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News Clips 13 May, 2013

[ Business Promotional Board needed for industrial growth: Ijaz ]
[ Development funds: PSDP releases special funds for textile industry ]
[ Bangladesh plans to raise garment worker wages ]
[ India: Textile firms bank on manmade fibre for higher revenue ]

Business Promotional Board needed for industrial growth: Ijaz   [ top ]

BUSINESS RECORDER, Recorder Report, May 10, 2013
Former Chairman Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) Ijaz A. Khokhar underscored the need of setting up "Business Promotional Board at Sialkot" for finding out the ways and means for the growth of different industrial sectors including sports goods, surgical instruments, hand-made badges, leather garments, musical instruments, gloves and sports wears sectors of Sialkot.

In an interview with Business Recorder here on Thursday he said the establishment of business promotional boards will help resolving the problems and supportive in opening of new vistas of industrial development in the area and same programmes should be replicated in other areas of the country after assessing the success of business promotional board of Sialkot.

Sialkot which is export-oriented city and hub of cottage industry of the country has totally been ignored in the past as a result of which industrial growth has become stagnant while exporters' community is facing multiple problems, he said. Ijaz suggested that Federal Government should concentrate on establishing "Regional Task Forces" for the promotion of different industrial sectors and bringing the industry out of crises.

These task forces should be established by Federal Government by taking on board the private sector stakeholders of the respective industries, he said. Ijaz said these task forces must be fully empowered and adequately funded to carry out their functions adding that prime responsibilities will include preparing development plans for their industries focusing marketing, human resources development access to finance, reduction in cost of doing business and technology up-grading.

The Human Resource development issue needs special emphasis as almost all industries and especially Readymade Garment is facing shortage of middle management. Currently, he said, in the absence of middle management system the industrial sector is confronting with multiple problems and under the circumstances there is a great need of introducing middle management system for ensuring smooth growth of industrial sector of the country.

Ijaz revealed that Pakistan Readymade Garment Technical Training Institute would be established at Sialkot costing Rs 13.50 crore adding that separate male and female wings would be set up in the proposed institute and training would be imparted in the field of middle management, stitching and other related fields of garment industry. The proposed institute will be an addition to Sialkot which will help in mitigating the problems of the local garment industry, he said. At present total export of garment is US 4 billion dollars whereas the share of Sialkot is US 250 dollars annually he disclosed. Despite various problems like electricity and gas load shedding, he said business community engaged with garment industry is making hectic efforts to enhance export volume.

Development funds: PSDP releases special funds for textile industry   [ top ]

ISLAMABAD: The government has so far released Rs158.9 million for five major projects of the Textile Industry Division under its Public Sector Development Programme (PSDP), official sources said Friday.

The total cost of all these projects has been estimated at Rs2.081 billion, out of which Rs227 million will be released during the ongoing year (2012-13). Giving the break up of the cost, the source said that an amount of Rs64.4million has been released for Faisalabad Garment City Project and Rs62.3 million for Lahore Garment City Company. The total cost of Faisalabad Garment City project and Lahore Garment City Company has been projected at Rs498.8 million and Rs586.8 million respectively, of which Rs92 million and Rs89 million would be released during the current fiscal year.

The government also released Rs14.7 million for the Pak-Korean Garments Technology Training Institute Karachi, the source said adding that the total cost of this project is Rs300 million, out of whichRs21 million would be released this year. Similarly, out of Rs15 million allocated for Extension in Export Development Plan Implementation Unit during current year, the government released Rs10.5 million so far. The total cost of this project is Rs59.2 million. The government also released Rs7 million for Providing and Laying of Dedicated 48 inch Diameter mild Steel Water Pipeline for Textile City Karachi. The total cost of this project is Rs636.6 million, of whichRs10 million have been earmarked in fiscal year 2012-13, the sources added.

The sources said that the Planning Commission of Pakistan has so far released Rs170.3 billion for all development projects under PSDP against the total allocations of Rs233 billion for the fiscal year 2012-13. An amount of Rs86.2 billion has been released for 347 infrastructure development projects and Rs78.2 billion for 715 social sector projects. Similarly, Rs1.9 billion has been released for 77 other projects and Rs4 billion for the Earthquake Reconstruction and Rehabilitation Authority. The total size of the PSDP budget for year 2012-13 is Rs360 billion, including Rs100 billion foreign aid component, which is managed by Economic Affairs Division and Rs27 billion special programmes, release of which are made by the Cabinet Division or the Finance Division.

Bangladesh plans to raise garment worker wages   [ top ]

The Associated Press, May 12, 2013
Bangladesh's government plans to raise the minimum wage for garment workers after the deaths of more than 1,100 people in the collapse of a factory building focused attention on the textile industry's dismal pay and hazardous working conditions.

A new minimum wage board will issue recommendations for pay raises within three months, Textiles Minister Abdul Latif Siddiky said Sunday. The Cabinet will then decide whether to accept those proposals.

