Some textile sub-sectors need more incentives: exporter

Some textile sub-sectors need more incentives: exporter



Sunday, May 03, 2009
By By Mansoor Ahmad
The News

LAHORE: Government planners, who are formulating textile policy, are facing a difficult job of balancing the concessions, if any, so that one sector does not gain at the expense of other.

Textile experts point out the value chain from spinning and fabric to finishing and clothing is losing global market due to high cost of doing business. They say yarn exports would not be possible until the spinning industry is granted concessions which could cut cost by 10 per cent. In this regard, they cite the examples of India, Bangladesh and China where exporters are facilitated through different methods.

MI Khurram, who runs two state-of-the-art spinning mills as well as composite knitwear units, said after providing equal concessions for all the textile sectors the government would have to facilitate specific sectors like knitwear, garments and bedwear in the form of research and development support, which was provided two years ago. “Value added clothing sectors should be given maximum grant,” he suggested.

He said grant of same concessions to spinners as given to the value added sectors would mean that importers in competing economies would be producing more fabric from low-cost yarn which would hamper exports of local weavers. In turn, he added, fabric manufacturers would call for more concessions than those the government planned to provide to the spinning industry.

Khurram said exports of cheaper fabric would strengthen manufacturers of low-cost clothing in competing countries like Bangladesh, Vietnam and Cambodia. The planners, he added, would have to formulate a comprehensive policy to address the issues being faced by the textile chain.

“In the same way, if the finishing sector of the industry is ignored in facilitation and concessions, it would promote export of unprocessed raw fabric which would marginalise the finishing industry which exports a large quantity of bedwear to Europe and the United States,” he pointed out.

Pakistan Hosiery Manufacturers Association former chairman Shahzad Azam said the government should first formulate a policy for all textile sectors which could equally reduce high cost of energy, fuel and power through special tariff concessions or subsidy according to consumption. In the same way, the impact of high mark-up should be eased on the entire textile chain. In fact, he added, these concessions were needed by the whole manufacturing sector of the country.

“Some sub-sectors of textiles need more than normal concessions as the global recession has reduced the size of their markets in developed countries,” said Sheikh Zafar Ahmad, a leading cloth exporter. He said India, Bangladesh and China had provided extraordinary subsidies to their value added textile sector in order to enable them to not only retain their market but expand it at a time when global demand was waning.

He said a realistic and prudent textile policy could facilitate different sectors of textiles, which would help them regain almost 30 per cent of the market they lost to competing economies in the past three years.