Dr. Yasir Nawab
Professor Dean SET NTU

Share of textile declines to 45% of exports

FAISALABAD:

Amidst ongoing economic recession and population hovering around 230 million, the country direly needs to promote revenue-earning sectors like agriculture and textile industry. As Pakistan is in urgent need of foreign exchange to stabilise its economy, textile promotion and subsequently enhancing exports of agriculture and textile items could help a lot in employment generation as well as socioeconomic uplift of the people.

Once known as the backbone of the national economy, the textile sector of Pakistan in recent decades declined due to multiple reasons, including global and domestic inflation, rise in cost coupled with the inability of industrialists to upgrade their units and produce innovative products. There was a time when Pakistan was the second most dependent country on textile with respect to exports after Bangladesh due to high global demand and availability of raw material in abundance, but these exports witnessed a prominent decline in recent years. The share of textile exports also declined to 45 percent of the total exports of the country from 65 percent.

Industrialists are most of the time making their industrial products “cheap, not unique”, thus creating a vacuum where unique and quality products of other countries are making way to the international market. Lack of innovation, product diversification, value addition, low productivity and high cost are also some of the main reasons for the collapse of the textile industry.

“Our industrialists lack innovations, and, in most cases, small power loom owners were using the looms manufactured in 2000,” said Engineer Dr Yasir Nawab, dean of the Faculty of School of Engineering and Technology at the National Textile University in Faisalabad. “Exporters here have replenished machinery and started producing and exporting value-added products with some working as vendors for globally known textile brands,” he added. He said that the National Textile University Faisalabad (NTUF) had launched a project to facilitate Pakistani industrialists switch over to the knowledge-based textile industry for sustainable enhancement of exports.

“Although, the government is doling out various incentives to promote the export-oriented sector, yet the local sector still remains a prey to inflation, high electricity tariffs and enhanced taxes,” Dr Yasir Nawab said.

He said the local industry, which was the mainstay for a vast number of the population, was struggling hard to survive due to reasons like the use of obsolete technology, increase in cotton rate, thread price and labour cost.

Published in The Express Tribune, May 29^th, 2023.

Grand Challenge Fund Project “Enhancement of Global Competitiveness of Pakistani Textile Export Value-chains By Capacity Building and Product Diversification.”

Textile is the biggest organized industrial sector in Pakistan contributing 58% to exports, 8.5% to the GDP, and 45% to the total employment throughout the country. After Bangladesh, Pakistan is the second most textile-dependent country in terms of exports. During the last ten years, the growth in Pakistan’s textile exports was 28% which is quite lower compared to the regional countries. During this period, the textile exports of Bangladesh, Vietnam, India, and China increased by 177%, 256%, 64%, and 48%, respectively. The slow growth in the textile sector is affecting the overall exports and current account deficit adversely and is also limiting the generation of new employment.

As per International Trade Center’s export potential map, Pakistan has an untapped export potential of 12.2 billion USD out of which the major portion (about 7.0 billion USD) is related to the textile and clothing sector only. Pakistan has a very narrow range of textile and clothing exports, with 97% of the exports in 4 product groups only. In the biggest export categories (HS code 61 and 62 of worth 474 billion USD), Pakistan stands at 18^th and 17^th position respectively, with a combined share of 5.4 billion USD. Pakistan exports its textile and clothing products mainly to USA (22%) and European Union (>40%). To date, we are unable to tap the markets of Japan, Russia, Korea, Mexico, Switzerland, etc. which are importing textiles and clothing of worth more than 100 billion USD. The major reasons for stagnant textiles and clothing sector include:

• lack of innovation,
• no focus on product and market diversification,
• ignoring the importance of value addition,
• low productivity,
• absence of Pakistani brands in the global market, and
• inconsistent government policies

Instead of addressing these issues, the focus remained on providing subsidies to the textile sector, to make it competitive globally, which further made the industry “cheap, not unique”. Keeping in view these weaknesses and export potential of Pakistan’s textile and clothing sector, this project was designed to facilitate the shift towards a knowledge-based textile industry for a sustainable enhancement of exports.

The project is divided into 8 work packages:

WP1     Exploration of high value indigenous natural fibers

WP2     Value-added textiles from Pakistani wool

WP3     Upgradation of indigenous Power looms

WP4     Transformation to manmade fibers’-based textiles

WP5     Indigenous development of novel and high-end textile value chains

WP6     Capacity Building using SMOT

WP7     Market Research, Branding, Marketing

WP8     Dissemination & Implementation

This project, Knowtex was started with an aim of improving the global competitiveness of Pakistan’s textile exports by using high-value indigenous resources, through well-trained manpower, product diversification, and the development of high-end textiles. This joint venture was initiated to enhance the socio-economic growth of Pakistan by establishing a strong linkage between academia and industry and other stakeholders such as textile associations and government institutions were also taken on board. The consortium for this project is composed of two universities at an earlier stage (NEDUET, and BUITEMs) & one research institute supported by the Ministry of Commerce, SMEDA, TUSDEC, Textile Associations (including All Pakistan Textile Mills Association, Pakistan Ready Made Garments, and CLOA) and 15 major textile industries. Twenty-two (22) researchers belonging to textile engineering, chemistry, management sciences, agricultural science, computer science, and mechanical engineering are working on the various aspects impacting textile exports. It is expected that this project, once implemented completely nationwide, will create a positive impact on the lives of at least 500,000 Pakistanis and may create an export enhancement of about 1.0 billion USD within 3-5 years.

In this project, each work package is being led by a senior faculty member who is responsible for the timely execution of the tasks with the support of other team members. Regular meetings played an important role in achieving the set goals timely. The PI has constituted Operational Committees, Executive Committee, and Advisory Committee with the participation of mid-level to top-level management from the industry. Meetings of these committees are being arranged regularly, with active participation from the industry. We trained people both from academia and industry by conducting twelve (12) training sessions which ranged from technical processing of textile to capacity building and environmental protection and occupational health. This activity enhanced the basic understanding of the innovative processes going on and the feedback from the industry people was tremendous.

A first-ever consolidated platform to showcase the capacity of the export-oriented textile industry of Pakistan has also been launched (www.textilpk.com). We have also developed a website dedicated to Knowtex (https://knowtex.pk/) which presents complete information about the project team, partners, regularly updated findings, etc. Dissemination is an important aspect of the research process to showcase the success stories to a larger audience. In this aspect, we have published three (3) research papers in prestigious journals so far and participated in four (4) conferences/seminars and three (3) exhibitions. In these events, we shared the knowledge and showcased our products to a larger audience from academia, industry, and government/non-government organizations.

To realize the knowledge-based economy concept, we have signed the technology transfer agreements with three organizations. One major highlight of this project is comprised of the development of a technology to convert Banana fiber (agro-waste) to textile fibers and finished goods. A patent has been filed in IPO Pakistan for this technology. The said technology has been transferred to Interloop Ltd for a license fee of Rs. 10 million. Four other value-added products have also been developed and the discussion with the industry is in progress for commercialization. We have successfully filed three (3) patents so far and other patents applications for the developments are in process as well. SMOT trainings are conducted to train the industrial employees. WP-6 conducted SMOT trainings for three different industries like Styler, Mahmood Group, Masood Textile Mills. And two SMOT trainings are under process (home-textiles, knitwear/workwear).