Neglect of Bmr (p5)

8/6/2019 Neglect of Bmr (p5)

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NEGLECT OF BMR

From the Foregoing brief account of the crisis and boom periods through

which the textile industry especially the spinning sector and the ancillary

textile industries passed, it is possible to deduce factors due to which the

mil l owners neglec ted ba lancing , modernisa tion and replacement

programme for their existing units as follows:

Nationali sa t ion policies of the GOP in the Sevent ies, r eckless

expansion of the public sector at the cost of the private sector and

consequent closure of 28% of the installed capaci ty of spindles ,

25% of rotor and large number of looms in the mi11 sector.

Adoption of industr ial fr iendly policies by the GOP, the Eighties,

abolition of the condition of “No Objection Certificates” (NC)C) for

expansion and sett ing up of new texti le units and economic boom in

the inter na tional market. The mill own ers co ncentrated on expansion

of the existing units and installation of new units apprehending that the

condi tion of NOC may be re imposed again by the GOP and the

economic boom may peter out BMR programmes for the old uni ts

were neither prepared nor implemented. Co tto n crisis sinc e 19 92-9 3, slu mp an d re cessio n in th e

international market since mid-Nineties, high mark-up rates, high

cost of electric power, high escalation in cotton prices, high cost of

s tores and spares etc . which made spinning operat ions unviable

resul t ing in loan default by many spinning mills and closure of

about 2.0 million spindles by the end of 1998. In consequence of the

neglect of BMR of the existing units by the mill owners for about 30

years, the textile industry and especially the spinning and the power

loom sectors are burdened with preponderance of old and obsolete

machinery. This state of affairs has also been confirmed by world

renowned textile consultants as follows.



In thei r report ent i t led. "Development of a market ba sed s t rateg y

f o r t he P ak i s tan t ex t i l e and ga r men t i ndus t ry s ubmi t t ed i n J u l y

2000 . Gher z i Tex t i l e Or gan i s a t i on o f S wi t ze r l and o f obs e r ved

t h a t i n v e s t - m e n t s i n n e w m a n u f a c t u r i n g c a p a c i t i e s h a v e b e e n

i nsu f fi c ien t du ri ng t he l a st f ew y ear s a l ong t he t ext il e cha i n .

C on se qu en tl y, m ac hi ne p ar ts a re b ec om in g i nc re as i ng ly

obsole te .

I n t he i r r epor t on t he t ex t i l e i ndus t r y o f P ak i s t an s ubmi t t ed i n

J u l y , 2 0 0 0 M / s . C o o p e r s a n d L y b r a n d s , L a h o r e o b s e r v e d t h a t

i n v e s t m e n t h a v e b e e n m a i n l y i n t h e s p i n n i n g s e c t o r a n d t h a t

a ls o f or e xp an si on a nd n ot f or t he mo de rn is at io n o f t he

ins ta l l ed capaci ty . Consequent ly the t ext i l e indus t ry of Paki s tan

has l os t i t s compe t i t i ve edge i n t he i n t e r na t iona l mar ke t .

I n t he ir r ep or t c ov er in g a lm os t a ll s ec to rs o f t he t ex ti le

i nd u st ry o f P a ki st an s u b mi tt ed t o A P T M A i n Ju n e, 2 0 0 0, t h e

I ta li an e xp er ts D r. B an da ne ll i a nd I ng . F ab io L an ce ro tt o

obs e r ved as f o l l ows :

“On the basis of year of instal lat ion about 60 %

of spind le s a re o ld er t ha n 2 8 y ea rs a nd

t he re fo r e o b s ol e te . T h e r em ai ni ng 4 0 % o f

sp ind les are l es s tha n 15 year s o ld . In

comparison the spind les installed in the Italian

t ex ti le mil ls a r e no t mor e t han 10 y ea r s o l d .

T he m os t i mp or ta nt p ro bl em f ac in g t he

t e xt i le i n d us t ry o f P ak is ta n i s t he o ld a n d

obso l e te p ower l oom s ect o r ope r at i ng abou t

250 ,000 l ooms and p r oduc i ng appr ox i mat e l y

90% of the to ta l grey c lo th . Because of th i s

sector Pakis tan has acquired the reputat ion of

being a cheap cloth producer of low qua l i ty in



t he i n t e r na t i ona l mar ke t ” .

In conclus ion , i t i s poin ted out tha t neglec t or moderni sa t ion of the

production Facil i t ies by the texti le industry in general and the spinning

sector in part icular was mainly on account of factor s beyo nd the c ontrol

o f the mil l owner’s upt i l the year 2000. I t was mainly due to the

nationalisation p ol ic ie s o f t he G ov er nm en t o f P ak is ta n i n t he

S even t i e s , co t t on c r i si s and s l ump i n t he i n t e r nat i ona l mar ket i n t he

Ninet i es .

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Neglect of Bmr (p5)