Chinese investors offered incentives in footwear industry

BEIJING: The labour cost of Pakistan’s footwear industry is almost one-fourth of that of China, which can be a big incentive for the Chinese investors. China is shifting its “sunset” industries, including footwear, clothing and toy manufacturing to other countries, and Pakistan is one of its most suitable destinations.

Since 2018, the total import volume of China’s footwear products has continued to rise. By 2021, the total import volume of footwear products has reached $6.126 billion, marking an increase of 10.1% over the same period last year, China Economic Net (CEN) reported.

According to Pakistan Footwear Manufacturer Association Chairman Zahid Husain, Pakistan is likely to start exports to China by 2025. Pakistan has some world-class export companies, but most of them are small and medium-sized. The government has recognized the huge potential of the footwear industry and took many steps to reduce the customs duties on more footwear materials from China.

Growth in the footwear industry will also be achieved by selling manufacturing capacity to international brands. The chairman concluded that, the establishment of international brands is not yet possible and will only happen once a brand is superior in its home country.

We believe that with more investment, more “shoemaking in Pakistan” will be achieved and we can continue to open up the international market. Pakistan’s footwear exports witnessed an increase of 21.16 pc during the first ten months of financial year (2021-22) as compared with the exports of the corresponding period of last year.

“Since 2018, the output value of Pakistan’s footwear industry has developed rapidly and the export momentum keeps going. To seize this golden opportunity, more investment is required to flow into shoe factories to increase capacity and contribute to the country’s exports,” he said.

Pakistan exported footwear worth US $130 million during July-April (2021-22) against the exports of $107 million during July-April (2020-21), showing a growth of 21.16 percent, according to Pakistan Bureau of Statistics (PBS).

The chairman underlined that imports of shoes had dropped by an average of 16.2 million pairs per annum over the past three years, and that the decline had been covered by an increase in domestic production.

“Existing companies are improving the operation capacity, and new companies are pouring into the footwear industry, creating a bright future for the industry. Pakistan’s footwear industry is in a position to expand its exports to $1 billion by 2027,” he said.

However, challenges still remain. The availability of many materials, including quality moulds for sole, synthetic materials for upper and quality trims and buckles, is dependent on import.

The skills of middle managers are in need to be enhanced, and a few managers have been trained in operational efficiency and productivity, which keeps the scalability of operations at a low growth rate.