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8/10/2019 Dr Noor Textile Machinary Imports Issues and Challenges
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42 PTJ August 2011
Pakistan textile industry is by far the most important sector of
the economy contributing 63% to export earnings and engaging38% of labour force. At present Pakistan has the third largest spin-
ning capacity in Asia a fter China and India. The ent ire value cha in
represents production of cotton, ginning, spinning, weaving,
dyeing, printing and finally garments manufacturing. Pakistan has
emerged as one of the major cotton textile product suppliers in the
world with a market share of about 28% in world yarn trade and
8% in cott on cloth. The va lue addition in the t extile sector accounts
for over 9% of GDP and its weigh-age in the quantum index of
large-scale manufacturing is 20%.
The spinning sector had g rown w ith ya rn export and grow th in
cotton production, followed by logical growth in weaving and pro-
cessing sector due to value ad dition. The ma jor concentrat ion o f
industry is in Karachi, Hyderabad, Multan, Lahore and Faisalabad.Unlike spinning secto r the weaving sector comprises of large
number of small power loom units, mainly clustering in Faisalabad,
Hafizabad, Kasur and Multan. Recent trend is to set up Air-Jet loom
either as independent units a re integ rating it w ith spinning or pro-
cessing industries.
Thoug h textile industry ma intains its ranking of the single largest
manufa cturing sector in Pa kistan, unfortunately indigenous manu-
facturing o f its machinery could not develop along w ith the g rowth
of t extile indust ry. Therefore, demand fo r textile machinery still is
almost entirely met through global imports.
The usual and most ef fect ive channel for sale of ma chinery,
equipment and spares is through a reliable agent. Foreign firms
appoint local agents for the Pakistan to provide them with market
intelligence and to fo llow -up on sales. The most popular and possi-
bly the most effective distributorship arrangement in Pakistan is the
exclusive agency a greement . The exclusive agent receives commis-
sion on all sales of the product within the country, regardless of the
channels through w hich they w ere ordered. The ag ent of ten
imports and stocks spare parts inventory, that are regularly required
by textile mills. The a gency ma y a lso provide a fter-sales service.
Pakistan has been a major Asian market for major textile machinery
manufacturing nations. China Japan, Italy, Germany and
Switzerland have b een among top exporter of textile machinery to
Pakistan.
Investment
Textile Industry ha s mad e an investment o f a bout US$ 7.5 bil-
lion during the last eleven years. The to ta l investment to be
divided in various sub sector, indicates that 50.2% in spinning
sector, followed by 17.8% in textile processing, 15.23% in weav-
ing, while the investment and other sectors namely like knitwear,
made ups and synthetic textile at respective rate of 7.02%,
4.71% and 5.76%. This investm ent includes bot h investment
through b ank loan a s w ell as o w n sources. This investment has
been ma de in the fo rm of Balancing Modernizat ion Replacement
(BMR) expansion and new capacity.
Import of machinery
Text ile ma chinery impo rts jumpe d to $297 million in the
financial year 2009-10 from $211 million in the previous financial,
registering a g rowt h of 41%. G rowt h in the textile ma chinery is
an encouraging sign, w hich has remained in the g rip of uncerta in
and gloomy conditions for the last few years.
During the past four years textile machinery imports
decreased hea vily w hen textile industrialists ha lted ma king invest-
ments in their units due to falling export of textile goods.
During the year 2009-10 sector wise textile machinery
imports in Pakistan show s tha t spinning sector share 34.37%,
w eaving 23,90%, knitting 19.33% finishing 20.57% and remain-
ing 1.83% share by ot hers machines. Sector -w ise textile
ma chinery imports in Pa kista n is g iven in Table-1.
Pakistan as major Asian market for textile machinerymanufacturing nationsby Dr. Noor Ahmed Memon.
Spinning
50.20%Weaving
15.23%
made up
4.71%
Synthetic
Textiles
5.76%
Knitw ear and
garments
7.02%
Textile
Processing
17.08%
Investment in textile industry (sector-wise)
(US$ 7.5 billion)
Import of Textile Machinery in Pakistan
Source: Federal Bureau of Stat istics, Government of P akista n.
