Pakistan textile industry retaliating to get back its position

Pakistan, the world’s fourth largest cotton producing country but interminable power and gas cuts have stopped exporters from producing their orders on time. Many have watched helplessly as their clients have instead turned to Vietnam or Bangladesh.

A third of the production capacity of the textile sector has disappeared, thousands of factories have closed, and most of the others are running below full capacity, said Rehan Bharara, a former loom owner who now runs a public infrastructure project for the textile industry.

Only those manufacturers which invested heavily in their own energy production survived. These include plants run by the Sadaqat company, which provides house linen to major Western retailers such as Debenhams, Tesco and Target. Energy supply to huge printing, cutting and sewing departments is rotated according to need. They have three sources of electricity: the main and cheapest one is generation through gas, if they don’t have gas, they have go for Wapda (the public utility), if Wapda closes, they go to diesel generators, said chairman Mukhtar Ahmed. They have no choice. If they stop producing, they will lose their customers.

Smaller plants, notably the hundreds of thousands of cotton loom workshops, lack backup generators and are dependent on the public network. Their loom workers only get paid if there is power and looms are running. If there is no power, there are no wages, said Mohammad Rizwan, a weaver. The government has promised to end power cuts by 2018, and textile industry would be prioritized.

As the country slowly emerges from a long-term power crisis, its once booming textile sector is moving quickly to find its feet, but high energy costs and a decade lost to competitors mean recovery is far from assured.

Total exports, meanwhile, 60 percent of which are made up by textiles, declined by 13 percent in the first nine months of this year compared to last, a sign that the industry’s recovery is yet to begin.

In the past few weeks, the biggest manufacturers in Faislabad have been supplied without interruption 24 hours of electricity a day, said Wahid Raamay, chairman of the Council of Loom Owners in Faisalabad. Despite these important advancements, textiles are not yet out of danger.

As the country’s electricity supply has improved, natural gas imports bills have gone up with the increased cost passed down to consumers. The cost of electricity is estimated to have doubled over eight years, from six rupees per kilowatt/hour to 11 which is still much lower when compared to electricity produced by a diesel generator the cost is 26 rupees per kilowatt hours.

Muhammad Salim Bhatti, general manager of the city’s power distribution company admiited that at this time they are struggling to give competitive power. Over time, they will become cheaper as new power plants will be more efficient and will be in a position to compete.