The wage board will include representatives of factory owners, workers and the government, he said.

The April 24 building collapse was one of the world's worst industrial disasters and has raised alarm about conditions in Bangladesh's powerful textile industry that supplies retailers globally.

Working conditions in the US $20 billion industry are grim, a result of government corruption, desperation for jobs, and industry indifference. Minimum wages for garment workers were last raised by 80 per cent to 3,000 takas ($38) a month in 2010 following protests by workers.

Rescue workers said 1,125 bodies had been recovered by late Sunday from the ruins of the fallen Rana Plaza building, which housed five garment factories employing thousands of workers. Teams were using hydraulic cranes, bulldozers, shovels and iron cutters to uncover bodies more than two weeks after the eight-story building collapsed.

"We are still removing the rubble very carefully as dead bodies are still coming up," said Maj. Moazzem Hossain, a rescue team leader.

Hossain said they are trying to identify badly decomposed bodies by their identity cards. "If we get the ID cards with the bodies then we are lucky," he said.

On Friday, the search teams received a much-needed morale boost when they found a seamstress who survived under the rubble for 17 days on dried food and bottled and rain water.

More than 2,500 survivors were rescued soon after the collapse, but until 19-year-old Reshma Begum was found the crews had gone nearly two weeks without discovering anyone alive.

Doctors said she was improving after treatment for dehydration, insomnia, stress and weakness.

The Rana Plaza owner and eight other people, including garment factory owners, have been detained in the collapse investigation. Authorities say the building owner added floors to the structure illegally and allowed the factories to install heavy equipment that the building was not designed to support.

The Textiles Ministry has also begun a series of factory inspections and has ordered about 22 closed temporarily for violating safety and working standards.

India: Textile firms bank on manmade fibre for higher revenue   [ top ]

BUSINESS STANDARD, Sharleen D'souza, May 8, 2013
Textile manufacturer Alok Industries plans to increase focus on polyester in FY14. In the current financial year, the company expects to have 41 per cent of the company's revenue from manmade fibre, up from 38 per cent in FY13. In FY12, this was 35 per cent and revenues from cotton has fallen to that extent.

Alok is not the only company which is increasing focus on the manmade fibre business. In fact, there is a systematic shift happening from cotton to manmade fibres.

Production of manmade textiles has gone up over the past few years. The demand is expected to go up further over the next few years, thanks to rising demand from home textiles, technical textiles and apparel.

"Demand for home textiles and technical textiles is on the rise and hence, the demand for manmade fibre will go up in the coming years; also, demand for blended cotton fabrics is on the rise, which in turn is increasing the demand for synthetic fibre," said Dilip Jiwrajka, managing director of Alok Industries.

Spotting the trend, rating agency CARE Research has said there is a shift towards increasing use of manmade fibre in textiles. Care said, "With increase in disposable income, growing numbers of consumers, rising urbanisation, increasing retail penetration and increased usage of plastic money, manmade fibre is expected to grow at 5.2 per cent CAGR during the FY12-16."

The rating agency added that globally, use of manmade fibre is around 65 per cent. In India, the share of cotton is 66 per cent expected to fall in the coming quarters in favour of polyester.

In FY13, cotton use increased due to lower prices and higher prices of raw material for polyester fibre. Prices of purified terephthalic acid and monoethylene glycol, the raw materials used in manmade fibre - were up two to five per cent.

In the last financial year (FY13), demand for manmade fibre was down seven per cent from the previous financial year. This is due to the fact that cotton was available at cheaper rates and also the slowdown in the economy, as well as weak industrial production.

However, the demand for manmade fibre seems to be picking up. In some segments, the trend is visible. For example, in FY08, viscose staple fibre production was 279.9 tonnes, which moved up to 829.7 tonnes in FY12, almost a 200 per cent jump. Exports also saw a rise from 26.4 tonnes in FY08 to 78.6 tonnes in FY12, which is again a jump of nearly 200 per cent.

CARE's observation is important because in the recent past, crude oil prices have fallen and its derivatives and raw material for manmade fibre have also started falling. With crude oil prices expected to remain subdued in the coming months, price of raw materials is also expected to remain low. Against this, the International Cotton Advisory Committee has projected a fall in cotton planting globally and a rise in cotton prices.

According to the Comm-ittee, an estimated 34.1 million hectares of cotton are being harvested in 2012-13 (July-June), five per cent below the previous season, and another five per cent drop to 32.2 million hectares is forecast in 2013-14.

"Global cotton production is estimated down five per cent from 27.8 million tonnes to 26.3 million tonnes this season, and world production is forecast to drop another six per cent to 24.6 million tonnes during 2013-14," it said.

The Committee also projected an increase in cotton prices. It said, "The Cotlook A Index (representing global cotton prices) is projected to average 88 cents and 122 cents per pound in 2012-13 and 2013-14, respectively."