Gul Ahmed shuts export unit
Gul Ahmed’s fall/winter collection includes women’s wear, handbags, menswear as well as accessories. PHOTO: PUBLICITY
A shock wave hit the textile sector on Tuesday when Gul Ahmed Textile Mills Limited (GATM) announced the closure of its export apparel segment owing to persistent losses and structural challenges.
The decision was approved by the company's Board of Directors in a meeting on September 29, 2025, according to a notice submitted to the Pakistan Stock Exchange (PSX).
Former All Pakistan Textile Mills Association (APTMA) Chairman Asif Inam said the cost of doing business in Pakistan is "going through the roof." He revealed that APTMA, in a meeting the same day, decided to approach the prime minister and request urgent relief for the industry. The company, which began trading in textiles in the early 1900s, said the labour-intensive segment faced sustained margin pressures from regional competition, a stronger rupee, rising fabric costs, higher energy tariffs, and tax changes such as an increase in advance turnover tax. These factors eroded the cost structure, causing prolonged losses.
"The apparel segment internationally is commoditised, with fierce competition pushing Pakistan into a 'race to zero' on prices, resulting in thin margins and unviable exports under the current tax regime," said AKD textile analyst Usama R Gurmani.
For GATM, the impact is neutral-to-positive given its vertically integrated operations and profitable retail segment. Analysts expect other companies to realign towards high-margin products and operational efficiency.
Inam pointed out the regional disadvantage, saying Pakistani exporters pay 12-14 cents per unit of electricity, while Indian mills pay 5-8 cents. He added that the sector has imported modern machinery, some as recently as 2022, which could generate $7 billion in exports if supported with cheaper power and lower interest rates. "This machinery is currently sitting idle," he lamented.
The strategic closure will reduce losses, lower borrowing, and improve cash flow, strengthening the company's financial position, GATM said, which was established in 1953. An industry source, however, suggested internal family issues may also have influenced the decision. While acknowledging sector challenges, the source said the textile industry overall has survived with government support.