82000 MT of mangoes but this year despite EU’s strict watch on the quality of mangoes, exports rose to 90500 MT which were sold at a higher rate than the previous year.

It was decided that the Pakistan Horticulture Development Company (PHDEC) will be restructured and made vibrant to promote Pakistan’s agricultural products which has a great potential in the export market as new opportunities have emerged in Middle East, Russia and Central Asia. The Board directed to bring forth proposals to devise mechanism to make PHDEC a self-sustained organisation. The Minister for Commerce directed TDAP to bring a viable proposal to make the vapour heat treatment (VHT) plant imported by the TDAP operational well before the start of the next export season of mango. This facility will be available to the exporters at a very reasonable rate.

The Minister also directed TDAP to use VHT plant to export mangoes to Japan which requires vapor heat treatment and which is also a high-priced market as compared to the traditional EU market. The VHT plant will also be used for treatment of other fruits and vegetables and also work as model plant for investors to replicate.

The Board also decided that the Ministry of Commerce will communicate with the Ministry of National Food Security and Research and the Government of Punjab to explore possibilities to give representation to the Rice Exporters Association of Pakistan on the management and administrative boards of rice research institutes.

The Board also extended its approval to the TDAP to hold SAARC Exhibition which is proposed to be held by the end of January in the Expo Center Lahore.