Chinese postpone investment in Pakistan's textile industry
Source: Business Recorder Date: 2008-02-20
Chinese investors have put on hold their planned investment in the textile sector of Pakistan, because of the political instability and deteriorating economic conditions, official sources told Business Recorder on Feb.14.
According to the officials, China had agreed to set up industries in proposed garment cities in Faisalabad, Lahore and Karachi following an offer by Pakistan under free trade agreement (FTA), but the gradually worsening political and economic conditions of Pakistan had forced them to postpone the investment.
The quality of the export products of Pakistan is not up to the mark as compared to its neighbours like Bangladesh and India. The unskilled labour is one of the major obstacles in improving the quality of our export products whereas competition in the international market is increasing by the each passing day.
"The main purpose of the offer to Chinese investors was to train unskilled labour for improving the quality of export products. It was quite possible that after establishing textile industry here, China would be inclined to import some of Pakistan yarn", the officials disclosed.
Pakistan has been facing a wave of suicide attacks and bomb blasts. According to an estimate, there were eight suicide bomb attacks till now in 2008. In 2007, Pakistan was considered as the most insecure country after Iraq, but now, unfortunately, Pakistan has seen more violence than Iraq. Apart from insecurity, the economic conditions too are also not favourable to encourage any foreign investor.
Not only that power tariff is high almost, 70 percent of our textile industries were closed just because of the excessive power rates. The invisible losses due to load shedding and power outages are adding to the cost of textile products.
The textile industry is left with no option but to depend on the water tanker mafia in Karachi that is the hub of the textile production in the country. Gas prices have gone up by 48 percent since January 2005.
Pakistani manufacturers do not have any dearth of foreign export orders, but the prices offered by the foreign importers are not reasonable due to high unit cost of production resulting from higher labour, utility and financial costs.
