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SWOT ANYLASIS OF TWO TEXTILE COMPANIES

OF PAKISTAN

Nishat Group
The Nishat Group* Mian Muhammad Mansha Yaha is the captain of this splendid ship
having around 30 companies on board. Mansha, who owns the Muslim Commercial
Bank as well, is now setting up a billion rupee ($ 17 m) paper sack project too. He is one
of the richest Pakistanis around. Nishat Group was country's 15th richest family in 1970,
6th in 1990 and Number 1 in 1997. Mansha is on the board of nearly 50 companies.
Chinioti by clan, Mansha is married to Yousaf Saigol's daughter.

He is deemed to have made investments in many bourses, currency and metal exchanges
both within and outside Pakistan. He has had his share of luck on many occasions in life
and has recently been awarded Pakistan's highest civil award by President Musharraf. He
could have bought the United Bank too, but then who doesn't have adversaries. Nishat
Group of comprises of textiles, cement, leasing, insurance and management companies. If
Mansha was bitten by Bhutto's nationalization stint of 1970, his friends think he was
compensated by Nawaz Sharif's denationalization programme to a very good effect.
There is no stopping Mansha and he is still on the move!

The history of Nishat Group dates back to 1951, when Mian Muhammad Yahya founded
Nishat Mills Limited.

This man of vision, courage and integrity, Mian Mohammad Yahya was born in 1918 in
Chiniot. In 1947 when he was running leather business in Calcutta, he witnessed by the
momentous changes that swept the Indo-Pak subcontinent.

This is story of success through sheer hard work and an undaunted spirit of enterprise.
Beginning with a cotton export house, he soon branched out in to ginning, cotton and jute
textiles, chemicals and insurance. He was elected Chairman of all Pakistan Textile Mills
Association. He died in 1969, at the age of 51 having achieved so much in so short time.

After almost half a century of undaunted success, Nishat group is among the leading
business houses of the country and ranks among the top 5 groups in terms of assets and
sales revenue. The group has its roots firmly planted into four core business namely

Textiles

Power Generation

Banking

Cement

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TEXTILES

The textile business is further subdivided into 2-textile division:

Nishat Faislabad

Nishat Chunian

The textile capacity of the group is the largest in the country. An addition of 20,000 new
spindles, 100 new air jet looms and new dyeing plants has increased the existing capacity
of 242,000 spindles, 740 looms and dyeing and finishing capacity of 5 million meters.
The largest exporters of textile products from Pakistan, for more then decade!

POWER GENERATION

Nishat group has also been a pioneer in power generation in the private sector of the
country. Nishat setup the first power generation unit in the private sector in 1995.

CEMENT

In 1992, Nishat Group acquired D.G Khan Cement Company Limited (DGKCC) from
the second largest project of the group and is ideally located in the heart of the country,
with easy access to transportation all over Pakistan. DGKCC unit No. 1 has a capacity of
2,200 tons per day. A new unit heaving the capacity of 3,300 tons was setup in 1997.

International Finance Corporation and common Wealth Development Corporation have


financed this unit. With the addition of unit No.2, DGKCC has become the largest
manufacturer of cement in Pakistan.

BANK

In 1991, Nishat Group ventured into the financial sector through the acquisition of
Muslim commercial Bank. MCB has grown ever since and is now the largest bank in the
private sector. MCB has a network of over 1200 branches employing over 12,000 people.

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The Company
Nishat Mills Limited is a public Limited Company incorporated in Pakistan under the
Companies Act, 1913(Now Companies Ordinance, 1984) and listed on Stock Exchanges
in Pakistan

Nishat Mills

Nishat Mills Limited (“Nishat”) is a public company incorporated in Pakistan and listed
on all three Pakistani stock exchanges. Nishat is engaged in textile manufacturing.

Which involves spinning, combing, weaving, bleaching, dyeing, and printing, stitching,
buying, and selling of textiles? They deal with yarn, linen, cloth and other goods
including fabrics made from raw cotton, synthetic fiber and cloth.

The Company is engaged in the business of textile manufacturing and of spinning,


combing, weaving, bleaching, dyeing printing, stitching, buying, selling and otherwise
dealing in yarn, linen, cloth and other goods and fabrics made from raw cotton, synthetic
fiber and cloth, and to generate, accumulate, distribute and supply electricity.

Company is providing quality products to its customers within the Pakistan and outside
the Pakistan. Presently company is exporting its all kinds if apparel products.

Major competitors
Nishat competitors are

Crescent

Chenab

Arzoo

Alkarms

Sitara

Kohinoor

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Amtex

But main competitors of Nishat Mill are

• Crescent Textile Mills


• Chenab Textile

SWOT Analysis
Strengths:

• ISO 9001-2000:

• Strong Security System

• High quality product

• Latest mechanized machinery.

