Marred by Energy Shortage; textile sector fears to bear 30% export decline

Marred by Energy Shortage; textile sector fears to bear 30% export decline

Islamabad (December 15), Marred by an unending energy crisis, the textile sector in Pakistan is feared to face a 30 per cent decline in its total exports. The expected decline is estimated to cause a loss of $ 4 billion to the
country’s annual exports.

Textile exports are likely to be no more than $ 10 billion during the current year as compared to $ 14 billion in the preceding year, said Gohar Ijaz former Chairman All Pakistan Textile Mills Association (Aptma).

Talking to the media personnel, Ijaz said that "Textile production is likely to decline by 30 to 35 percent due to 3 days of load-shedding a week". Export target of $ 14 billion was set for the current fiscal year, however, this
target is unlikely to be met if gas load-shedding on the current scale continues, he added.

Last year the textile sector faced gas load-shedding for two days a week, however, during the current fiscal year 2011-12, it was being curtailed for 3 days that could result in considerable reduction of textile exports, said Ijaz,
adding that about 80 percent of the industry (6000 units) located in Punjab would be the main sufferers.

Gohar revealed, "The textile industry receives export orders mostly in winter season due to arrival of Christmas and the New Year and unfortunately it is this very period when gas load shedding is at its peak. We receive export
orders mostly in the beginning of the month of September that we have to export well in time for Christmas but due to gas shortage we fail to meet deadlines of our clients."

He said, "Obviously the foreign importer whose export order is not filled within a specific time period would divert his order to another country like India and Bangladesh next year. Therefore, every year, the country loses export
orders worth millions of dollars and this issue is still unsolved due to the government’s negligence in realizing that the textile industry, the major foreign exchange earner of Pakistan, is being forced to operate at well below capacity due to gas load-shedding."

According to Gohar Ijaz, the textile industry employs 15 million work-force while 80 percent of the textile industry is dependent on gas-based captive power plants. The textile industry is currently facing financial crunch, leading
to bankruptcies in the industry.

Well-placed sources in the Oil and Gas Regulatory Authority (OGRA) told the scribe that as per the gas agreement, the textile sector would get gas for only nine months a year and in the winter season, when domestic consumption
upcountry increases manifold, the textile sector is supposed to switch to alternative fuels such as diesel and furnace oil etc that are three times costlier than gas that affects the competitiveness in international market.

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Posted by Fayyaz Yaseen on Dec 15 2011. Filed under Latest News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry