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Textile Industry in Pakistan

Textile Industry in Pakistan – Operations Management Project Report

Textile Industry in Pakistan

Pakistan Textile Industry  

Textile Industry in Pakistan – Introduction:

The Textile industry increases in the cotton production and expansion of textile industry has been impressive in Pakistan since 1947. Cotton – bales increase from 1.1 million bales in 1947 to ten million bales by 2000. Number of mills increased from 3 to 600 and spindles from about 177,000 to 805 million similarly looms and finishing units increased but not in the same proportion.

It employs 50% of industrial labor force and earns 65% foreign exchange of total exports. Pakistan’s textile industry experts feel that Pakistan has fairly large size textile industry and 60-70% of machines need replacement for the economic and quality production of products for a highly competitive market. But unfortunately it does not have any facility for manufacturing of textile machinery of balancing modernization and replacement (BMR) in the textile mills

However, The Reason of the Failure of textile industries is Energy Crisis, Law and Order situation, Shortage of industries and one of the Major Factor is Failure of Agriculture Sector which is Automatically effect on Textile Industries. But in 1998, India gained the NO 1 position, leaving Pakistan at NO 2 But it must be appreciated that all successive governments since the birth of cotton textile industry in Pakistan have been encouraging the textile exporters to penetrate into new market and also to broaden the base of exportable commodities by including value added textile goods so that reliance on exports of cotton, cotton yarn and coarse fabrics gradually become minimal.

In 1992, a foreign consultant was hired by the government to look into the stagnating conditions in the local textile industry. One of the observations of the foreign consultant was “Pakistan has failed to make real progress in the international market and is being over taken by many of the neighboring competitor countries.

Exporters of textile products have found the target of US$ 10.4 billion set by the government for the year 2002-2003, as achievable and termed it a realistic approach. The textile sector which constituted 69% of total export during 2001-2002, believes that enhanced quota by the European Union and Turkey would make this possible to fetch another US$1 billion this year.

In Pakistan 2010 to 2011 the situation of Pakistan Textile industry is that they could not fulfill their foreign orders due to shortage of Cotton then they import 14 million bales of Cotton from India to fulfill the orders.

 

Literature Review:

In 2010 Aftab A Khan and Mahreen Khan says that Pakistan Textile industry contributes more than 60 Percent(US$ 9.6 Billion) to the Countries total export But now this time the industries are facing great decline in its growth rate. The reason of this decline is Global recession, internal security, cost of Production, Energy crisis and declining the value of Pakistani currency. Due to this the marketer cannot travel abroad for effectively marketing their Products With an in-depth investigation it was found that if Govt of Pakistan take some serious action the Pakistan textile industry can back again on the winning track hurdles like Govt should Provide subsidiary to the textile industry ,Reduce the sale taxes, Provide electricity on low rates etc. Purchasing the new Machinery or enhance the Quality of Existing Machinery and introducing the new technology can useful for the expansion of Textile industries and the quality of Products which is very important for the modern era.

 

The objective of the Study:

The basic objective of the study is to identify the factors or the Reasons which are responsible for the Downfall of the Industries and how we can improve the Textile Industries in Pakistan.

Research Methodology:

The purpose of the study is to identify the factors that affect the Performance of the Textile Industries due to which the textile industries are down falling in Pakistan. For this research we have selected some Textile Industries like Sapphire Industry, Mehmood textile Industry and Shah Kaam industry. This research utilized qualitative research methodology. The questionnaire is used to collect the information. The questionnaire was designed by researcher contains on 20 questions. A sample of 180 was taken from the Textile Industries and for the Analysis of the data we have used the SPSS software.

 

Table 1:

Distribution of Gender

Statistics

         Gender
NValid180
Missing0

 

Gender
FrequencyPercentValid PercentCumulative Percent
ValidMale17094.494.494.4
Female105.65.6100.0
Total180100.0100.0

Description:

In this Paper our First Table shows the Gender that we have collected the sample of 180 People in which we have selected 170 male and 10 Female in which almost 50% is collected from Textile industries and 50% is collected from University of Lahore.

 

Table 2:

Distribution of Age

Statistics
Age
NValid180
Missing0

 

Age
FrequencyPercentValid PercentCumulative Percent
Valid15-2513373.973.973.9
25-354223.323.397.2
35-4552.82.8100.0
Total180100.0100.0

Description:

This table shows that the total Population which we have selected is 180 and the age of 73.9% is 15 to 25, the age of 42% is 25 to 35 and the remaining 5% is 35 to 45 years

 

Table 3:

Distribution of Reasons of Downfall of Textile Industries.

QuestionsS.DDNAS.ATotal
F%F%F%F%F%F%
Textile Industries are facing hurdles for Last twenty Years?2614.43418.9116.18245.62715.0180100
Employees are Promoted on the bases of Relationship in textile industries?2916.13821.163.37240.03519.4180100
Value of Pakistani currency is continuously increasing as against US dollar?12066.74323.921.1105.652.8180100
Textile Industry Depends on Agriculture Sector?31.72011.12212.210156.13418.9180100

Description:

In table 3 we have distribute the Reasons of downfall of textile industry and mostly people are agree with our questions like in our first question 45.6 % Population is agree, in second 40% are agree, in third 66.7% is agree and in fourth 56.1% is agree which are given upward in the table.

