November 10,2009

Assignment 2

“Textile Industry In Pakistan”

Submited By: Mr. Rao Umar Farooq

International Business

Jyvaskyla University of Applied Sciences, Jyvaskyla, Finland

[email protected]

Submitted To: Mr. Murat Akpinar

Subject: Markets Industry and Dynamics

Introduction:
Country: Pakistan

Region: South Asia

Area: 796096 sq km

Population: 170 Million

Focused Industry: Textile

Textile industry in the world is pretty much diversified. There are several countries who have
a share in this industry like China, Pakistan, Turkey, South Korea, Indonesia, Bangladesh,
Mexico, India, United States etc. Although textile sector is in bad condition due to the
recession but still its growth rate is about 3% per annum.

Textile products are produced through a logical development of raw materials into finished
goods. The steps include extraction of Fibers from sources, converting fibers into Yarn (a
multitude of hair like filaments or fibers that have been separated, made parallel, overlapped
and twisted together by various processes), changing yarn into Fabric (usually made through
weaving or knitting) and final consumer goods (generally garments and home furnishings).
Sometimes fibers are directly compressed into fabric eliminating the intermediate spinning
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(yarn production) process. A good knowledge of fibers and their properties is necessary for
better understanding of Textile Processes.

Main Raw Material Cotton

Cotton is a fiber that grows from the surface of seeds in the Pods or Bolls, of a bushy mallow
plant. Each fiber is a single elongated cell that is flat and twisted with a wide inner hollow
(Lumen). It is composed of about 90 percent Cellulose and about 6 percent Moisture; the
remainder consists of Natural Impurities.

The outer surface of the fiber is covered with a protective wax-like coating, which gives the
fiber a somewhat adhesive quality. This characteristic combined with its natural twist
contributes to making cotton an excellent fiber for spinning into yarn. Cotton yarn is used in
making fabrics that are universally used for all types of apparel, home furnishings and
industrial applications. It is one of the oldest fibers used in textile applications. Its versatility
is almost unlimited and new uses are constantly discovered.
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Figure 1.1: Inner Layer of an Enlarged Cotton Fiber

TYPES OF COTTON

The particular type of cotton is often identified by the name of the country or geographical
area where it is produced. The quality of cotton fiber is based on its color (degree of
whiteness), length (or staple), fineness, and strength. Usually the longer fibers are finer and
stronger. Variations among cotton fibers occur because of growth conditions including such
factors as soil, climate, fertilizers, and pests. The more frequently used types are Upland
Cotton, American Pima, Egyptian Cotton, and Asiatic Cotton.

a. UPLAND COTTON

Upland cotton fibers are fairly white, strong, dull, and range in staple length from 22 to 32
mm. These are used in many fabrics, either wholly or as a component of blends with
manmade fibers. Upland cottons are classified as short-staple (Less than 25 mm), medium-
staple (26-28 mm) and long staple (29 mm and above). The quality and characteristics vary
among the kinds.

b. AMERICAN PIMA
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The main varieties are Pima S-3 and Pima S-4. Staple length is from 35 to 38 mm and the
fiber is fine, strong, lustrous, silky, and creamy-brown-white in color. The primary use is in
sewing thread and a small amount is used in high quality broadcloth. Pima cotton provides
silky smoothness, softness and luster to the fabrics.

c. EGYPTIAN COTTON

Giza and Menoufi are the main varieties. Fibers are light brown, fine, strong and 32 to 38 mm
in length. They are used in same applications as American Pima. Giza 45 fibers have staple
length from 35 to 41 mm and are used in applications where fine and stronger yarns are
required.

d. ASIATIC COTTON

Asiatic cotton is produced in India and China. These are coarse fibers, less than 25 mm in
length. The major usage is in surgical supplies.

e. PAKISTANI COTTON

In Pakistan, cotton is one of the major crops, cultivated on vast areas. Ten percent of the
world’s cotton is produced in Pakistan. The cotton is of significant good quality with fiber
length reaching 41 mm. Hand picking of cotton in Polypropylene bags results in PP
Contamination in the fibers, deteriorating the quality. The cotton is graded based on the fiber
of lower staple length. The whole lot receives a lower grade in Pakistan, as it is not
segregated based on their staple length in the ginning stage.
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Process of Textile Industry

Spinning:

Natural fibers are extracted from plants and animals in the form of Staple Fibers. These
staple fibers should be converted into threads (yarn) for fabric manufacturing. Several
techniques are available for yarn formation from fibers and their blends. Ring spinning and
Open end spinning are the two most commonly used techniques. Some synthetic fibers are
directly converted into yarns or filament fibers. Integration of staple and filament fibers is
also possible.

