Saturday, January 15, 2011

Textile sector investment on decline

LAHORE: Though Asia accounts for over 90 percent of the global investment in textile machinery led by China, India, and Bangladesh; the textile industry stakeholders believe that Pakistan has been left behind due to the energy crisis and high interest rates.

The latest textile machinery shipment statistics released by the International Textile Machinery Federation revealed that 97 percent of the spindle shipments in 2009 were to Asia.

China bought 5.04 million spindles, accounting for 70 percent of the total global spindle sales. India with 1.37 million new spindles had global share of 19 percent. Vietnam and Bangladesh installed 111,000 and 108,000 spindles to occupy third and fourth positions.

In 2006 when the Pakistani economy was booming, the country added 670,000 spindles to emerge as the third largest importer after China (6.7 million spindles) and India (2.8 million spindles).

Pakistan is fast losing its competitive edge in textiles as the investment in the textile sector has been on constant decline since attaining peak in 2005,” said All Pakistan Textile Mills Association Chairman Gohar Ejaz.

He said unavailability of gas and electricity is the main hurdle in investment in textiles, adding that prohibitive interest rates are another reason for stalled investment.

Asia accounted for 96 percent of the new shuttle-less looms added in the world in 2009. China with 25,600, shuttle-less looms was again the leader, accounting for 59 percent of the total purchases followed by Bangladesh that added 8,400 looms equivalent to 19 percent of the global investment in these machines.

There was no investment in weaving sector in Pakistan. In 2006, the country imported 2,400 shuttle-less looms and was fourth largest importer of looms after China, India and Bangladesh.

“Bangladesh had only 3,200 shuttle-less looms in 2004 against 24,000 installed in Pakistan,” said S M Tanveer, a leading textile mill-owner.

He said after five years, Bangladesh has overtaken Pakistan as investment after 2006 has dried in Pakistan.
The energy and power shortages played havoc with the local weaving industry that impeded investment, he said, adding that the current 15 percent shortage of gas could be overcome by importing liquefied natural gas (LNG) and putting gas in the natural gas distribution systems.

He said gas prices would have to be increased by 15 percent for all consumers to compensate for the high cost LNG.

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