US$Million
406.9
531.9
598.0
928.6
771.0
503.0
438.3
212.0
Table 1Sector-wise imports of textile machinery in Pakistan
(Value in $ 000)
Sector2008-09 2009-10
Value % Share Value % Share
Spinning 88,406.45 42.17% 101,296.87 34.37%
Weaving 46,363.53 22.12% 70,442.17 23.90%
Knitting 32.835.72 15.66% 56,958.46 19.33%
Finishing 35,975.72 17.16% 60,615.62 20.57%
Others 8,850.44 2.89% 5,392.89 1.83%
Total 212,431.86 100.00% 294,706.01 100.00%
Source: Federal Bureau of Stat istics, Government of P akista n.
294.7
456.1
2010
-11
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PTJ August 2011 43
Spinning sector: At present, it is comprised of 521 textileunits (50 composite units and 471 spinning units) with 10.1
million spindles and 114 thousand rotors in operation with
capacity utilization of 89% and 60% respectively, during the
yea r 2010-11. The cot ton spinning secto r ha s performed
slightly better than other sub-sectors during the year 2010-11.
This can b e a ttributed to market demand and response, ea sing
of raw materials through local supply and imports, diversifica-
tion to blends and incentives granted by the Government
under the support pa ckag es.
Spinning is the first process in the cotto n va lue cha in th at
add s value to cotton by converting it into a new product, i.e.
from ginned cotton into cot ton ya rn. The process of ya rn man-
ufacturing of continuous lengt h from different types of fibers
(e.g: cotton, wool, polyester, viscose etc.) is known as textile
spinning.
The spinning is the m ost importa nt a nd t he initial step in
fa bric manufa cturing . The ma jor and main goa ls of spinning is
to produce the q uality ya rn from raw material, then remove the
process faults af terwa rds, w ind t he short lengt h bobb ins on big
packages (Cones) according to the ma rket/customer demand.There are d ifferent ty pes of spinning, t he mo st commo nly
forms of spinning commercially available are:
Ring spinning,
Rotor spinning,
Air Jet spinning,
Friction spinning etc.
Roving is an important process in the conversion of fibers
into ya rn by the rising spinning system. How ever, it is no longer
an indispensable process because of the development of ring
spinning ma chines, w hich produce ya rn straight from the fin-
ished draw frame silver. Nevertheless, most, if not all, of the
spinning m ills in Pa kistan, o perating ring spinning f rames, spin
yarn from roving produced on roving frames, rotors areinsta lled and nea rly 10.85 million spindles and 118 rotors a re in
operation.
Import of textile spinning machines and parts increased
from US $ 88 million in 2008-09 to US $ 101 million in 2009-
10, thus showing increased of 15%. Import of textile spinning
machines and parts is given in Table-2
Table 2Import of textile spinning machines and parts
(Value in $ 000)
Countries2008-09 2009-10
Value % Share Value % ShareChina 20,047.13 22.68% 23,068.82 22.77%
Japan 16,605.68 18.78% 19,805.18 19.55%
Germany 16,699.92 18.89% 18,451.69 18.22%
Sw itzerla nd 16,077.02 18.19% 15,106.75 14.91%
Italy 5,730.16 6.48% 10,241.02 10.11%
U.S.A 2,287.95 2.59% 3,171.37 3.13%
India 2,063.64 2.33% 3,069.66 3.03%
Spain 1,399.89 1.58% 1,282,12 1.27%
Korea 1,066.93 1.21% 1,077.42 1.06%
UK 822.73 0.93% 980.31 0.97%
Total 88,406.45 100.00% 101,296.87 100.00%
Source: Federal Bureau of Statistics, Government of Pakistan.
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Weaving sector: The pa ttern of cloth prod uction is differenttha n spinning sector a nd t here are three different sub-sectors in
weaving industry: Integrated, Independent Weaving Units and
Pow er Loom Units. Investment in the shutt le-less looms both in
integ rated a nd independent w eaving sector has increased g radu-
ally and this trend is likely t o intensify f urther.
The pow er loom sector have mo dernized a nd registered a
phenomena l grow th over the last tw o deca des. This grow th in
power loom sector is due to favorable government policies as well
as m arket fo rces. This sector is producing compa ratively low value
ad ded grey cloth most ly of inferior quality. Te ma in issues andproblems of the power loom sector revolve mainly around the
poor technology, scarcity o f q uality y arn a nd lack of institutional
financing for its development from unorganized sector to an
organized one.
