Pakistan denim on an upward trend

Pakistan’s denim is on an upward trend, despite the larger textile industry being in trouble, as denim factory Artistic Denim Mills Ltd., in Karachi is operating as a one-stop shop turning cotton into jeans, is doubling production and has built a new factory in Pakistan’s financial hub. Denim factory could hold the key to reviving Pakistan’s ailing exports. Pakistan has a tremendous opportunity.

Chief Executive Officer Faisal Ahmed is bullish and supplies retailers such as Zara and Next Plc. He points to one key decision — unlike most industrialists, Artistic Denim started by making garments about 25 years ago instead of just shipping spun yarn or fabric. Now they have been able to get many orders that used to go to Turkey earlier.

The move shows a rare sign of promise in a stagnant industry that has been part of Pakistan’s economic backbone for decades. Pakistan is among the top five growers globally and cultivated has been cultivated on these lands for at least 5,000 years. Typically Pakistan has been mostly converting cotton into thread and fabric that is shipped East to other Asian countries, which then manufacture the final garment.

With foreign reserves declining ahead of elections in July, Pakistan’s government is under pressure to revive its exports and avoid going to the International Monetary Fund for what would be its 13th bailout since 1988. The textile industry is key as it accounts for more than half of all overseas shipments.

According to World Bank data, Pakistan has lost market share with exports growing 27 percent during 2005 to 2016, falling behind Bangladesh’s 276 percent increase and 445 percent in Vietnam. India is the second-largest apparel exporter in South Asia after Bangladesh. Nonetheless, Pakistan still has the advantage of homegrown cotton that it can capitalize on, unlike Bangladesh and Vietnam.

Pakistan is targeting its first export jump this financial year after giving tax breaks to exporters, in a bid to reverse a three year slump with value added products like denim getting the biggest incentives, Mohammad Younus Dagha, secretary at the Commerce Ministry, said in an November interview.

Textile industrialists have continually lobbied the government for subsidies and incentives. Yet despite last year’s measures, Prime Minister Shahid Khaqan Abbasi said in an interview this month that no further giveaways to the industry were likely before the elections.

According to Majyd Aziz, president of MHG Group of Companies in Karachi, about 95 percent of Pakistani exporters mentality is waiting for a customer rather than going out and finding them. In the global world, integration and economies of scale is needed.

Artistic Denim is one of them. It has chased premium brands in Los Angeles that pay more for smaller deliveries to keep changing designs rather than bulk orders.

The company said that this will help revenues reach as much as eight billion rupees ($72 million) in year ending June with new garment production capacity increasing sales. In Karachi, the firm’s shares rose by the 5 percent limit at 11 a.m. with volumes at their highest in almost a year.