Pakistanpurchase Moretextile Machines

14.04.2014

Pakistanpurchase moreTextile machines

The state does not want to export only simple stuff and yarns/The profit in the area of textile has increased/ByUlrichBinkert

Bonn(gtai)–Pakistan’s textile industry wants to enhance its vertical range of manufacture with the new investments. A huge amount of indigenous cottongoes as primary product to foreign manufacturers that results success in the world market for them.The demand of machines with new technology instead of the old one specially for refining of the fabrics and manufacturing of the garments is in increase.German engineering companies are good at trading and could certainly increase their supplies.(Internetaddresses).

There will be a dynamic demand of textile printing machines such as dyeing machines, tenters and other refining technologies in the near future. The market observers are expecting in the current year and increasingly in 2015 a double-digit growth rate for these machines that finish the fabrics. Therefore there is a high demand of dyeing machine-knit products for instance for T-Shirts.A proper seller’s market is dominated by industrial sewing machines and other technologies for manufacturing of apparel. In this area the representation of German suppliers is quite less.

The spinning’s companies are relatively well equipped and are the most important buyers in the machine market.They are reluctant, as expected, to invest in the total production.The changeover to a fine quality for the fabrics used for the apparel is being planned. However the existing machines have tobe updated with lesser expanses. The chances for the turnover regarding the power looms and knitting machines are estimated higher.

Increased demand of new machines

In addition a new trend of having better equipment is emerging. “ I recently sold two customers new machines from Germany who always bought used machines”, said a representative. Several producers acquired awareness that the low cost for energy and maintenance can compensate the acquisition cost of the machine. Because of the intense water shortage the company expends a huge amount of money for the processing of waste water. Furthermore because of frequent electricity cut the manufacturer decided to also generate electricity and to supply the excess electricity to public network.

Pakistan‘stextile industry wants to retain more value added textile in the country and requires machines for that purpose. The land is the 4th biggest producer of cotton and exports predominantly basic products.Almost half of the total exports of textile goods of 13 billion US$ in the fiscal year 2012/13 (July till June) was comprised of apparel and other processed products. Thereby one fifth belongs to relatively simple products like towels and bedclothes and another one fifth of the export revenue was due to the export of cotton yarn and cotton materials which are in fact the of the simple kind:About70%of the produced yarn is of average or raw quality while 55% of the materials are natural (grey cloth). These products are exported to China, Bangladesh and other countries as primary product where garments and other finish products for the world market are produced.

Garment manufacturer see new chances for export

The garment producers now see better marketing potential abroad because the competitor’s costs are increasing: after the disaster of factories in Bangladesh, the main competitor, the wages are being raised as well as the working standard; international purchasing managers are looking for the alternatives for the country that has image problem with the western consumers.Until now the wages, as given in Pakistan Textile Journal (PTJ), in the textile industries of Bangladesh are significantly lesser;Cambodia has the same as Pakistan while India and China are far more expensive.The global factory China is generally facing the high cost increase and wants to get rid of manufacturing the apparel for export.

Aside from that Pakistan is having a better access to the market in the European Union since the beginning of 2014: The government is hoping the additional export of one billion US$ through the GSPPlusStatus(GeneralizedSystemofPreferences)for Pakistani goods. In the last fiscal year almost two third of the total garment’s export of 1.8 billion US$ went to the European Union and 26% to the USA.

At the same time the industry is also under sales pressure. Since China has built big warehouses and is buying lesser quantity of yarn, the yarn spinning plants are facing over-capacity. For this reason the producers are in quest of export markets and considering buying knitting machines and power looms as well as finishing technologies for processing at home.

The textile sectors can afford the investment, „they have huge amount for it“, says an observer. The price of exporting garments has been distinctly increasing since 2010;the price spike of 2010/11 for yarn has attracted the export quantity. At the StockExchange Karachi the pre-tax profit of the companies dealing with „Personal Goods“ amounted to 43 billion PR that is 450 million US$ in the fiscal year 2012/13, in the previous year it was 0.3 billion PR.In this stock market segment is ColgatePalmolivealso listed, apart from that it comprises almost entirely the big textile companies of Pakistan.

Foreigners are also investing

The capital is coming from outside. The textile giants of China are moving abroad due to the rising costs and they have taken their political and traditional ally Pakistan into consideration. Shandong Ruyi announced the taking of majority holdings of Mansoor Textiles in Faisalabad in December 2013,but a certification of implementation of transaction was not provided. On the other hand the textile groups of Pakistan have invested in Bangladesh and are entering into the business regarding energy sector and real estate as observed by PTJ where the companies are expecting more profit.

