Pakistan is the 8th largest exporter of textile products in Asia, The fourth largest manufacturer of raw cotton, and the third largest purchaser of cotton in natural form. The textile sector in Pakistan is responsible for over 60% of the total exports of the country as well as around 46% of the entire output country. It contributes 8.5 percent to the overall GDP and offers employment to a 40percent of the total population. Some of the biggest exporters from Pakistan include Style Textile (Pvt) Ltd, Nishat Mills Ltd, and Yunus Textile Mills Ltd.
Raw materials for the textile industry
The significant contribution of textiles to our economy is a reason to place it in the middle of our industrial revolution. However, it’s beset by various problems that have led to slow growth.
Energy Crisis
Energy is the single most significant obstacle to the industry’s expansion. The country’s general energy crisis has had various adverse effects, and the industry of textiles is among the sectors that the problem has struck.
Because of this, manufacturers attempt to develop different methods for power generation, such as high KvA generators, which results in rising costs of production. Thus, increasing costs and decreasing the profitability of exporters of textiles in Pakistan.
Competition
The textile industry in Pakistan faces intense competition from nations like Bangladesh, Vietnam, India, and Thailand on the international market. In addition, with high costs for services, wages, and an insufficient flow of foreign investment into the country, the industry needs to rise to the challenges.
Insufficient new equipment or machinery
In the absence of investments and other factors like the declining value of the nation’s currency and the rise in interest rates, There has yet to be any rapid modernization of machines and equipment. The textile industry is still operating manually, while procurement processes have been digitalized on a global level.
This means that Pakistan lost its advantage contrasted to the Indian textile industry. For instance, it has embraced the latest technologies and developed the most modern design concepts to compete in the global textile market.
The price of Raw Materials is rising.
The challenges facing Pakistan’s textile industry have become more difficult due to the rising cost of raw materials for the textile industry, which includes yarn fabric and natural cotton. The increase in raw cotton prices is due to the absence of policies supporting the textile industry and the lack of support for cotton farmers to make their products at the highest capacity.
The textile industry in Pakistan’s raw material is cotton. At the same time, the production of cotton has been going down in recent years. The last few years have seen a drastic drop of approximately 35 percent in the production of raw cotton towards the year’s end in January 2021. It was the lowest for 30 years. The reasons for this decrease are drought, pests seeds, degrading the source, and the reduction in planting space. One consequence can be that Pakistan is now a net importer of raw cotton, which influences the yarn price.
Then there are the vast problems with credit small companies confront when trying to acquire wool or raw materials, which is becoming more difficult due to the rising cost of yarn. High costs must be paid when purchasing credit since exporters are given payments for 3-4 months following the purchase because of the manufacturing or logistics procedure. This makes the raw material costly and unobtainable. But, a raw material procurement platform such as Zaraye can assist by offering various financing options that are flexible and flexible, as well as working capital for manufacturing companies.
Pakistan’s textile industry
The lack of information
Due to the lack of digitization in the sector in Pakistan, One of the most significant issues buyers face is needing access to the most competitive rates for the yarn. Because of this deficiency of information, buyers need to find out where the most competitive prices are, resulting in competitive pressure both locally and globally due to the lack of efficiency. Zarate provides a single platform that gives manufacturers details and choices to make quick, efficient purchasing decisions—all the while having the ability to pick the most competitive price for yarn and various other materials.
The absence of R&D institutions
Pakistan needs more connections between research institutes as well as the industry of textiles to create new products. This has led to low-quality raw cotton and, consequently, yarn fabric compared with similar countries within the region. It results in a lower-value product that negatively impacts the final cost.
In the end, the textile industry in Pakistan is a huge opportunity to grow if it considers the numerous issues that require immediate intervention, particularly from the federal government, to boost the sector. To improve the efficiency of the textile industry globally, Pakistan needs to meet ever-growing customer demands. The government’s policy is essential to attract foreign investments and to have an investment policy that improves and boosts the local entrepreneur.
What’s next for the textile industry?
Every industry in the present is moving towards technology, which includes those in the field of textiles from Pakistan. While technological advancements are slow, many companies will eventually rely on technology to increase efficiency to remain relevant in a globally competitive market.
The industry of textiles in Pakistan is in desperate need of change; however, the implementation process can be challenging. But, if this is executed with care, it could completely transform the textile landscape and create Pakistani textiles competitive again.
Textile production in Pakistan has tremendous potential accessible through digitalization platforms such as Yarn Online, Sanatkar, Zarate, and others by making information accessible to sellers and buyers, which results in efficiency and efficiency. But, the path to take for this sector also relies on the policies of the government that help the textile and farmers who grow the raw cotton.
Where is Pakistan exports its textiles?
Some of the nations Pakistan exports its textiles to are the United States, the United Kingdom, China, Germany, and Spain. Pakistani exports of textiles were reported at $14,242.623 million between July and March (2021-22), and when compared with the period of July to March (2021-21) with an overall value of $11,355.465 million, the figures showed an increase of 25.43 percent.
Which is the largest textile industry in Pakistan?
Alkaram Textile Star LLC located in Faisalabad is the largest textile industry in Pakistan set up in 1970.It is the largest most modern and vertically integrated textile company in Pakistan