Need to create high-value-added textile
products to enhance growth

By Sabur Ghayur

The mere fact that textiles and clothing account for about a quarter of the value added in manufacturing places the textile and apparel industry in a position to help Pakistan get out of the current dilemma of de-industrialisation,and even from the route of low growth. Pakistani cotton is also rated as world class; it is also the most important cash crop. It has the strongest backward and forward linkages; employing about two-fourths of the workforce in the industrial sector and contributing more than two-thirds to total exports. Millions of workers are engaged in the cotton value added chain in addition to the farmers growing cotton; power loom sector alone in Faisalabad and Multan accounts for hundreds of thousands of workforce producing yarn and fabrics.

Such recognition given to this sector notwithstanding, currently our products are largely low value added. Whereas, there is being witnessed a rapidly expanding global market for value added textile products with an increasing share of high value added garments and made-ups, more than half of the blended fabrics as well as over four-fifths of cotton are exported without any processing. The apparel industry with a huge global market and rising annual share - the most promising area for value addition and employment generation in the textile sector – has yet to be properly tapped. Gains can be maximised by moving up to the value chain both within and across all the sub-processes of the textiles.

In a competitive environment, with a growing number of new styles and collections that are reducing the product life cycle and, indeed, the time from designing to delivery stage, our system is plagued with low quality products and built in deficiencies. Looking into the value chain, we find low quality introduced in every process. This is in total contrast to the emerging demand for high quality fashion garments and accessories that no doubt also require high quality fabrics.

The low-tech production facilities in textile sector in the weaving and garments production have merged as a challenge. Furthermore, system deficiencies exist right from cotton picking, storage, ginning and yarn to further value chain. Contamination is introduced in cotton due to non-standardised methods. The low count yarn produced by the spinning industry and the fabric produced on power looms by low skilled machine operators are the other causes of low quality. The dyeing of fabric does the rest. Lesser availability of skilled workforce especially in apparel designing and stitching has also made its own contribution.

It is thus of utmost importance that our industry improves its product quality, moves up the value chain, lays technological foundations and strengthens global business operations for greater penetration in the export market and generating simultaneously much needed foreign exchange, as well as productive employment opportunities. In order to become a global player, we have to lay great stress on the promotion of value added products, especially in getting a “niche” in fabrics and new designs.

We should also be mindful of the challenges from an increasing competition in textile products in the major markets – from China, India, Vietnam and Bangladesh. Furthermore, our exports are also being affected by the regional preferential arrangements, such as the North American free trade area (NAFTA), Central American free trade area (CAFTA) and the setting up of US sponsored qualified industrial zones (QIZs) in Jordan and Egypt. These facilitate duty free access in the major importing countries.

Can the apparel sector grow and prosper on indigenous resources and market links? Certainly not. It has to attract increasingly foreign investment. No doubt, joint ventures with foreign apparel manufacturers would be rather high on our agenda. The availability of raw materials, a workforce in the field for generations and overall low cost of doing business is some of the important factors that can lure foreign investors. This would no doubt help in greater integration of our industry with the international supply chain and provide larger market access.

Greater participation of foreign investors and joint ventures together with an aggressive marketing of textile products is a pre-requisite. The image of the country as a supplier of quality products can be promoted through regular participation in international product exhibitions and trade fairs. This would immensely help putting Pakistan on the global radar screen as an important textile and made-ups source country.

It is well known that our textile sector consists of a large number of small and medium enterprise (SME) clusters that are mostly located in Faisalabad, Lahore, Karachi and Multan. Rapid promotion of textile sector requiring a coordinated infrastructure can be greatly facilitated by declaring these four cities as “textile cities”.

Furthermore, declaring Lahore and Karachi as “garment cities” is also worth considering. Development of such clusters with all infrastructural and institutional support is critical for transforming our textile and apparel industry on a high pedestal and eventually as a global leader.

Simultaneously, efforts are needed in establishing common facility centres (CFCs) in these proposed “cities” under public-private partnerships (PPPs).The CFCs should be able to provide essential machinery facilities and other common services.      

The small and micro nature of hundreds of thousands of power-loom and auto-loom operators (owners) – often fragmented - makes it difficult for them to upgrade their processes and technologies and to take advantage of the supporting services provided by the public sector. Formation of cooperatives can be helpful in tackling resource and technology bottlenecks. The cooperatives can be helpful in establishing common manufacturing facilities (CMFs).

Technical vocational education and training (TVET) competence of the workforce is a “must” for bringing efficiency, productivity and better quality product. Development of TVET competence thus cannot be overruled. Hence, the cities indicated above should have textile sector-specific skills development/up-gradation centres. Additional support in the form of creating a technology up-gradation fund exclusively for the “textile industry” would be of much help. This fund should exclusively focus on the “textile industry”.

One would fail to understand if the need to improve quality of the basic raw material – cotton – is not stressed here. The country is endowed with high quality cotton but requires higher quality research and development for pest resistance and better quality seeds, as well as better farm practices.

It may also be pointed out here that we are aware of stagnation in overall exports volume in the first seven months of the current financial year, and also the shrinking share of textile goods in exports. Its share in the July-January 2009-10 exports has declined to 55 per cent out of $10.870 billion from well over 60 per cent of the last year. Textile products have been the mainstay of the country’s exports; its decline is worrisome. Prolonged power outages, gas shortage, high financing costs and infrastructure problems - major cause of current malaise – are expected to be a momentary phenomenon. Of utmost importance is to pay adequate attention to the areas indicted above.

Cotton and cotton made-ups demonstrate significant potential for turning the current despair and gloom into hope. Let us place this sector very high on our development priority and provide the needed support in an integrated and well coordinated manner.