Dropped catch: Exports of sports goods may fall short of expectations
Crippling outages, rising production cost has hurt industries.
KARACHI:
Though growth in exports of sports goods of Pakistan remains steady, it may fall short of expectations this year mainly because of crippling electricity shortages, which have frequently disturbed production process at manufacturing concerns, say top industrialists.
Looking at eight-hour loadshedding and low exports in first five months of fiscal year 2011-12, prominent industrialists of Sialkot, the hub of export-based sports industry, fear that the country may not even reach last year’s export level.
Exports of sport goods stood at $310 million in fiscal year 2010-11, up from $275 million in the previous year. However, the country exported goods worth $107.6 million in the first five months (July-November) of the current fiscal year.
Exports in November remained the lowest in five months, close in line with the forecast of the Trade Development Authority of Pakistan (TDAP) CEO that exports would decline in the second half of 2011-12 owing to the power crisis.
The sports industry has shown slow but steady growth in exports over the last five years and annual growth remains in the range of $22 to $44 million.
Experts say the country will not be able to catch up with last year’s total exports of $25.4 billion because of the ongoing power crisis and may fall short by $1 to $2 billion.
Problems of the sports industry are no different from other industries, though it is generally considered a less energy-consuming industry.
The State Bank of Pakistan (SBP), in its second-quarter report on the state of economy released recently, projected annual exports to remain between $24.1 and $24.6 billion in FY12, down from the annual target of $25.8 billion.
Shahid Asghar, Managing Partner of AS Sports, one of the leading producers of cricket paraphernalia, said crippling power outages that went up to eight hours a day had directly hurt production process at the industries.
“I do not think we can keep even our last year’s export level,” Asghar said. “The only way to achieve this is to reduce outages and control continuous increase in cost of production because of which industries are not expanding operations.”
He pointed out that medium-sized sports industries could afford diesel for producing electricity during periods of loadshedding, but smaller ones had no option but to stop operations completely. “These disruptions cause production losses and at the end of the day leads to 20-40% decline in daily production,” he said.
“Our daily diesel expenditure is Rs7,000 and I am saying with full confidence that our story is not different from other sports industries of the city,” he said.
According to Malik Zulfiqar, owner of Malik Sports that exports top cricket and hockey brands of Pakistan, the electricity crisis and increase in cost of production were the two top concerns of the sports industry.
Zulfiqar, who has a worldwide distribution network in 19 countries, said the cost of production and overheads were increasing sharply and were hurting the sports industry badly. “Daily consumption of diesel in my factory is around Rs10,000 and I have no other way to save such expenses,” he argued.
Published in The Express Tribune, March 26th, 2012.
Though growth in exports of sports goods of Pakistan remains steady, it may fall short of expectations this year mainly because of crippling electricity shortages, which have frequently disturbed production process at manufacturing concerns, say top industrialists.
Looking at eight-hour loadshedding and low exports in first five months of fiscal year 2011-12, prominent industrialists of Sialkot, the hub of export-based sports industry, fear that the country may not even reach last year’s export level.
Exports of sport goods stood at $310 million in fiscal year 2010-11, up from $275 million in the previous year. However, the country exported goods worth $107.6 million in the first five months (July-November) of the current fiscal year.
Exports in November remained the lowest in five months, close in line with the forecast of the Trade Development Authority of Pakistan (TDAP) CEO that exports would decline in the second half of 2011-12 owing to the power crisis.
The sports industry has shown slow but steady growth in exports over the last five years and annual growth remains in the range of $22 to $44 million.
Experts say the country will not be able to catch up with last year’s total exports of $25.4 billion because of the ongoing power crisis and may fall short by $1 to $2 billion.
Problems of the sports industry are no different from other industries, though it is generally considered a less energy-consuming industry.
The State Bank of Pakistan (SBP), in its second-quarter report on the state of economy released recently, projected annual exports to remain between $24.1 and $24.6 billion in FY12, down from the annual target of $25.8 billion.
Shahid Asghar, Managing Partner of AS Sports, one of the leading producers of cricket paraphernalia, said crippling power outages that went up to eight hours a day had directly hurt production process at the industries.
“I do not think we can keep even our last year’s export level,” Asghar said. “The only way to achieve this is to reduce outages and control continuous increase in cost of production because of which industries are not expanding operations.”
He pointed out that medium-sized sports industries could afford diesel for producing electricity during periods of loadshedding, but smaller ones had no option but to stop operations completely. “These disruptions cause production losses and at the end of the day leads to 20-40% decline in daily production,” he said.
“Our daily diesel expenditure is Rs7,000 and I am saying with full confidence that our story is not different from other sports industries of the city,” he said.
According to Malik Zulfiqar, owner of Malik Sports that exports top cricket and hockey brands of Pakistan, the electricity crisis and increase in cost of production were the two top concerns of the sports industry.
Zulfiqar, who has a worldwide distribution network in 19 countries, said the cost of production and overheads were increasing sharply and were hurting the sports industry badly. “Daily consumption of diesel in my factory is around Rs10,000 and I have no other way to save such expenses,” he argued.
Published in The Express Tribune, March 26th, 2012.