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Pakistan must invest in entire value chain of textile sector


9/12/2018
LAHORE - The significance of textile sector in Pakistan’s economy can hardly be debated. Punjab Board of Investment & Trade (PBIT) convened a roundtable, bringing together notable textile sector stakeholders including prominent members from APTMA.
 
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In terms of strategy towards the sector, Punjab should place special emphasis on attracting and growing the value-added garment industry in Punjab. It is a relatively low-energy consuming industry, and has an immense job-creation potential. In this regard, exploring linkages with China, especially with industry on China’s west coast that is closer to Pakistan in terms of physical distance, in the form of contract manufacturing of garments could be an interesting avenue to explore. This strategy could be very important given the context of rising domestic consumption in China. The government of Punjab may work with the large textile players in the country to implement this strategy through its Special Economic Zones, such as Quaid-e-Azam Apparel park (QAAP).
 
There are certain urgent issues that must be addressed urgently. Specifically the issue of energy price differentials between the provinces and rebates that the government owes to the industry must be given top priority. It must be emphasized that textile sector is the largest employer of industrial labor in the country and accounts for over 60% of the exports of Pakistan. In the backdrop of a competitive regional landscape, with countries like Bangladesh and Vietnam having emerged as sizable players on the global stage, Pakistan must defend and invest in the entire value chain of the textile sector on a priority basis, including innovative solutions for enhancing cotton yields. Backward linkages whereby large industrial players integrate into corporate farming for cotton could be a potential model to explore in this regard.
 
Another key area of focus must be to check undocumented import of textile/apparel products from China. Undocumented or under-valued import of such products distorts the local market dynamics making it impossible for local players across the whole value-chain to compete.
 
Participants at the roundtable emphasized that the industry needs to see credible commitment and follow-up from federal and provincial governments, and reassured that they are willing to make further investments if they receive the right governmental support, including simplification of cumbersome processes and procedures through effective one-window facilitation.
 
Source: The Nation