The meaning of new textile clusters remains unclear.The authorities want to promote this area by giving incentives to the private economy and hope for a huge investment from China. The government has already decided in the "TradePolicy2003-04" to establish “Garment Cities” in Karachi, Lahore and Islamabad. A textile industry park in Karachi and a “textile city” at port Qasim as well as a special economic zone have been planned. The authorities will sell the land at the reasonable prices and grant tax rebates for the export purposes. The garment city in Karachi is relatively very advance, as said the observers. But even there the factories are being established. None of theseisproducing.

The big question mark for the development of textile industries is because of the tough trading conditions. How secure is the country, how do the state, administration and the provision of energy function?Because of that the clothing manufacturers will hardly get any additional order when the sewing machines do not function and the deadline for the fast moving fashion shops is not met. Because of the shortage of electricity and gas the industries, according to PTJ, will refuse to take a second order for the Christmas market. That is why 1/6th of the export orders in 2012 went to Bangladesh, Sri Lanka and India. The export opportunity is also dependent on international business environment, whether the custom duty for the Pakistani yarn in Turkey has risen or India is supporting its clothing manufacturers.

The textile industries play an enormous role for the economy of Pakistan. In the fiscal year 2012/13 the export reached 53 % of total export and created 40 % jobs in the industries. About 40 companies are vertically integrated and cover from fiber treatment to finish product that means the total textile processing. According to the statistics 11 million spindles have been installed (working capacity), in the downstream process there will be about 12000 knitting machines and about 700 processing plants.The reliable figure is available only for the tax paying companies.The important informal sector produces simple products for the local market and works with the discarded machines of big companies, imported used machines or cheap technology of China.

Import of textile machines flourishing

The market for the textile machines has already increased in 2013, as given in the statistics for import. The suppliers of Europe particularly Germany have significantly increased their export to Pakistan. The earning from Germany in 2013 with 76 million Euro was almost twice as that it was two years before. It represents, according to the data of Euro-statistics, 9 % of the total of German-Pakistan exports and more than half of the industry export of European Union to Pakistan.However the data are different according to some sources, but still 31 million Euro of the export of German textile machine in 2013 was classified as “confidential” (confidentialtradeof SITCgroup724).

Importoftextile and leather machines2011to2013

SITC-Code Product/Land 2011 2012 2013

Textile andleather machines1)(Mio.US$) 420 450 561

724 Total(Mio.US$)2) 488 439 k.A.

724.4 . Machinesformaking fibre,Spinningetc. 238 242 k.A.

724.41 MachinesforExtrudingetc. 52 100 k.A.

724.43 ..Machinesforspinning,doublingortwistingofspinning stuff etc. 85 51 k.A.

724.5 weaving and knitting machinesetc. 144 107 k.A.

724.53 Gimping-,Tulle-,lace mashinesetc. 55 53 k.A.

724.51 Weaving machines 61 31 k.A.

724.54 ..Machinesfor making spun yarns 14 13 k.A.

724.52 Knitting andStitch-bonding machines 14 9 k.A.

724.7 Dyeing, drying machinesetc. 45 38 k.A.

724.6 Auxilliary machinesand apparatusforSITC724.4bis724.53 25 23 k.A.

724.3 / Sewing machines / 23 / 20 / k.A.
724.8 / Leather machines / 8 / 5 / k.A.
724.9 / PartsforSITC724.7und775.1 / 4 / 4 / k.A.
Countries(Total/SITC724):
Germany / 119 / 151 / k.A.
China / 118 / 107 / k.A.
Japan / 96 / 56 / k.A.
Switzerland / 43 / 32 / k.A.
Itly / 44 / 30 / k.A.
Belgium / 19 / 17 / k.A.
724 / EU-27(Mio.Euro)3) / 88 / 128 / 146
.Germany / 40 / 55 / 76

1)according toStateBankofPakistan,Database:Import paymentsofBanks;2)according toUNComtrade;

3)according toEurostat

Sources:see above

The simple machines are manufactured in Pakistan.High-End-Technologycomes still from Europe, while the competition with China in respect to simple machines is gaining strength.Indian manufacturers, despite the relief in trading between both the countries, do not play a significant role. The annual important fairs in the country are "TextileAsia"(14.to16.3.15inKarachi)and"Igatex"(21.To 24.10.14inLahore).Besides the Pakistani customers also visit the international fairs like "Heimtextil"(14.to17.1.15inFrankfurt).

Internetaddress:

Fairs: Igatex

TextileAsia

Authorities:

MinistryofTextileIndustry

TextileCommissionerOrganization

FurtherInformation: KarachiGarmentCity

PakistanTextile Journal

This article is relevantfor:

Pakistan

Textiles,Clothing,Leather,general Textile andLeather machines,Environmental protection forWater

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