Textile exports drop by 30% due to energy shortage (Pakistan)

Mr Mohsin Aziz, Chairman of All Pakistan Textile Mills Association (APTMA) has feared that the textile sector exports have dropped by over 30% in 2011-12 due to energy shortage in the country.

Commenting on the unprecedented fall in textile exports in the month of May 2012, he said the textile exports in the month of May 2012 suggest that overall textile would hardly cross the $12 billion mark this against projected $16 billion. Although in the extreme crisis month, the exports remained much below over a billion dollar from $800-900 million, he said, adding: With gas supply we cross over $1 billion last two months but we should have cross $1.3 billion.

Chairman APTMA said persistent electricity and gas cut to the industry has crippled the production capacities of textile industry, which despite being export-oriented is unable to cross $1 billion a month over the last six months against traditional exports of $1.25 billion a month in the past.

He said a minor improvement in energy crisis during last two months had jacked up exports to $1.1 billion per month but still it would not help recovering the shortfall.

Mohsin said the textile exports could hardy reach to $11.2 billion in eleven months and it may hardly cross of $12 billion on 30th June 2012 mainly due to energy crisis, including electricity and gas, coupled with high interest rates and other impediments confronting the industry.

According to him, the Non Performing Loans (NPLs) of the industry have reached to more than 30% of its portfolio, which is quite alarming and prime cause of drop in local sales and exports, adversely affecting the viability of industry. Some of the units either have closed or partially operational. The industry would not come out of sluggish mode until and unless its issues are properly addressed by the government, he added. The issues of high interest rate and energy crisis are not addressed.

Chairman APTMA said a minimum of five days a week gas supply to textile industry was imperative and any move for reduction to this arrangement would definitely be detrimental to the export-oriented textile industry and last straw on camel’s back.

He said textile exports in quantity terms during the month of May 2012 has once again declined heavily across the value chain including cotton cloth by 12%, knitwear 24%, bed wear 19%, towel 18% and readymade garments 27%.

He lamented that Pakistan was losing exports in a situation when the regional competitors like Bangladesh is growing fast and have almost doubled its exports in last two years and have now reached to $23 billion.

He has urged the policy decision makers including State Bank of Pakistan, Textile Ministry and Commerce Ministry to sit with the industry stakeholders and take appropriate steps to strengthen the dwindling textile exports in the larger interest of national economy, jobs and exports.