Gas loadshedding to textile units: garments exporters face $800 million orders' cancellation

Pakistan is faced with cancellation of global orders of value-added textile items worth nearly $800 million as a large number of exporters have failed to meet the shipment deadline for Christmas event both in Europe and the US in the wake of four-day gas supply suspension to the manufacturing sector, exporters said on Monday.
"Now, in a bid to retain their international customers, those exporters who have global orders, are compelled to make air shipment to land their consignments on time before Christmas celebrations begin," said Chief Co-ordinator of Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea), Ijaz Khokhar.
Each exporter is bearing at least 60 percent of the total cost of the orders on transporting the consignments through air shipment, he pointed out, saying that "a number of customers have also shown displeasure after knowing Pakistan's negative industrial output and gas cuts to manufacturing units".
He said that the global market is also in panic due to Pakistan's negative production because of the key utility the government has announced to halt every week for four days, just allowing the production to remain for mere two days a week. "It is total loss for those manufacturers and exporters who had global orders for Christmas celebrations".
Khokhar said that the global customers are now shrinking their buying orders, particularly the ones with Pakistani exporters due to the annual gas cuts to factories, which are causing possible delays in arrival of much-awaited garment products for the huge Christmas buying season on the global markets. "Some 50 percent of global orders of the Pakistani exporters are likely to lose next season," he said.
He said if the situation continued as it is now, there is a greater possibility that the country would not attain the $10.5 billion annual export mark for the current fiscal year, as a clear decline of 30 percent textile exports has already shaken the economy.
He said the gas shortage in cold season and electricity shortage in hot season to manufacturing sector will drive the production towards complete closure, which is expected to result in decline of foreign exchange and annual revenue collection besides growing the trade deficit significantly.
"The low textile exports will result in a decline in income tax collection, besides other local levies and taxes and downsizing of workers from factories," he showed concerns, saying that the FBR is also unlikely to meet its annual tax target in the present manufacturing decline.
Urging the policy makers, he said the government should chalk out a plan for providing gas and electricity to industrial consumers in peak seasons to meet the global shipment deadlines and avoid cancellation of big orders. "Steps by the government are needed to evolve an alternative mechanism to increase the industrial output amid the global economic competition," Khokhar said.