Pakistan to invest $7 billion in garments sector – Research Snipers

Pakistan to invest $7 billion in garments sector

Pakistani textile industry

Pakistan’s organization All Pakistan Textile Mills Association (APTMA) has recently announced that one thousand manufacturing units worth $7 billion would be installed in Pakistan.

The desired units would be installed in major cities including Karachi, Lahore, Rawalpindi, Multan, Peshawar, Kasur, Faisalabad and Sheikhupura. The plants will have roughly 500,000 stitching machines, all these plants are expected to increase annual production in the country to 3 billion pieces.

In the past, investors were refraining to invest in Pakistan’s textile industry due to the increased cost of doing business in Pakistan, rising energy costs, and energy crisis in the region. Because of that small and medium industrialists moved to various neighboring countries including Bangladesh for setting up their production units.

Pakistan’s textile sector suffered a lot during these crises in the country and loss their technological and competitive advantage. In 2005-06 total investments in the sector were recorded at Rs.1 billion which fell to Rs0.56 billion in 2016-17.

China interested in upgrading Pakistan’s Textile machinery

But now the situation is changing, investors look keen to invest in Pakistan because of improving economic situation, the developments in CPEC project, energy sector development and government’s focus on bringing ease of doing business in Pakistan seems promising for many investors.

Textile industry will need more raw material after the establishment of the new units in various cities. It has been estimated that the sector will need an additional 10.3 million Bales of raw cotton, 345 million kilograms of handmade fiber, 1.983 billion kilograms of additional yarn also an additional 7.928 billion square meters of processed fiber. And cotton producing areas in the region are also on the decline since, 2011.

International Textile exhibitions conclude $375m MoUs 

Despite the unsatisfactory performance by textile sector, readymade garments have shown some improvement by exporting more garments; the category saw 5.5% increase during last year.

In return for the investment, APTMA members have demanded unchanged energy prices across the country, removal of surcharge based on the kilowatt-hour, extension of duty drawback scheme for at least 5 years and some other demands which directly affect textile production. If government provide investors what they need they will definitely increase Pakistan’s textile exports and add value to the national exchequer.