Textile exporters shifting to Bangladesh

Political unrest and deteriorating law and order situation in the country are compelling most of the textile exporters to shift their business to Bangladesh, the biggest competitor of Pakistan in the region, sources told Business Recorder here on Saturday.

They said that the textile industry was already bearing the pinch of 5.27 percent decline in exports with apprehension that downtrend would exceed 10 percent next month.

Sources said that after imposition of emergency, mainly due to military, European customers of textile products were hesitant to visit Pakistan. Moreover foreign investment is not coming as expected, and the cost of both skilled and unskilled labour has also increased.

According to sources, the months of October, November and December are considered to be peak season for textile export orders from Europe, but these fell to minimum as compared to corresponding period of last year.

Sources said that without properly evaluating the situation, the government abolished R&D subsidy on the pretext that it was being misused by textile exporters.

"Our competition with the neighbouring countries like India, Bangladesh and Sri Lanka is making things difficult for the industry in the international market," sources said, and added that after abolishing R&D subsidy by shifting it to the real research and development, the exporters have to face losses and consequently they are thinking to shift their business to Bangladesh, which is the biggest customer of Pakistan's raw material.

Sources said that once the industrial unit are closed, then it is practically not possible to grab the global market share. They said that during last six months prices of gas have been raised four times by the government whereas the continuous interruptions in power supply is another problem being faced by the textile industry these days.

The frequent disruption in the gas supply has caused closure of approximately 30 textile mills and has badly affected 200 others in the industrial areas. This affects the quality of the fabric and increases cost of production.

Textile mills require in general about 8 pounds pressure for their boilers and generators, but generally the gas is being supplied with 6-7 pounds pressure and at present it is less than 3 pounds, on which the mills can not operate.

"In most of the cases, there is no gas supply while in other its pressure is reduced to one pound due to carbon in the filters", sources added. They said that the frequent interruptions in gas and electricity supply cause delay in meeting supply orders from other countries. Therefore, to overcome the delay the exporters have to send their consignments by air instead of sea which costs Rs 150 more per roll of fabric.

According to sources, there should be free trade agreement with Europe as regards textile exports. "Our output is 40 percent less than Lanka and it is mainly because of the unskilled labour", sources told