The formation of yarn from staple fibers by spinning is possible when they have surfaces
capable of cohesiveness. Cotton fibers have natural twist which enables them to entwine
around each other. The roughness of linen fibers causes them to cling together. The scales on
the surface of wool fibers cause them to grasp each other. Synthetic fibers are given artificial
crimps on their surface, resembling the crimps of cotton fibers, for combining them into yarn.
Flexibility permits the fibers to be twisted around one another. Uniformity of staple gives
yarns a required evenness and improves the quality.

Weaving:

Weaving is the oldest and most commonly used technique of fabric construction. It is said
that the primitive people learned about this technique from nests of birds. The evolution of
the process resulted in the development of Rude Looms which are very simple and hand
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operated. The modern power looms uses the same principle for fabric construction but the
speed and quality has improved significantly.

The length wise threads in the fabric that run from the back to the front of the loom are called
Warps. These threads are usually given more twist in the yarn to increase strength. Most of
the stresses in weaving operation are tolerated by the warp yarns. The threads running
widthwise are called Filling, Wefts or Woofs. These threads undergo fewer strains and
therefore require less twist and fewer preparations for weaving.

Pre-Treatment

Fabrics constructed on looms are called Greige Fabrics which are in most cases not suitable
for finished product application. Certain pretreatment is necessary to remove impurities and
prepare fabric for dyeing and finishing processes. Finishing processes may change the
appearance of the fabric, its hand feel, its serviceability and its durability. These processes
include some chemical application on the fabric and are called Wet Processing. Wet
processing can be carried out at any stage of fabric manufacturing (from fibers to fabric).
This processing becomes economical and commercially viable if carried out on greige
fabrics. These processes are explained in detail below referring to the systems of Sarena
Dyeing Mills.
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Dyeing:

The dyeing and printing processes provide lasting beauty and delight to the textile by adding
color to the fabric. Dyeing and printing differ in the method by which color is applied to
fabric. In the Dyeing process, fiber, yarn or fabric is impregnated with a dyestuff. In
Printing, a pattern or a design is generally imprinted on the fabric in one or more colors by
using dyes in paste form or some related means. To select a proper dye for a fiber, it is
necessary to know which dyes have an Affinity for the fiber type. In general, the dyes used
for cotton and linen may be used for rayon, but other fibers require different dyes.

Finishing:

Textile finishing covers an extremely wide range of activities which are performed on textiles
before they reach the final customers. All finishing processes are designed to increase the
attractiveness or serviceability of the textile product. This could involve such techniques as
putting a glaze on an upholstery fabric, which gives it a more attractive appearance, to the
production of easy-care finishes on dress fabrics, which improve the in-service performance
of the dress wear. Thus the aim of textile finishing may be described as improving customer
satisfaction. This improvement in the perceived value of a product to consumer forms the
basis of modern ideas on product marketing. The finishing processes may be classified as
Mechanical Finishes and Chemical Finishes.
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Stitching:

Final stage is stitching where finished fabric is changed into garments, work wears or fashion
wares. Mainly stitching houses are located in China, Bangladesh and Sri lanka. There are
some in Pakistan as well but Pakistan is not famous for stitching.

Asian Textile Industry In Focus:

In the Asia Pakistan, China, Bangladesh, South Korea and India are the main countries which
are famous for textile products. But at the moment China is leading this sector and there is a
tough competition in asian countries for this sector. China is excelling in this field due to its
low rate natural and human resources. Then South Korea, India, Bangladesh are some other
strong dealers.Mainly textile processing industries are in asia.Pakistan is the eighth largest
country to produce textile goods.

Textile Industry In Pakistan, Facts and figures

The textile industry is one of the most important sectors of Pakistan. It contributes
significantly to the country’s GDP, exports as well as employment. It is, in fact, the backbone
of the Pakistani economy.

