Demand drive: Yarn production increases to cater to rising demand

Improvement in energy supply and lower Chinese production divert demand to Pakistan.

FAISALABAD:

After twenty-three years of existence, Hassan Limited Faisalabad, along with other producers in the yarn industry, has decided to go global after witnessing early signs of an improving energy crisis and increasing demand of yarn in the international market.

The public limited company plans to invest Rs1.2 billion to install new units in Faisalabad to meet the increasing demand of yarn in the international market. As China is gradually moving away from yarn production, global buyers have started shifting to Pakistan.

The steps taken by the Pakistan Muslim League (N) government to resolve the energy crisis has encouraged industrialists to expand businesses, said the company’s Chief Executive Officer Umar Nazar Shah while giving an interview to The Express Tribune.

Steps like clearing circular debt have sent positive signals to international buyers, who were earlier shied away due to delay in meeting their orders, to come to Pakistan, said Shah.

He said industrialists who deal in the local market are now entering the international market and investing billions of rupees.



Hassan Limited started its business in 1990 and produces a broad range of carded ring spun yarns – short and long staple – from a variety of carding spinning systems tailored for today’s export and local market.

Shah said the rising demand of yarn in the international market has incentivised the company to move from the local market to the international market.

Hassan Limited has six operational units in Faisalabad with the capacity of 187,000 spindles, and it plans to install 27,000 more spindles for export purpose, said Shah.

Pakistani products are already in great demand in the international market but the investors have been reluctant to invest in the country due to uncertain policies of the previous government and the energy crisis.

“The situation seems to have improved as the spinning industry is receiving gas ten hours a day without any day off”, said Shah.

He added that China has great demand for yarn which encourages local producers to go global. He said the trend will help the government increase textile exports to $14 billion this year.

He added that the manufacturers were satisfied with the current government which seemed serious about resolving longstanding chronic issues.

He added that if the government provided electricity and gas on an equal basis to all provinces, the business community would be ready to invest more in the country.

In the time of electricity load-shedding the company used a captive power plant to fulfil its electricity needs. Now our factories remain operational around the clock, said Shah.

Shah added that the energy crisis was one of the biggest reasons behind idle capacity that discouraged investors from expanding their businesses in last five years.

China’s middle class is growing, said Shah, while labour in the neighbouring countries is also becoming expensive. This has shifted the global buyer to Pakistan.

We have cheap labour and the best raw material in the world. This provides an opportunity to Pakistani businessmen to capture the international market, he said.

Only a business and investment friendly environment can bring investment into the country, he added.

Published in The Express Tribune, August 18^th, 2013.

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