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News Clips 28 October, 2013

[ Textile exporters eye on EU GSP plus status ]
[ Trade preferences: Germany backs Pakistan’s bid for EU GSP Plus status ]
[ CM Punjab approves Garments City project ]
[ Rains, floods: Cotton crop worth Rs 1.84 billion damaged in Punjab ]
[ Pakistan may lose Rs4b leather export as 30pc hides damaged ]

Textile exporters eye on EU GSP plus status   [ top ]

Business Recorder, October 27, 2013
Textile exporters have pinned their high hopes for a significant surge in textile exports after getting duty free access to EU following GSP plus status. Textile industry has the potential to double its existing 1.5 per cent share in global textile trade by reaping the benefits of GSP plus.

Sheikh Ilyas Mahmood, chairman and Adil Tahir, vice chairman Pakistan Textile Exporters Association (PTEA) said that textile industry is expecting to finally get duty free access to EU in January next year and is planning to boost textile exports at least 100 percent in next 4 years through value addition. Pakistan exports 2.7 billion dollar worth of yarn and 2.5 billion dollar worth of plain and dyed fabric annually to Bangladesh and other countries, which are benefiting from our raw material by adding value and export to EU.

Pakistan textile exports stand at 13.06 billion dollars in outgoing fiscal year, which is on rise in last five years despite the worse energy crisis scenario. In next 4 years, Pakistan textile industry will use its whole capacity to achieve the export target of 26 billion dollars as country is expecting GSP plus status in January and this free access to EU would help us to achieve this goal, they added.

PTEA Chairman Ilyas Mahmood also appreciated the Prime Minister stance for increased trade in his recent tour of USA and hoped that there will be a positive outcome of his tour and both sides will make quick progress on removing tariff barriers and other obstacles that hampered bilateral trade and investment. Pakistan is seeking tariff concessions and greater access to the US market in an effort to boost economic growth in coming years, he added. He is confident that value of Pakistan's exports to EU and USA can go up significantly. In this purpose government should facilitate the exporters in terms of utility supply round the year.

Adil Tahir was of the view that EU is not only Pakistan's largest export destination and trading partner; it is also engaged with Pakistan in multiple levels of social and economic development activities. Pakistan's exports to the world have risen by 12.5 per cent per annum, slightly higher than the 10.3 per cent annual growth in exports to the EU.

As a result, exports to the EU as a share of Pakistan's total global exports have declined from 30.8 per cent in 2003 to 28.4 per cent in 2011, a decline of 9.1 per cent nevertheless; the EU still remains Pakistan's largest export market, he said. PTEA office-bearer urged the government to complete its groundwork for GSP plus status to get full benefit from this passage of the waiver, the uninterrupted supply of gas and electricity to the industry should be ensured.

Trade preferences: Germany backs Pakistan’s bid for EU GSP Plus status   [ top ]

The Express Tribune, October 26th, 2013
ISLAMABAD: As the European parliament is going to consider Pakistan’s request for duty-free access to its markets, Germany – Islamabad’s biggest European trading partner – has provided its support for the country’s bid to qualify for the trade preferences scheme.

“Germany’s position on the Generalised Scheme of Preferences (GSP) Plus is known and it supports Pakistan’s application,” said German Ambassador to Pakistan Cyrill Nunn while speaking at a press conference here on Friday.

He said the European parliament would consider at the beginning of next month the GSP Plus package for 10 countries including Pakistan and the ball was in its court. The European Commission has already approved the package that will allow the 10 developing countries to export their products without any duties.

The GSP Plus is granted to those countries that ratify and implement international conventions relating to human and labour rights, environment and good governance. The EU has been closely watching Pakistan’s human rights record and also fiercely opposes the death penalty.

Nunn held the media interaction just a couple of days before a 90-member Pakistan delegation comprising over 60 leading companies and headed by Punjab Chief Minister Shahbaz Sharif leaves for Germany to attend a conference.

The delegation will attend Pakistan Business Day conference in Berlin and Munich on October 30 and 31. It is being organised by the Pakistan German Business Forum in association with the German Embassy in Islamabad and the German Consulate General in Karachi.

The trip comes in the backdrop of meetings held between German Federal Foreign Minister Dr Guido Westerwelle and Prime Minister Nawaz Sharif in early June this year, in which they agreed on tangible measures to enhance bilateral cooperation.