The progress of the pow er loom sector is due t o fa vorable
go vernment policies as w ell as m arket f orces. This sector is pro-
ducing comparatively low value add ed g rey cloth in unorganized
sector. The g rowt h record of Pa kistan' s textile industry show s a
reverse trend, especially in the w eaving capa city o f the mill sector,
in w hich the installed ca pacity o f looms shrunk from 26,000 in
1978-79 to only 8,000 in 2009-2010, the w orking looms w ere
reported to be only 4,000. Thus, the orga nized sector seemingly
made an all-out shift towards cotton spinning and almost com-
pletely gave up efforts to develop and modernize the weaving
sector.
During the pa st five yea rs, new installat ions of shuttle-less
machines has resulted in high growth in fabric production and
exports. At present, the shuttle-less weaving industry is largest
consumer of cotton ya rn in Pa kistan. The qua lity improvement in
fabric production is directly related to the up gradation of tech-
nology in w eaving a nd spinning sectors.
Import o f textile w eaving ma chines and parts increased from
US $46.36 million in 2008-09 to US $ 70.44 million in 2009-10,
thus showing an increase of 52%. Import of textile weaving
machines and parts into Pa kistan is given in Tab le-3.
Knitting sector: Knitting is second most frequently usedmethod of fa bric construction. The popularity of knitted fab rics
has g rown in the recent yea rs, beca use of t he increased versat ility
of techniques, the adaptability of many new man-made fibers
and the growth in the consumer demand for wrinkle resistant,
stretchable, snug fitted ga rments, particularly in g reatly expand-
ing a reas of sports w ear and other casual wea r-segment s.
At present there are about 12,000 knitting machines in
Pa kista n. The capacity ut ilization is approx.. 70%, out of t his pro-
duction, 60% comprises o f jersey, knitted fa brics, T-shirts, sw ea t
shirts, po lo shirts, jog ging suits, a nd t rack suits and children out er
wear.
The knitw ea r industry has evo lved considerab ly during t he
past few decad es and now different technologies are available for
producing good quality products to compete internationally.
Technological ad vancement s have brought a utoma tion and
Computer Aided designing and also ma nufact uring. The use of
modern consoles such as display panels on the machine, digital
control systems, centra lized lubricat ion systems, threa d break stop
motions are few of the common features available nowadays.
This helps in better interaction bet w een the man and machine
along w ith t he efficiency a nd q uality improvement.
The ma chinery used in the knitt ing sect or, especially for circu-
lar and flat is largely imported from China, Japan, Korea,
Switzerland , G ermany a nd Ita ly. Due to low -investment involve-
ment this industry is very easy to install, as some of the machines
and parts are also manufactured locally. It is also true that this
industry is highly labo ur-intensive. This indust ry a lso does no t
creat e a ny pollution problem or health ha zards. In fact it is one o f
the neatest and cleanest industry by every environmental and
health standards.
Pakistan imported mainly automatic flat and circular knitting
machines of d ifferent brands. Import of various types of knitting
machines in Pakistan increased from US $32.83 million in 2008-
09 to US $56.96 million in 2009-2010, thus showing an increase
of 73%. Import of knitting m achines and parts in Pakistan is given
in Table 4.
Finishing sector:Most of printing and processing units work-
ing on Hi-Tec ma chines are ow ned by b ig industrial and co mmer-
cial cartels. There are mo re tha n 700 independ ent processing
units w orking in and around Faisalabad , G ujranw ala a nd Karachi,of w hich 70 integra ted units have complete f inishing fa cilities, i.e.
bleaching, mercerizing, dyeing, calendaring a nd printing a s w ell
as hea t setting a nd embossing and dry finishing o f fa brics.
