Industry in Punjab: Aptma chief concerned over energy crisis, lack of market access

The Chairman All Pakistan Textile Mills Association (APTMA) Gohar Ejaz, while giving an SOS call to the government, has feared that the industry in Punjab would wipe out if due facilitation in supply of energy, cut in interest rates and a duty-free market access is not ensured at the earliest.
The Chairman APTMA was speaking at the Lahore Chamber of Commerce and Industry on Saturday. LCCI President Shahzad Ali Malik, Vice President Sohail Azhar and APTMA Punjab office-bearers including Shahzad Ali Khan and Wisal Monnoo also spoke on the occasion. Gohar Ejaz said that the industry has the ability to create two million jobs annually and ten million in next five years time if the business community is taken on board in policy making mechanism.
The APTMA Chairman, who spent well over an hour at the LCCI, spoke his heart out and gave a detailed prescription for all the economic ills being faced by the country. "Textile sector can generate 10 million new jobs in next five years and takes the textile exports to $40 billion provided Pakistan gets the same market access that is provided by the United States and European Union to 80 countries."
Market access is the main issue impeding Pakistan's textile export" he said adding that energy and power shortages in the country are making the exports expensive and further eroding our market penetration. Elaborating his point chairman APTMA said that spinners produce excess cotton yarn than local demand worth $2 billion a year that has to be exported. He said the weaving sector of the country cannot use this yarn to produce fabric as the local demand is limited while exports are not possible due to lack of market access. He said from the yarn that the weavers buy from spinners they produce grey fabric worth $2 billion that has to be exported because there is no demand for this fabric.
"We cannot blame the value added sector for not buying the excess fabric produced in the country" he said adding that the sector does not have the market access their competitors in Sri Lanka, Bangladesh, Vietnam, NAFTA and many other countries totalling 80 in all. He said value added apparel sector is subjected to 23 per cent import duties in these markets compared with zero rated access to the 80 privileged economies.
Gohar Ejaz said the importance of market access could be judged by the fact that the textile exports of Bangladesh were $5 billion in 2005 compared with Pakistan's textile exports of $10 billion. He said last fiscal the textile exports from Bangladesh increased to above $15 billion while Pakistan's exports inched up to $10.6 billion only. He said APTMA is working on a strategy to increase market access through some opportunities available to Pakistan. "Turkey has got free market access to the European Union and Pakistan has same access in China" he said adding that Pakistan and Turkey could benefit from this by entering in to strategic alliance with Pakistan supplying textile intermediary products to Turkey for onward exports to EU and its entrepreneurs establishing joint ventures in Pakistan for value added exports to China.
Talking about immediate opportunities of textile exports to Turkey, the APTMA Chairman said Pakistan currently exports $341.6 million worth of textile to Turkey out of which $237.7 million is cotton cloth and $33.6 million yarn. He said after change in country of origin rules in GSP Plus the finished fabric exports to Turkey could increase substantially.
Speaking on the occasion, the LCCI President Shahzad Ali Malik said that in order to achieve the greater economic objectives, the Lahore Chamber of Commerce and Industry eyes Turkey as the most favourable destination for Pakistani products. Therefore, it is the high time to come up with a joint strategy among LCCI, APTMA, PBIT to make an example of practical advantages of Public Private Partnership while getting the most from this window of golden opportunity. "China from our neighbouring countries and Turkey among the Islamic countries will remain our focal point" he said.
The LCCI President said that Turkey has advantage of a customs union with the European Union, signed in 1995 and a decent trade agreement with the EU - without full membership - which allows it to manufacture for tariff-free sale throughout the EU markets. These arrangements allow Turkish-made products to travel between the two entities without any customs restrictions. Taking full advantage of this scenario, Pakistani textile manufacturers can interact with the businessmen of Turkish textile sector who can export semi-finished textiles products of Pakistan to European Union after making certain value addition. It can definitely prove to be a win-win situation both for Pakistan and Turkey. Malik called for immediate steps to materialise this idea as in addition to giving boost to our exports, it will also cause to guarantee a quantum jump in bilateral trade between Pakistan and Turkey which currently stands at US $630.6 million. There is no denying the fact that on the basis of Pakistan's potential, we can take the bilateral trade between two countries to the tune of US $1 billion.
The LCCI President said that the Lahore Chamber of Commerce and Industry intends to plan a textile focus delegation to Turkey in February 2011. This delegation should consist of members from LCCI, APTMA and PBIT. The month of February is being targeted to streamline and establish economically viable linkages between Pakistani and Turkish textile sector well before March 2011 because Government of Punjab is going to organise Turkish Businessmen Conference in Lahore.
The LCCI President hoped that more MoUs would be signed at upcoming Turkish Businessmen Conference. He also informed the participants that the LCCI and PBIT have decided to conduct joint research studies to explore different markets for Pakistani products and APTMA should join hands with us to make the research more result-oriented.