Nunn said it would be the largest and highest-ranking Pakistan trade delegation in the history of bilateral relations. Germany had extended the invitation to all provincial chief ministers, he added. But only Shahbaz chose to attend the conference.

Many German multinational companies and medium-sized firms have registered for the conference, showing their interest in enhancing trade ties with Pakistan. This initiative would highlight the potential of Pakistan’s economy to German investors and at the same time bring relevant Pakistan companies together with business partners to Germany, he added.

With a trade volume of over $2 billion, Germany is Pakistan’s biggest trading partner in the European Union and the second biggest in the world followed by China. Over 40 German companies are present in the Pakistan market in different sectors such as engineering, energy, pharmaceuticals and logistics.

But Nunn said the volume was far below the potential. Germany’s trade with India was over $12 billion, with Malaysia $10.3 billon, with Thailand $10.8 billion and with Bangladesh double than that with Pakistan.

Nunn said last year there was a 10% increase in bilateral trade despite absence of any major initiative, adding German companies manufacturing mining machines were keen to do business with Pakistan.

Highlighting common concerns of foreign investors, Nunn said energy crisis, rule of law, transparency and protection of investment were the issues that worried the investors. “We need more conducive surroundings, which also encompasses security situation,” he added.

He said the new government was taking encouraging economic decisions, particularly in the areas of energy and taxation. Its decision to hold an all parties conference on economy was also a welcome sign, he said.

Supporting normalisation of Pak-India trade ties, he stressed that opening borders for trade was very important and the European experience showed free trade between nations would lead to a win-win situation.

Pakistan could be a good place for setting up manufacturing units to serve neighbouring countries but it was linked with opening of borders, he said.

CM Punjab approves Garments City project   [ top ]

Business Recorder, October 26, 2013
Punjab Chief Minister Shahbaz Sharif has granted approval to the project of setting up Garments City near Kala Shah Kaku Motorway. He said that the Garments City would be set up over 1000 acres of land where Pak-China industrial zone would also be established. He said that all facilities would be available to the industrialists under one roof in the Garments City while a labour colony, hospital and other facilities would also be provided on priority basis.

He was presiding over a high level meeting at Model Town which was attended by Provincial Ministers, Colonel Shuja Khanzada (Retd), Muhammad Shafique, Tanvir Aslam Malik, Hameeda Waheed Uddin, Advisor Dr Ijaz Nabi, MPA Ayesha Ghaus Pasha, acting chief secretary, senior member Board of Revenue, chairman Planning & Development, secretaries of concerned departments, office-bearers of Pakistan Garments Association and senior officials. Advisor to Chief Minister Dr Ijaz Nabi gave a briefing on the proposed project of Garments City.

Addressing the meeting, the CM said that the project of Garments City is of vital importance and would be implemented expeditiously. He said that all matters regarding the glorious project of Garments City would be settled in a transparent manner. Shahbaz said that the implementation of the project would result in promotion of garments industry. He said that Chinese investors associated with textile, readymade garments and knitting have shown interest in investment in Punjab-China Industrial Zone.

The CM while issuing instructions to the concerned authorities to prepare a practicable financial model of the Garments City directed that a complete survey be conducted for the assessment of energy requirements of the Garments City and comprehensive recommendations be formulated in this regard.

He also directed that proper planning should be made for the provision of infrastructure in the Garments City. He emphasised the need of special training in various skills for textile, garments and other sectors. The CM issued instructions for constituting a committee to evolve technical training programme and directed that the committee should prepare a comprehensive training programme as early as possible so that skilled workforce could be provided to the factories to be set up in the Garments City.

Office-bearers of Pakistan Garments Association welcomed the establishment of the project of the Garments City and said that chief minister has evolved a glorious project for development of garments industry. They assured full co-operation to Punjab government in this regard.

Rains, floods: Cotton crop worth Rs 1.84 billion damaged in Punjab   [ top ]

Business Recorder, October 26, 2013
Punjab government has estimated a Rs 1.84 billion cotton loss. The crop - sown on 2,46,110 acres - was damaged by recent rains and floods across the province, it is learnt. According to a report of Agriculture Department of Punjab, cotton was sown on 5.40 million of acres, whereas 2,46,110 acres have been affected by floods.

