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Textile Industry

Textile Value Chain

The textile value chain consists of multiple industrial sub-sectors. The value chain is quite long starting from cotton picking to a finished garment of the latest fashion. The end product of one sub-sector is the raw material for the other. Each sub-sector in the value chain contributes to value addition and employment generation. Textile is the most important manufacturing sector of Pakistan and has the longest production chain, with inherent potential for value addition at each stage of processing, from cotton to ginning, spinning, fabric, dyeing and finishing, made-ups and garments. The sector contributes nearly one-fourth of industrial value-added, contributes 8.5% of GDP and provides employment to about 40 percent (about 19 million) of countries workforce. Barring seasonal and cyclical fluctuations, textiles products have maintainedan average share of about 62 percent in national exports. Pakistan is the 4th largest producer of cotton with the third largest spinning capacity in Asia after China and India and contributes 5% to the global spinning capacity. The Spinning Sector (output Yarn) is the backbone of the Pakistan’s textile industry. At present, as per record of Textile Commissioner’s Organization (TCO), it comprises 523 textile units (40 composite units and 483 spinning units) with 13.269 Million Spindles and 185 thousand Rotors installed and 11.083 million spindles and 140 thousands rotors in operation with capacity utilization of 84 percent and 76 percent respectively, during Jul-Mar, 2017. More than 65% of textile units are in Punjab followed by 25% in Sindh, approx. 5% in KPK and remaining in Baluchistan and Azad Kashmir. Problems of the power loom sector (output Raw & complete fabric/cotton) evolve mainly due to the poor technology and scarcity of quality yarn. Looms installed in Cotton Textile Mills are 9,084 and Looms worked were 6,384. 

 

Overview of Pakistan Exports

• Pakistan country export is showing a decreasing trend YOY (24.5 Bn FY13; 20.4 Bn FY17) and down surge at a negative compound growth rate of 4% during the review period (FY13-17). 

• Textile exports representing majority of Pakistan exports (61% in FY17) are inline with the decrease trend of total exports and shown a negative compound growth of 1% over the period (FY13-17).

 • Cotton textile representing more than 95% of textile exports stood at $12.5 Bn in FY17 as compare to 13.1 Bn in FY13. 

• Although woolen and synthetic export jointly represents less than 4% of textile exports, both shown a significant decrease in export trend over the period (FY13-17) and depict negative compound growth of 16% and 10% respectively. 

• Exports revenue heavily reliant on textile (61% in FY17) where as textile represents about 6% of Pakistan total Imports Export of textile manufactures, which account for around 60 percent of total exports, registered a growth of 7.2 percent during first eight months of current financial year 2018. All the sub-groups in this category witnessed a positive growth with the exception of cotton cloth, cotton carded and tents, canvas & tarpulin during current financial year. Exports of value added textile like bed wear, knit wear and readymade garments, towel and made-up articles (excluding towels) was up substantially during this period due to the growth in quantum terms. Exports of textile items like knitwear (Hs-61) which comprises 11.8 percent of total exports and 19.9 percent of textile group increased in both quantity and value by 2.7 and 13.3 percent, respectively. Readymade garments (Hs-62) with share of 11.4 percent in exports and 19.3 percent share in textile group increased in quantity by 12.8 percent and in value by 13.1 percent. Cotton cloth (Hs-52) which represents 9.6 percent of share in exports and 16.2 percent in textile group, decreased in quantity by 0.8 percent and its value meagerly by 0.04 percent, respectively. One of the reasons for the drop was sluggish Chinese demand for cotton cloth and yarn. Bed wear (Hs-63) with a handsome share of 9.9 percent in exports and 16.8 percent in textile group, increased in both quantity and value by 2.1 percent and 4.5 percent, respectively. Cotton yarn (Hs-52) has 5.8 percent share in total exports and 9.8 percent in textile group, increased in both quantity and value by 9.8 percent and 1.9 percent, respectively. Towels (Hs-63) having share of 3.5 percent in total exports and 5.9 percent share in textile group, increased in quantity by 8.2 percent but in value decreased by 0.3 percent. Raw cotton having a share of 0.4 percent in total exports and 0.6 percent in textile group, increased both in quantity and value by 43.5 percent and 38.0 percent, respectively.

 

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