LAHORE: The number of knitwear exporting units has declined from 1,183 in 2005 to 840 in 2009 and the closed units include some of the most efficient hi-tech large factories which have continued to lose their competitive edge in the world market…This was disclosed at a presentation on the state of knitwear industry given by the Pakistan Hosiery Manufacturers Association (PHMA) to the Lahore Economic Journalists Association…The presentation revealed that knitwear units in Karachi had dropped from 400 in 2005 to only 300 in 2009 and the closed units included big names like Hussaini, King and Zainab. In Lahore, the number of units has declined from 247 to 180. Here the big exporting units which have been closed include Sara, Ammar, Highnoon, Claas, Navena and Angora. Only 190 knitwear factories are operating in Faisalabad against 300 in 2005 while the number of operational units in Sialkot is down to 170 from 236…“Pakistan has the most efficient and hi-tech knitwear industry in the region which produces better quality clothing than its competitors,” claimed M I Khurram, a leading knitwear exporter…He said the closure of over 30 per cent of the industry should be an eye opener for economic planners, adding the operating units had eaten up all their reserves during the past three years and owners were disposing of their assets to keep the wheel of industries moving…“The decline is due to flawed government policies,” said Zafar Mehmood Sheikh, another top knitwear exporter. He said the government withdrew research and development support although its own statistics revealed that after grant of the facility the knitwear exports to North America had increased by 40 per cent, 33 per cent to the European Union and 17 per cent to Australia during 2005 to 2007…During that period, he said, knitwear exports fell in regions where R&D facility was not provided. These regions included Africa and Asia where exports dropped 40 per cent and 33 per cent respectively, he added…Highlighting the importance of clothing sector, former PHMA chairman Shahzad Azam said the sector provided highest number of jobs in textiles and added highest value to exports as well. He said one bale of cotton earned foreign exchange worth $238 only while knitwear made from one bale of cotton fetched $1,600…“One million dollars additional investment in spinning or weaving creates 34 new jobs with additional exports of $270,000 while the same investment in the apparel sector generates 460 jobs with additional exports of $3.2 million,” he said…PHMA Vice Chairman Adil Butt deplored that the government continued to levy 3.36 per cent in taxes on exports despite claiming that exports were zero-rated. The taxes levied at different stages included one per cent turnover tax each on cotton, yarn, knitting, processing, stitching and export value plus 0.25 per cent exporter development surcharge and 0.3 per cent stamp duty. In addition, it deducted 0.58 per cent of the export value as worker welfare levy…He said bank mark-up had increased from 11 per cent in 2005 to a minimum 18 per cent now. With the enormous rise in utility rates, inflation had surged from 4.2 per cent to over 20 per cent while minimum wages rose from Rs2,500 to Rs6,000, he added…As a result of a regressive business environment, Khurram said, Pakistan’s clothing exports had declined from $3.6 billion in 2005 to $3.25 billion in 2008 and were further declining. In comparison, Bangladesh’s apparel exports rose from $7.8 billion to $9.2 billion during the same period, Chinese apparel exports increased from $74 billion to $495 billion and India’s apparel exports from $9 to $10 billion…Comparing the facilities provided by competing economies, he said China had raised rebate on exports from 13 to 15 per cent from February 1 while India gave 9.5 per cent rebate to its apparel exporters. Export rebate in Pakistan, he a
Date:2/15/2009
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