Textile has been brought to its knees and APTMA has been frequenting Dar’s office, presenting all the issues that currently plague the industry. One of those highlighted issues – though ostensibly of lesser exigency – is that of textile machinery.
At once what becomes apparent when one looks at the data is that the number of looms operating in Pakistan has decreased, declining from 10,000 in 2004 to the 8,000 mark in 2013, where it has been constant since. Before that, looms were constant at the 10,000 mark for eight years. Meanwhile, spindles have steadily increased from 9.4 million to 13.2 million over the same period. For the uninitiated, a spindle is used to spin the cotton into yarn, while the loom is used to turn the yarn into cloth.
The conclusion that one immediately rushes to is that there has been declining interest in cloth production, with the emphasis being placed on yarn production. But this is inaccurate, as cloth production has been constant at one billion sq. meter level. What’s happening? The answer is modernization; the looms of old have become obsolete, being replaced by air jet looms that are worth for more than just one loom.
A source at APTMA told BR Research that modernization is happening and that roughly 75 to 80 percent of the textile mills in Pakistan have become modernized. Shuttle-less looms such as air jet are infinitely advantageous over shuttle looms, and can weave up to 4 times as much as conventional looms per unit time. No doubt that it’s good news that our textile industry is largely modernized, but this isn’t without its fair share of issues.
The source said the new looms have now become old, with a majority of them being around 10 years old, as the modernization began in 2004. Moreover, productive capacity of textile mills has been suffering because of the persistent energy crises.
The issue highlighted by APTMA in one of its presentations to the Finance Minister is that from 2008 to 2013, Pakistan added a mere 1,300 shuttle-less looms and one million spindles. Compare this with Bangladesh – a country that doesn’t even produce cotton, mind you – which added well over 22,000 looms and two million spindles. To make the comparison even tougher, India added 36,000 looms and over 14 million spindles.
An SRO puts zero-rating on the import of certain textile machinery up until June 2016 for those companies that are listed with the Ministry of Textile. So why hasn’t the investment in machinery gone up? Other than loadshedding, one answer lies in cotton production; production has been very haphazard and insufficient.
While this decade’s cotton production has been superior over last, it has been very haphazard and unpredictable, ranging between 11.5 and 14.8 million bales. This is the sort of uncertainty that deters further investment. Moreover, Pakistan is a net importer of raw cotton to meet its needs. So, it seems that there isn’t enough cotton to go around. This becomes all the more evident when one looks at cloth production, which has been static for the past 9 years. The current year’s production was an all-time record for Pakistan at over 14.8 million bales, but it’s still not enough to encourage more investment in machinery.
Originally published on August 17, 2015.
