The textile sector is the back bone of the Pakistans Economy. It is the largest industry in the country.

. Pakistan currently ranks fourth among world cotton producers and third among world cotton consumers

EXPORTS: 62.1% OF TOTAL EXPORTS (US $ 10.211 BILLION) MANUFACTURING: 46% OF TOTAL MANUFACTURING EMPLOYMENT: 38% OF TOTAL LABOUR FORCE GDP: 8.5% OF TOTAL GDP INVESTMENT: US $ 0.771 BILLION MARKET CAPITALIZATION: 5.11% OF TOTAL MARKET CAPITALIZATION CONTRIBUTION TO R&D: RS. 263 MILLION PER ANNUM

The growth of the textile industry in Pakistan has followed the macro economic situation of the country over the years.
INSTALLED CAPACITY (in 000) WORKING CAPACITY (in 000)
Spindl es 7440 Growt h% 7.62 Roto rs 66 Growt h% -5.71 Loom s 5 Growt h% 25.00 Unit s Spin dles
9060

Period
2001-02

Growt h%

Roto rs

Growt h%

Looms

Growt h%
0

450

5.34 2.21 3.59 9.31 0.46 0.74

141 148 146 155 155 150

-3.42

10

2002-03

453 456

9260

4.96 -1.35

10 10

7676 8009

3.17 4.34

70 66

6.06 -5.71

5 4

0 -20.00

200304 200405 200506 200607

9592

458

1048 5 1043 7 1051 4

6.16

-10.00

8492

6.08

79

19.70

461

0.00

-11.11

9415

10.87

77

-2.53

461

-3.23

0.00

7989

-15.15

70

-9.09

-25.00

At Present, the industry consists of large-scale organized

sector and a highly fragmented cottage / small-scale sector.

LARGE-SCALE MILL SECTOR:

Sub Sector 1. Spinning 2. Composite Units Total No. Of Units 403 50 453 Size 9.2 million spindles 9,876 Looms Production 1550 M. Kgs. 384 M. Sq. meter

3. Independent Weaving Units 4. Finishing Units 5. Garments Units

124 10 50

23,600 shuttle-less looms

5,000 Sewing machines

COTTAGE/SMALL-SCALE SECTOR:
No. Of Units 453 20,600 21053 625 400 2,500

Sub Sector 1. Independent Weaving Units 2. Power Looms Total 3. Finishing 4. Terry Towels 5. Garments

Size

Production

50,000 Looms 175,200 Looms 225,200 Cotton 7,602 Looms 300,000 Sewing machines 12,000 Knitting machines

3600 M. Sq. meter

2700 M. Sq. meter 53 M. Kgs. 600 M. Pcs.

6. Knitwear

600

400 M. PCs.

 Cotton is a natural fiber used primarily as a raw material in

textile industry.

Being a major crop, Cotton is an economic asset of Pakistan. Both Punjab and Sind are the major cotton growing provinces and their share in total cotton production is estimated at 76% and 23% respectively

The major cotton producing countries in the world include China, India, Pakistan, USA and the European Union besides the central Asian and African states

Cotton, Area, Production And Yield Area Production Yield Year (000 % (000 % (Kgs/Hec) % Hectare) Change Bales) Change Change
200203 200304 200405 200506 (P) 2794 2989 3193 3096 -10.3 7.0 6.8 -3.0 10211 10048 14265 12417 -3.8 -1.6 42.0 -13.0 622 572 760 682 7.4 -8.0 32.9 -10.3

Pakistan's cotton is regarded as the best among varieties of cottons of similar staples grown elsewhere in the world. Pakistan's textile industry enjoys several advantages over those of many other countries as far as the production of quality fabrics and yarn is concerned and is a world leader in the export of cotton yarn, including coarse, medium and fine varieties. Pakistan's leading buyers are Japan, Republic of Korea and Hong Kong.

PRODUCTION, EXPORTS & DOMESTIC REQUIREMENT OF YARN Fig: in '000' Kgs

PERIOD PRODUCTION CONSUMED IN MILL SECTOR QUANTITY 68,275 77,328 79,435 93,141 105,362 95,710 104,423 % OF PROD. 3.95 4.25 4.13 4.80 4.60 4.32 3.83 EXPORTS QUANTITY 545,134 539,500 525,130 514,279 520,782 691,492 699,259 % OF PROD. 31.59 29.67 27.28 26.52 22.74 31.20 25.64 AVAILABLE FOR LOCAL MARKET QUANTITY 1,115,720 1,201,517 1,320,369 1,331,487 1,664,196 1,429,403 1,923,874 % OF PROD. 64.52 66.08 68.59 68.67 72.66 64.49 70.53

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

1,729,129 1,818,345 1,924,936 1,938,908 2,290,340 2,216,605 2,727,566

The growing demand for blended yarn and fabrics has shifted the raw-material source towards the Man-Made or Synthetic Fiber in Pakistan.

The MMF industry in Pakistan has gradually developed during the last decade but still Pakistan usage is currently at 74% cotton and 26% manmade fibers

CONSUMPTION OF RAW MATERIAL (PAKISTAN) (Fig. in '000' Kgs) RAW MATERIAL GROWTH % Period 1997-98 1998-99 1999-00 200001 2001-02 200203 200304 200405 200506 200607 Cotton 1,471,169 1,441,923 1,566,348 1,673,280 1,755,669 1,943,197 1,938,678 2,099,380 2,407,560 2,563,510 Fiber 318,923 407,686 404,008 405,038 409,557 449,424 468,984 488,804 525,000 580,000 Total 1,790,092 1,849,609 1,970,356 2,078,318 2,165,226 2,392,621 2,407,662 2,588,184 2,932,560 3,143,510 % OF TOTAL Fiber 18 22 21 19 19 19 19 19 18 18

Cotton Fiber Cotton 2 -2 9 7 5 11 0 8 15 6 35 28 -1 0 1 10 4 4 7 10 82 78 79 81 81 81 81 81 82 82

The first mechanical process involved in the processing of cotton is ginning. Ginning is the process for separating lint from seed to cotton. This component of local textile industry is the most neglected and antiquated.

Spinning is the process of converting fibers into yarn. If spinning industry produces substandard yarn, its effect goes right across the entire value chain. Pakistan is the third largest player in Asia with a spinning capacity of 5% of the total world and 7.6% of the capacity in Asia.

The exports of woven fabrics and other related woven madeups form a major portion of textile exports from Pakistan. There are three different sub-sectors in weaving i.e., Integrated, independent Weaving Units, and Power Loom Units.
Installed and Capacity Worked in Weaving Sector Category Installed Effective/ Capacity Capacity Worked (a) Integrated Textile Units 9050 4350 (b) Independent Weaving 27500 27000 Units (c) Power Loom Sector 295442 285442 Total 331992 316792 Source: Textile Commissioner Organization

Integrated Textile Mills: These are composite

units with spinning and weaving operation at one premise. There are about 50 integrated textile units with an installed capacity of about 9,050 looms.

Independent Weaving Units: The

entrepreneurs are establishing independent weaving units with shuttle-less looms. These looms are both second-hand and new ones and employ the modern technology of Rapier, Projectile and Air jet looms

Power Loom Sector: The Power Loom Sector has

modernized and registered a phenomenal growth over the last two decades. This sector is producing comparatively low value added Grey Cloth of mostly inferior quality.

Ready Made Garments Hosiery and Knitwear Bed wear Cotton Fabrics Soft/Stuffed Toys Cotton Bags Terry Towel Cotton Yarn

STRENGTHS:

Pakistan is the fourth largest producer of cotton yarn and cloth in the world. Pakistans share in the world yarn trade is about 30% and the share in cloth is 8%. This describes its competitive position in international market and future potentials for improvements & growth. There is ample availability of cheap labor in Pakistan. It has large well-equipped finishing sector with recent wider width capacity. The cotton trade in Pakistan is free which is a major benefit to the spinning sector.

WEAKNESSES:

Although labour is available and labour costs are amongst the lowest in the world, the benefit is being wasted through operational inefficiency. Proper training is necessary to develop skill, required to have desired production efficiency. Pakistan textile industry is facing problem of Low productivity due to its obsolete textile machineries The factor of high power cost, high interest cost and high cost of inputs like Gas and Water are not accounted for rebates to facilitate industry Non-availability of good quality soft water for the textile industry. Inadequate and unreliable power supply, a major constraint, is getting worse and causing poor competitive rating.

OPPURTUNITIES: The Global opportunity is tremendous which requires the Textile Industry in Pakistan to provide competitive and quality products to the Global Markets. According to the Pakistan Ministry of Textiles, an export target of 13 billion USD has been fixed for the year 2007-08. Hence, the textile units in Pakistan have an opportunity to expand their scope. The demand for textiles, which is presently around US $ 19trillion per annum is growing globally at an average rate of 2.5%.

THREATS:

The Pakistan textile industry is facing tough competition from the Indian, Bangladeshi and Chinese textile industries. Our trained professionals are going to Bangladesh and Russia to run their factories. There is also the need for greater value addition in its products. The NON-AVAILABILTY of compatible market access to our Textile Manufacturers. The collapsing infrastructure on which the Governments does not seem to be paying attention is KILLING the Textile Industry slowly but surely.