 

Table 4:

Distribution of Effect of Downfall of Textile Industries

QuestionsS.DDNAS.ATotal
F%F%F%F%F%F%
Textile Industry is continuously increasing in Pakistan?5731.79653.31810.084.41.6180100
Economy of Pakistan is decreasing due to the downfall of textile industries?3318.32815.62513.96636.72815.6180100
Un-employment rate is increasing in Pakistan due to the failure of textile industry?3117.2116.12815.66033.35027.8180100
Production of cotton is increasing in Pakistan for last few years?84.44022.24122.85530.63620.0180100
According to quality Pakistan is producing No 1 cotton now days?147.842.22916.19552.83821.1180100

Description:

Table 4 is for the effect of the downfall of the textile industries in first question 53.3% Population shows that it is bad effect on economy, in second 36.7% are agree ,in third 33.3% are agree, in fourth 30.6% says that production is increasing, and in fourth question 52.8% says that Pakistan is producing No one Quality cotton.

 

Table 5:

Distribution of Shifting of Textile Industries.

QuestionsS.DDNAS.ATotal
F%F%F%F%F%F%
Is textile industry shifting to the other countries like Bangladesh due to crises?73.995.084.46133.99552.8180100

Description:

Our 5th table is about the shifting the textile industries to the other countries which is the effect of the reasons and effects of the downfall of the textile industries and in this table 52% population is strongly and 33.9% are agree which means that industries are rapidly shifting to other countries.

 

Table 6:

        Determination of Improvement of Textile Industries.

QuestionsS.DDNAS.ATotal
F%F%F%F%F%F%
Govt is taking some serious steps for improvement of textile industries?6335.06234.4158.33217.884.4180100
Govt should reduce the taxes of textile industries in Pakistan?116.14223.3137.27943.93519.4180100
Govt is Providing Gas 24 hour to the textile industries?10558.35430.052.8137.231.7180100
Govt is providing Electricity on Low rate to the textile industries?10256.74122.7137.22111.731.7180100
Bank Provide Loan on high rates of return?158.3179.43016.78748.33117.2180100
Environment of Pakistan is suitable for Agriculture?52.852.8105.67240.08848.9180100
Pakistan should not export the cotton in Raw form?126.72011.13217.86435.65228.9180100
Govt does not charge taxes on Agriculture?3720.62513.93016.74424.44424.4180100

Description:

In our last table which is about improvement of textile 49.9% People says that Govt should reduce the taxes, 58.3% says that Govt is not providing gas 24 hours, 56.7% says Govt is not providing electricity on low rates, 48.3%says Bank provide loan on high rate of return, 48.9%says environment of Pakistan is suitable for agriculture, 35.6%says Pakistan should export cotton in raw form and 24.4%says that Govt should charge taxes on agriculture.

 

 

Textile Industry in Pakistan – Conclusion:

In the past textile industry of Pakistan plays an important role in earning foreign exchange and providing employment to the country but with the ending of the quota system in Pakistan or after 1990,s Pakistan textile loses share in world trade of textile Product Before decline Pakistan textile product have a big Potential to capture big shares  of world trade but there are Lots of reasons which forces to step back from using the full capacity of textile machinery to earn more and more foreign exchange for the country but Govt of Pakistan is not serious in resolving the problems like shortage of Electricity, Gas and failure of Agriculture sector  which forces the textile exporter not to take orders because they cannot fulfill the orders in time due to all of these reasons Pakistan textile industry is declining day by day and Pakistan textile owners use old machinery which is less efficient and not up to the mark with the competing countries  If Government of Pakistan does not take immediate steps to counter all these problems then Pakistan trade deficit will raise more on daily bases.

 

Textile Industry in Pakistan – References:

BACKGROUND:

More than two-thirds of Pakistanis live in rural areas, of which about 68 percent are employed in agriculture (40 percent of total labor force). The agriculture sector accounts for about 22 percent of the national GDP and has enjoyed steady growth for almost three decades, substantially contributing to poverty reduction during the 1970 to 1980s.

However, the agriculture incomes are far less encouraging and rural poverty was back to 38.9 percent by 2002, the same level where it was at the beginning of the 1990s.

Reasons of Failure of Agriculture Sector:

The main Reason of the Failure of Agriculture Sector is due to Lack of Modernization Equipment, Shortage of Electricity; Increase the Price of Seeds and Pesticides etc.

Cotton textile industry has been premier industry in Pakistan and a major source of export earning and employment. It also helps in value addition to the manufacturing sector of the economy. During the years between 1993 and 1998, production of yarn (in quantity terms) registered a steady annual growth rate of 302% in Bangladesh and 405% in India. On the contrary, Pakistan registered a growth rate of 101% per annum in yarn production although it ranked third after China and India in the global yarn production during the same six years. In exports, while Taiwan, India and the republic of Korea registered an annual increase of 18.1%, 27.7% and 5.4% respectively during 1993-1998, Pakistan registered a negative growth of 4.8% one important development was that till 1997, Pakistan was the world’s largest exporter yarn followed by India.

Over the years, Pakistan is said to be the single crop economy i.e. cotton and textile that claims the lion’s share in terms of the contribution in the national economy of Pakistan

Despite efforts to bring in diversification in country’s overall economic get-up the textile sector continues to be the most important segment of the national economy. Its share in the economy, in terms of GDP, export, employment, foreign exchange earnings, investment and revenue generation altogether placed the textile industry as the single largest determinant of the economic growth of the country. Despite harsh international economic conditions; Pakistan’s textile industry has weathered the storm by coming out of the international crisis in a very positive manner. During the year 2006-2007 exports were controlled from falling and significant investment was made in value-added expansion and in Balancing-Modernization- Replacement (BMR) (2000).