Major Threats for the Industry

Rising in cost of Energy and workforce

Rising input and energy costs coupled with higher financial charges have deteriorated overall sectors performance in the last couple of years. On the other hand investment on balancing, modernization and renovation (BUR) of textile has been continuously declining since 2004-05 after a record of $928.6 million investment in a year. The main reason for depression in this economic lifeline of the country is the rise in bang interest rate, decrease in cotton production, high cost of energy, long hours of load shedding, and higher wages of skilled workmen as compared to Pakistan's international competitors and general law and order situation of the country.


Rising in freight charges

As the prices of petroleum is increasing rapidly, domestically and internationally which are affecting the company’s cost of freights. Due to increments in manufacturing cost & freights, the profit ratio has been decreased because customers are demanding the better quality products of textile in low cost. That’s the reason that Pakistan’stextile price is the lowest price in world at export level which is $0.91.




Reading: Causes of India Pakistan Conflicts


Political Instability

The decades-old Pakistan based international textile buying houses have shifted to India, Bangladesh and Middle Eastern countries due to uncertain political situation. Just like Judiciary Issues of Pakistan, President Pervaiz Musharaf issues, blames of European countries and specially America of Terrorism against Pakistan and other major issue of Benazir Bhutto murder and elections of Feb 18 2008. It’s true that elections were being held calmly and clearly, after elections new government changed the already existing policies which impact all the sectors of Pakistan including Textile. The prices of utilities and petroleum were increased by govt. rapidly which was pushed down by force before the elections.


The new govt. has also banned to export the raw cotton to the world’s countries by saying that export of raw cotton has been banned due to the increments in the prices of raw cotton should not be more export infect it should be used domestically because textile companies and baring high raw material cost due to which sales prices at domestic and internationally level are increasing day by day. Now the prices definitely come down at domestic level and production cost should be reduced.

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Internationally Competition

The decades-old Pakistan based international textile buying houses have shifted to India, Bangladesh and Middle Eastern countries due to uncertain political situation. The traditional buying houses of Pakistani products have told Pakistani producers / manufacturers to come to their new countries of residence along with their products/samples if they wanted to get supply orders. Since the removal of quota regime, Pakistan's textile sector has been facing intense competition from neighboring countries on export front. Same thing is happening with Pakistan textile industry in the other countries of the world as well as for the company.

Update: Based for Textile Industries in Pakistan (Musharaf time)

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