COUNTRY China

STRENGTHS WEAKNESSES -Worlds largest Textile Economy. -Large obsolete production capacities in the -The largest exporter of textiles & clothing (worth US cotton sector. $ 62 billion in 2002). -Low value addition. -This accounts for 17% of world trade (Textiles = 13%; Clothing = 20%). -Worlds largest producer of Cotton. -Worlds largest producer of Synthetic fibres. -Textile sector generates 10% of its GDP; and 20% of its merchandise output. -Relatively low labour costs. -One of the worlds largest exporters of ready made garments ( exports of US $ 5 billion pa). -Significant presence in US markets, due to a large quota. -Also enjoys quota free , and duty free access to Australia ; Canada and Norway. -Its status as a least developed country (LDC) will give it favourable market access in the post quota era (01/01/2005); with preferred facility for EU markets. -Has mastered the garment trade and has low cost / high productivity in that sector. -Raw material base; no indigenous cotton production; and relies heavily on imported yarns and fibers. -Inadequate infrastructure. -Leads to congestion and delays at ports. Inadequate communications network. -Uncompetitive and unreliable power supply leads to production delays and elevated costs.

Bangladesh

Sri Lanka

-Textile and Apparel Industry has crucial part of countrys economy. -It is the countrys biggest employer in manufacturing; and number 1 export earner. -In 2001 it accounted for 69% of the countrys industrial exports and 53% of its total exports. -Relatively secure markets in with USA; EU and Canada through bilateral agreements.

-Small domestic fabric base. Relies heavily on yarn and fabric imports. -Industry is seeing decline in competitiveness due to its heavy reliance on quota categories, concentration on a few markets, inability to develop new markets or major purchasers because of direct marketing contacts. -Relatively small domestic market, little cash generation to support investment in developing export markets. -Indian textile industry is led by small scale companies. Smaller companies do not have the fiscal resources to enhance technology or invest in the high-end engineering of processes. -India seriously lacks in trade pact memberships, which leads to restricted access to the other major markets.

India

-India has been producing record crops every season and in 2007-2008 season its production is estimated around 31.0 million 170-kg bales the best crop in 60 years. -In comparison with Pakistan, India improved its yield by 117 percent in 8 years -India has the largest area under cotton in the world around 9.0 million hectares, is the second largest in world production, second largest in raw cotton exports and the second largest in raw cotton consumption in the world

Pakistan is exporting around US $ 10 billion of textile goods each year . The exports of composed of both basic textile products such as yarn and value added exports including made-ups.

EXPORTS DESTINATION:
In terms of export destination, Pakistan is heavily dependent on European countries, USA and the Middle East. In addition to clothes Pakistan also exports cotton yarn and basic textiles to East Asian countries.

KNITWEAR
UNITS 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 Quantit y 000D oz. 39,384 36,000 52,133 66,379 71,392 78,645 93,357

COMMODITIES

Hoseiry & KnitWear

Value Value

000$
$/Do z

910,398
23.11

841,546
23.38

1,146,674
22.00

1,458,736
21.98

1,635,033
22.90

1,751,494
22.27

1,961,048
21.01

READY MADE GARMENTS

UNITS 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

COMMODITIES

Readymade Garments

Quantit y Value Value

000 Doz . 000 $ $/D oz.

35,860

42,354

36,457

27,592

34,194

37,475

40,812

827,510 23.07

882,035 20.83

1,092,60 7 29.97

993,32 2 36.00

1,087,954 31.82

1,309,990 34.96

1,384,775 33.93

TOWELS
COMMODITIES UNITS 200001 67,460 243,025 3.60 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

Towels

Quantity Value Value

Tons 000$ $/KG.

79,526 269,823 3.39

100,586 374,839 3.73

101,806 403,500 3.96

139,168 520,480 3.74

158,778 587,641 3.70

159,471 602,547 3.78

BED WEAR
UNITS Qua ntity Valu e Valu e To ns 00 0$ $/ K G. 200001 147,93 3 734,91 9 4.97 200102 181,62 7 918,50 5 200203 241,88 6 1,329, 064 200304 244,20 7 1,383,3 34 2004-05 264,442 1,449,53 3 200506 365,.23 7 2,038,0 64 200607 365,23 2 1,995,8 99

COMMODITIE S Bed Wear

5.06

5.49

5.66

5.57

5.58

5.46

Maximum efforts should be mobilized to increase the production of raw cotton with regards to increase in yield per acre and fiber quality. Ginning research institution should be established to support ginning industry. Availability of uninterrupted gas and economical power and soft water for the textile industry should be provided on war footing. The Government should encourage and provide incentives to the Engineering Industry to bring in foreign investment and know-how to manufacture quality Textile machinery locally.

Labour training institutes, poly techniques and universities with minimal or no charges and scholarships and stipends should be established across the country by the Government in collaboration with the private sector, philanthropists and overseas educationl grants. Import of machinery older than 10 years should be banned. Promote air jet weaving machinery for cotton and blended fabric. Upgrade smaller units of power looms to auto looms. Priority should be given to stitching industry sector that leads to high value addition and incentives for labour training to increase productivity and improve quality should be made available.

Efforts on part of the Government should me made to provide market access for our manufacturers and the benefits enjoyed by our competitors in overseas markets should be made available for our local textile industry. Incentives should be provided by the Government to find new markets across the Globe for our textile products. Mark-up on loans for the Textile Industry should be reduced.