44 PTJ August 2011
Table 4Import of knitting machines and parts
(Values in $ 000)
Countries2008-09 2009-10
Value % Share Value % Share
China 15,074.14 45.91% 34,935.39 61.33%
Japan 8,242.68 25.10% 10,109.60 17.75%
Korea 2,840.13 8.65% 4,501.63 7.90%
Sw itzerland 1,332.42 4.06% 1,757.02 3.08%
Germany 1,412.29 4.30% 1,565.53 2.75%
Italy 1,579.15 4.81% 1,076.08 1.89%
USA 1,228.95 3.74% 710.55 1.25%
O ther Asian Countries 248.95 0.76% 665.11 1.17%
France 0.00 0.00% 464.82 0.82%
UK 431.44 1.31% 288.50 0.52%
Total 32,835.72 100.00% 56,958.46 100.00%
Source: Federal Bureau of Statistics, Government of Pakistan.
Table 3Import of textile weaving machines and parts
(Value in $ 000)
Countries2008-09 2009-10
Value % Share Value % Share
Sw itzerland 6,950.72 14.99% 15,394.74 21.85%
Japan 10,355.04 22.33% 15,260.93 21.66%
Belgium 8,385.61 18.09% 14,527.39 20.62%
China 4,343.90 9.37% 8,294.10 11.77%
Germany 4,531.09 9.77% 6,801.15 9.65%
Italy 3,007.18 6.49% 3,863.17 5.48%
India 2,608.18 5.63% 891.70 1.27%
USA 930.25 2.01% 746.69 1.06%
Korea 655.47 1.41% 691.42 0.98%
UAE 238.05 0.51% 566.99 0.80%
Total 46,363.53 100.00% 70,442.17 100.00%
Source: Federal Bureau of Sta tistics, Go vernment of Pa kistan.
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PTJ August 2011 45
These t extile printing a nd processing units have been classi-
fied into three categ ories i.e. A, B and C . The ca teg ory-A inte -
grated units have complete finishing facilities i.e. bleaching
mercerizing, d yeing, calenda ring an d printing. These units from
the pow er loom sector, procure cloth a nd a fter processing they
marked it under own brand names. At times, these units also
provide finishing facilities to the traders on charge basis.
Category-B units directly compete with the products of
integrated units. In terms of quality, design and colour, their
products are in no-way inferior to the products of integrated
mills. Like the integrated mills these units also sell their productsin wholesale market.
Category-C units are those, which do not have complete
finishing fa cilities. These a re eithe r enga g ed in bleaching a nd
dy eing. In com parison w ith Type-A, these units perform mo re
work on contract or job order basis. Besides, they also procure
cloth from the market and after processing the same can
market it under their ow n brand na mes.
Import of textile finishing machines and parts increased
from US $ 35.97 million in 2008-09 to US $ 60.61 million in
2009-10, thus showing an increase of 68%. Import of textile
finishing ma chinery and parts into Pa kista n is given in Tab le 5.
Future trends
The e conomic recovery aft er g loba l recession has already
started and some prominent Asian countries such as China,
India, Malaysia, Indonesia, Pakistan and Bangladesh are head-
ing to w ards recove ry, w hile Western countries like USA a nd
prominent European countries which were hard hit by the
globa l economic recession a re still strugg ling t o come out o f the
recession.
Pakistan has achieved its highest ever exports mark of
$19.3 billion in the financial yea r 2009-10. The co untry h as so
far recorded exports worth $19.3 billion which not only
exceeds the target set for exports in 2009-10 i.e. $18.8 billion.
Pakistans textile exports fetched a lions share of 51.8% in
value terms out of t he to ta l exports for the financial year 2009-
2010 Exports of t extile a nd cloth ing, w hich crossed t he $10 bil-
lion mark, recorded a growth of 7% as compared to the last
year.
Table 5Import of textile finishing machines and parts
Value in $ 000
Countries2008-09 2009-10
Value % Share Value % Share
Italy 7,805.03 21.70% 14,811.16 24.43%
Germany 6,327.58 17.59% 13,835.58 22.83%
China 7,500.17 20.85% 12,052.31 19.88%
USA 3,210.35 8.92% 4,987.26 8.23%
Sw itzerland 2,305.42 6.41% 3,033.82 5.01%
Japan 750.65 2.09% 2,914.91 4.81%
Turkey 1,756.07 4.88% 2,165.64 3.57%
Spain 1,436.16 3.99% 1,294.56 2.14%
O t her Asia n co unt ries 1, 287. 51 3. 58% 1,100. 06 1. 81%
Korea 371.38 1.03% 1,004.90 1.66%
Total 35,975.72 100.00% 60,615.62 100.00%
Source: Federal Bureau of Stat istics, Government of P akista n.