According to the report Rajanpur is the worst-hit district where cotton crop on about 1,08,584 acres was damaged, followed by Multan where cotton on 19,791 acres was damaged. About 18,195 acres having cotton crop was damaged in Jhang, 16,279 acres in Khanewal, 14,596 acres in Bahawalpur, 16,279 acres in Vehari, 3,525 acres in Pakpattan and 7820 acres in D G Khan.

According to officials, during 2013-14, cotton crop was planted on an area of 5.4 million acres in Punjab against the target of 6 million acres, showing 9 percent decrease against the target, which is 5.2 percent less than the last year's sown area. Rain and floods further damaged 2,46,110 acres, said officials adding that decrease in sowing was mainly attributed to the low prices of seed cotton during last two to three years and farmers' preference towards maize, sugarcane and rice due to monetary advantage over cotton.

The Cotton Crop Assessment Committee (CCAC) has projected cotton production target for the current season (2013-14) at 11.95 million bales against the initial target of 13.22 million bales, while the local industry requirement is about 13 million bales. Pakistan is likely to import about 3 million bales of cotton, worth $1.2 billion to meet local industry requirement, after missing commodity production target, officials maintained.

According to officials, the decline in cotton production would not only result in increasing the price, but create shortage of raw material that would also affect negatively in the value-added textile exports. The expected decline in commodity production would also deprive the country of valuable foreign exchange earning, they added.

Pakistan may lose Rs4b leather export as 30pc hides damaged   [ top ]

The Nation, October 28, 2013
LAHORE - Severe power breakdowns have damaged around 20 per cent hides of sacrificial animals which may touch the level of 30 per cent, causing loss of about Rs2.5 billion to both tanneries as well as hide dealers, as the leather industry is presently facing electricity loadshedding of more than six hours.

This was stated by Pakistan Tanners Association Central Chairman Sheikh Saqib Saeed while talking to The Nation. Discussing the latest figures of hides’ collection, gathered from all over the country by the PTA, he said that apart from direct loss of around Rs2.5 billion due to animals skin damage, the country will have to suffer additional loss of over Rs4 billion foreign exchange, as the industry could not make value-addition to leather of about 60 per cent.

“With the double-digit interest rates, unprecedented inflation level and unavailability of gas and electricity, the government must intervene to ensure that the tanning units do not shut down, he said. The PTA Central chairman observed that Pakistan is one of the biggest markets of the raw hides and skins in Asia and about 30 per cent of the total produce is generated only on the occasion of Eid.

Sheikh Saqib Saeed said that Eid-ul-Azha has great importance for rural economy, as tanning industry purchases about 30 per cent of its raw material during Eid.

Former PTA chairman Agaha Saiddain estimated that economic activity of around Rs130 billion were generated on Eid days, including Rs120 billion through animal sales and Rs7 billion through purchases of hides and Rs3 billion through allied industries. Agha said that tanneries are being supplied gas just for one day a week, besides power suspension of 6 hours, asking the government to exempt the tanning industry from gas and power load shedding at least in next three months. “This is necessary for processing hides before getting putrefaction which entirely damages the raw hides.

The skins, being a perishable item, cannot be stored without processing which requires uninterrupted supply of electricity and gas.”

Sheikh Saqib Saeed pointed out that hides are basic raw material for leather industry to make leather garments, bags, footwear, ballets and gloves. All these goods are exported that generates substantial amount of foreign exchange.

The PTA central chairman demanded the government to grant special status to the tanning industry and ensure supply of gas and electricity. He said that dealers will suffer billions of rupees loss, as the rate of hides is constantly decreasing due to climate conditions and power unavailability.

He stated that hides are generally damaged due to hiring of unprofessional butchers. Moreover, about 12 per cent of the hides are wasted because of lacking appropriate knowledge of their preservation.

Mr. Saqib said that industry desperately needs the uninterrupted supply of electricity and gas of coming 45-60 days to enable the leather manufacturers for smooth processing of these perishable hides & skins within the humidity climate of the country, otherwise manufacturers would be in great problems in processing of these items.

“This is necessary for processing hides before getting putrefaction which entirely damages the raw hides. The skins, being a perishable item, cannot be stored without processing which requires uninterrupted supply of electricity and gas.