$5b investment in textiles to boost exports

PM adviser welcomes investment, saying govt policy bearing fruit

KARACHI:

Adviser to Prime Minister on Commerce and Investment Abdul Razak Dawood has welcomed the planned investment of $5 billion in the textile sector of Pakistan aimed at establishing 100 new units.

“Our Make in Pakistan policy is beginning to bear fruit,” he said in a statement on Thursday. “We have been informed that investment of approximately $5 billion is in the pipeline under which 100 new textile units are expected to be established.”

He added that apart from enhancing the export capacity, the new units would jointly create around 500,000 jobs, he said.

The government has reversed the de-industrialisation process in Pakistan and placed the country’s industrial sector on the path of sustainable growth, said Dawood.

Topline Securities analyst Saad Ziker stated that the textile sector was all set to boost exports after foreign shipments rose 29% year-on-year to $2.9 billion in the first two months of current fiscal year 2021-22.

The textile industry “is often termed the backbone of Pakistan’s economy, therefore, there is a need to enhance support for the sector in terms of investment and subsidies,” he said.

Elaborating the “Make in Pakistan” policy, he emphasised that new investment under the initiative would steer a turnaround in Pakistan’s textile industry.

“It will increase the number of textile units and reduce unemployment by creating around half a million employment opportunities,” said Ziker.

Read Textile mills aim to meet $21b export target

The analyst pointed out that according to the Pakistan Cotton Ginners Association cotton arrivals into factories were calculated at 3.8 million bales by October 1, 2021 in the current season compared to 1.9 million bales in the same period of last year.

He pointed out that the twofold increase had dispelled the fear of shortage of cotton and provided relief for the exporters as they would be able to fulfill their export orders swiftly.

Arif Habib Limited analyst Arsalan Hanif said that textile companies were currently enjoying excessive export orders and they were booked for almost the entire current fiscal year.

To recall, textile exports stood at $15.4 billion in fiscal year 2020-21 against $12.5 billion in 2019-20, portraying a growth of 23%.

“Conducive policies of the government coupled with high export orders have encouraged textile companies to expand their production capacities, which is expected to increase Pakistan’s exports in the foreseeable future,” said Hanif.

He projected that the investment of $5 billion in the textile sector would increase textile exports to $25 billion by 2025 besides creating new job opportunities.

Published in The Express Tribune, October 8^th, 2021.

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