Established capacity

The textile industry of Pakistan has a total established spinning capacity of 1550 million kgs
of yarn, weaving capacity of 4368 million square metres of fabric and finishing capacity of
4000 million square metres. The industry has a production capacity of 670 million units of
garments, 400 million units of knitwear and 53 million kgs of towels.
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The industry has a total of 1221 units engaged in ginning and 442 units engaged in spinning.
There are around 124 large units that undertake weaving and 425 small units. There are
around 20600 power looms in operation in the industry. The industry also houses around 10
large finishing units and 625 small units.

Pakistanï textile industry has about 50 large and 2500 small garment manufacturing units.
Moreover, it also houses around 600 knitwear-producing units and 400 towel-producing
units.

Contribution to exports

According to recent figures, the Pakistan textile industry contributes more than 60% to the
country’s total exports, which amounts to around 5.2 billion US dollars. The industry
contributes around 46% to the total output produced in the country.

In Asia, Pakistan is the 8th largest exporter of textile products.

Contribution to GDP and employment

The contribution of this industry to the total GDP is 8.5%. It provides employment to 38% of
the work force in the country, which amounts to a figure of 15 million. However, the
proportion of skilled labor is very less as compared to that of unskilled labor.

History
Pakistan came into existence in 1947 at that time there were Only two textile mills with
80,000 spindles and 3,000 looms only which were capable of producing 8% of the domestic
demand at that time. The organized development of cotton textile mills started in the late
50’s. Pakistan industrial development corporation was formed in 1952 which started its
operations in 1953 with the inauguration of the Vatika Textile Mill at Karachi. By mid 60’s
there were about 180 units of textile bleaching, printing and processing units, A number of
spinning units comprising of only 12,500 spindles were set up. Newly established mills were
based upon imported technology but there was lack of technical staff and shortage of capitals.
By 1970-1971 there was 113 textile units & the industry had 2,605 spindles and 30 thousands
looms. After the separation of East Pakistan , Cotton Export Corporation of Pakistan was
established which meant that most of the private sector was taken over by the state. The
textile industry suffered heavy looses because the export cotton controlled by CEC , and the
import of machinery was made difficult due to shortages of foreign exchange.

The 80’s decade brought a relief to the textile industry. There was a rapid growth in spinning
sector. Till 1980-81 spinning continued to expand to 4033 thousand spindles in 203 spinning
units, and working capacity amounted to 2833 thousand spindles. Machinery for producing
garments and made-ups was also freed from import duty. As a result, a huge expansion in the
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spinning sector took place in the first five years of the 1990s. World demand for good quality,
wide width fabrics grew and replacement and a modernization process started. With these
developments, production and export value-added items such as bed-sheets and home
furnishing started. Structural changes with the replacement of obsolete machinery and
modernization in the industry still continued in view of world competition

Main Products
Main Products of Pakistan Textile Industry are;

• Cotton (Raw)

• Yarn (Raw)

• Fibre

• Greige Fabric

• Finished Fabric Apparel( Fashion wear and work wear)

• Finished Fabric Made Ups

• Garments (Suits,Shirts, Trousers of all sorts)

• Undergarments

• Bed sheets

• Blankets

• Quilts

• Pillows

• Curtains

Competitors:
Pakistan must compete with other producers similar in conditions and comparative
advantage. The Pakistani Textile industry's biggest competitors are China, India,
Indonesia and Turkey. The cost of power in Pakistan is comparatively high to these
countries plus the current situation of the country is worst as compared to these countries
so buyer feel more secure to buy from these countries.
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Current Situation of Textile Industry in Pakistan and its reasons

The growth in the textile exports of Pakistan is gradually declining. Textile exports in
Pakistan grew from 8.92 billion USD in 2004-05 to 10.11 billion USD in 2005-06, reflecting
a growth rate of 18%. As against this, in the current year, export growth has been only 5%.
This is growing to be an issue of concern for the Pakistani government.

The exports of readymade garments grew from 1.190 billion USD to 1.254 billion USD in the
period July 2006 to May 2007 as compared to the same period in the 2005-2006. This
amounted to a growth of 5.35%. The exports of knitwear also grew from 1.570 billion USD
to 1.773 billion USD during the same period, recording a growth rate of 12.94%.

However, there was a decline in the growth rate of export in raw cotton, bed clothes as well
as cotton cloth during the same period. The export growth rate of raw cotton fell by 21.73%,
while that of bed clothes and cotton cloth dropped by 3.10% and 4.10% respectively.