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Increase in the value of exports w as a result o f increase in
the prices only. However, only raw cotton and yarn export w it-
nessed ma jor shift d estination, w hich is a po sitive sign for the
country, w hich relied ma inly on t he trad itiona l ma rkets ove r the
yea rs. The text ile exports recorded a substa ntia l increa se to
existing m arket, b ut a lso sent to ma rkets like Turkey, Portug a l
and Singapore, which broadened the customer base.
According to one Chinese survey, world textile market is of
US $540 billions of w hich China has 27.18% and India only
3.68%. Other small countries like Bangladesh, Pakistan and
Tha ilan d ha ve shares even bigg er than India.
Despite all odds China and India have enough potential to
fight the effects of g loba l recession a nd t heir economies w ould
absorb the shocks at comparatively low cost. Bangladesh,
Tha ilan d, Vietna m, Sri Lan ka a re in the seco nd line in te xtile
exports. Presently, China , India, Pa kistan an d Banglad esh share
abo ut 50% of US imports of cloth a nd te xtiles. China ha s lion
share of over 35%, while India and Pakistan share is small as
compared to China. India and Pakistan have great potential as
both produce large cotton crops and can exploit their resources
to increase their share in textile exports to US.Pakistan w ould have to enlarge its product ba se. Currently,
the global trade is dominated by blended textile products, in
w hich the rat io of ma nmade fiber to cotto n is 80:20. Pakistan's
textile products on average use 80% cotton and 20% man-
made fiber. Besides that, local entrepreneurs have confined
themselves to exploring markets in few countries like the US,
European U nion, Ca nad a and Turkey. In order to a chieve the
textile exports ta rget of $25 billion by 2014, there is need fo r
further diversificat ion bot h in terms of exploring new markets
and adding further value added products.
Pakistan governments decision to withdraw duties on
imported t extile machineries under Nat iona l Textile Strate gy
2009-2014, has proved t o be a big bo ost fo r its text ile industry.After this decision, t he country ha s registered a grow th rat e of
25% in text ile exports. It a lso helped to at tract higher fo reign
investments in the country.
With a large new crop of high-priced cotton on its way,
investors in Pakistan are increasing their ginning capacity by
investing nearly $35 million into the opening of 40 new plants
and expanding the capa city of existing o nes.According to Naseem Usman, a cotton consultant and
Cha irman of the Co tto n Brokers Forum, thirty of t he new ginning
factories have been established in Sindh and the others in Punjab
(15 in the Sangha r district, seven in Mirpurkhas, a nd a tota l of 8
fa ctories in Hydera ba d and Kotri). The four ginning fa cto ries are
ready for operation in Chicha Watani and 4 more in Burewala,
w ith one ea ch in Lay yah, Arifw ala a nd Mianw ali.
A ginning f acto ry removes the seeds from the cotton a nd is the
first step in the value-addition chain subsequent to the harvesting of
the cott on crop. Thus the objective of the $35 million investment is
to support efforts towards higher value-addition of raw cotton
domestically then it stands to reason that if the cotton output has
risen then so w ould the need for more ginning facto ries.The f act ories will help in ha ndling Pa kista ns bumper crop of
cotto n, w hich is estimated to be more tha n 15 million bales this
year. Currently, there are nearly 1,000 ginning factories in the
country: 250 in Sindh and more than 720 in Punjab, with the
others in Balochistan with installed capacity of more than 1.0 mil-
lion ba les on a single shift ba sis and a tota l capa city o f a round 20
million ba les on a three-shift ba sis.
Naseem Usman further said tha t a top commodity company
on t he g lobe Louis Dreyfus of Switzerland has set up an office in
Pakistan with the name of Louis Dreyfus Commodities Pakistan
Pvt Ltd to dea l in cotto n.
Other international trading companies including Cargil
International of Switzerland and Noble Group of Singapore arealso operating through t heir agent s in Pa kistan. One ginning fac-
tory w ith five to six gin saw s can be set up a t a cost of Rs 60 to 70
million.
46 PTJ August 2011
Pakistan invests 35 Million in 40 new
ginning factories