In order to bring the Pakistan textile industry out of its current crisis, it is necessary that
certain strict measures be taken to meet the challenges that the industry is facing.

The Pakistan textile industry is currently facing several challenges. According to experts,
there is a need for the industry to improve the quality of its products. There is also the need
for greater value addition in its products.

The textile machinery used in Pakistan is imported mainly from the countries of Japan,
Switzerland, Germany, China and Belgium. The technology that is in use in the industry
leaves a lot to be desired. It is necessary that the industry undertake an upgradation in the
technology used. Also, there is lack of efficient R&D and training.

The lack of R&D in the cotton sector of Pakistan has resulted in low quality of cotton in
comparison to rest of Asia. Because of the subsequent low profitability in cotton crops,
farmers are shifting to other cash crops, such as sugar cane. In Punjab alone, the cotton area
sown this season was less by 1.14 percent as compared to the last year. Textile owners argue
that although the Cotton Vision 2015 targets 20 million bales till 2015, it is an ambitious
target as in reality cotton production is decreasing each year. It is the lack of proper R&D that
has led to such a state. They further accuse cartels, especially the pesticide sector, for
hindering proper R&D. The pesticide sector stands to benefit from stunting local R&D as
higher yield cotton is more pesticide resistant.

Another challenge is the high interest rate as compared to India, China and Bangladesh.

The Pakistan textile industry is facing tough competition from the Indian, Bangladeshi and
Chinese textile industries. The cost of power in Pakistan is high as compared to that in other
countries.
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On account of these reasons, the Pakistan textile industry is going through a critical
condition. Consequently, the country has become a semi-finished raw material source for
those nations involved in value addition and apparel production. It could also be said that
Pakistan is serving other nations to earn more foreign exchange on export of value-added
products.

According to the National Assembly Standing Committee on Textile Industry in Islamabad,

"Pakistan needs to improve bilateral relations with the US for greater market access.

Opportunities available/Strengths
The world demand for textiles is rising at around 2.5%, due to which there is a greater
opportunity for rise in exports from Pakistan.

According to the Pakistan Ministry of Textiles, an export target of 13 billion USD has been
fixed for the year 2007-08. Hence, the textile units in Pakistan have an opportunity to expand
their scope.

Moreover In Pakistan Labour is very cheap which is a big strength.

Labour of the textile sector is very much skilled, there are lot of textile training institutions
which are producing trained and skilled workers which is a big strength of Pakistan. Infact
there are several recongnised universities which are producing only Textile Engineers.

Future of Textile Industry

Demand of textile products is increasing every year to almost 3%. So Pakistan can also
capture some share from this but the industrialists and the government need to focus on this
sector. Textile industry just needs a good leader in the government which can drive the
industry in a right direction. Textile Industry of Pakistan can kick its competitors far off and
can contribute upto 90% in the total GDP of Pakistan.

In short Textile Industry of Pakistan has a great potential, it is lacking in some natural
resources like power and some political unstability of the country is also playing a vital role
in the reverse gear of Textile sector. But i am sure Textile industry of Pakistan will grow and
will keep its big share in the world textile.

Suggestions for this Industry

• A lot of cotton,Fibre and Greige Fabric is exported to foreign countries before the
process as raw material which should be banned.

• Finnished Fabric is exported to European and American markets. The finest quality
fabric for the suiting is exported at the rate of 2-4$ per meter. Those buyers then send
this fabric to Sri Lanka or other countries which are recognised for their stitching
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houses and then sell the garments at very high price may be between 2000 $- 3000$
per pant coat. And the producers (Pakistani industrialists) get only 10$ for that fabric.
If Pakistan stops exporting this fabric and starts producing garments only then it can
multiply the total income from textile sector from 3-4 times.

• APTMA should encourage government and should provide some funds too to help in
generating power for the textile sector.

References:

1. TDAP (Trade Development Authority of Pakistan)

2. APTMA (All Pakistan Textile Mills Association)

3. IIN (Industrial Information Network)

4. USDA ( United States Department of Agriculture)

5. "State of cotton production in Pakistan" by Dr; Tanveer Hussain

6. “Training Manual for the Textile Marketing” by Mr. Tahir Masood