• Tremendous market positioning

• Highly qualified and skilled management

• Highly Motivated Workforce

• Adequate financial resources

• Competitive advantage

• Equipped with MIS System

• Own power generation plant

Weaknesses:

• High cost of production

• Centralized decision making

• Weak image in the international market

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• Small international market share

• Less promotional activities

• Lack of benefits and rewards for the employees

Opportunity:

• Organization Can expand product lines

• Organization Can capture new market segments around the


world

• Organization Can reduce the cost by proper utilization of


resources

• Organization Can hire more well-educated and experienced


person

  

Threats:

• New Entry of competitors

• Buyer needs demands changes

• Political instability

• Changed of government policies

• Globally Economic instabilit

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Detail of SWOT Analysis
Strengths:
• ISO 9001-2000:

Nishat textile is certified under ISO 9001-2000 and so it meets the requirement of
international standard and has a value in the mind of concern people.

• Strong Security System

Nishat textile limited has a greater security system. There are different hidden security
cameras which capture the all moments.

• OKTEX 100:

Nishat is also Oktex 100 certified its mean that Nishat is satisfied to not using
hazard chemical using.

• High quality product

Nishat textile limited using advance technology like they have modern machinery by
which the quality of product produced is very high.

• Latest mechanized machinery.

They are using modern looms which they have purchased from Japan and France. And by
using that latest machinery the productivity of the employees are very high.

• Tremendous market positioning

Nishat textile is one of the pioneer textiles in the Pakistan so it got the position in the
mind of its customer. And being an old textile company people are loyal with it. Nishat
has a better position in the mind of its customers.

• Highly qualified and skilled management

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The management of Nishat is skilled they have hired the foreign graduate people in their
management and also experienced people from all over the country.

• Highly Motivated Workforce

They are providing better pay to their employees and also bonus to them which motivate
the workforce and they are doing well at work setting.

• Adequate financial resources

The owner of the Nishat is one of the richest persons of the Pakistan and they have more
plant and investment in other industries like cement, Bank, They have adequate financial
resources to meet their requirements.

• Competitive advantage

Because it is an old textile and it has still keep its position in the textile market on all
others competitors in the nation wide which is its competitive advantage.

• Equipped with MIS System

They have a management information system by which the departments and employees
are connect with each other and they have a data ware house by which they can share
their resources easily.

• Own power generation plant

They have own power generation plant and Nishat is the pioneer in the private
organization who start the power generation. And also selling to the WAPDA its
produced power.

Weaknesses:

• High cost of production

The production cost is high because of not properly utilization of its resources.

• Centralized decision making

The decisions are made by the upper management which is weakness of the Nishat
because they have no proper idea about the situation and their decision can be not fruitful
for the company.

• Weak image in the international market

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Because of the other textile specialized countries like China, Bangladesh etc the
international image in the textile sector is very weak. Those countries providing cheap
product to the market then Pakistan’s textile industries.

• Small international market share

Although Nishat has very strong in the national wide but it has small market share
in the global textile industry due to the sound competitors like china, and
Bangladesh etc

• Less promotional activities

The advertising and promotional cost of the Nishat textile is very low it can take
advantage for more turnouts.

• Lack of benefits and rewards for the employees

Some facilities that other providing to their employees like Transport and medical fee etc
Nishat not providing to their employees because of which the productivity of the
employees decrease.

Opportunity:

• Organization Can expand product lines

Currently the Nishat not dealing in knitwear they can expand their product line by
producing knitwear. They have plants and the extra cost for the production will be low
for Nishat. And they also have better market repute.

• Organization Can reduce the cost by proper utilization of resources

If the cost of different matters which is not utilizing properly is controlled by the Nishat
management they can produce more in a few costs. It has to develop a further systematic
process for controlling and managing resources.

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• Organization Can hire more well-educated and experienced person

They can take advantages by hiring more skilled people and they should hire young, fresh
and energetic staff for their betterment.

Threats:

• Buyer needs demands changes

Because of the research and development the design and the product of Nishat is just
satisfactory as compare to competitors in the globally and they are not fulfilling the
demand of customer.

• Political instability

Political instability effects the Nishat because of the quota system the company can be
restrict by the government to export.

• Changed of government policies

Government policies are changing day to day so it is a threat for the Nishat to survive in
such a changeable situation.

• Globally Economic instability

Because of the economic instability the Nishat affected a lot. Dumping system which is
rising on daily basis in the world can create many problems for the company and any
uncertainty in the world like 9/11 may affect also the overall export.

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PEST Analysis
Political Instability.

The political situation of Pakistan is not satisfactory. Due to the rapid change in the
Government every government sets its own new trade policies.

Govt. should apply sustainable policies for the beneficial of the exporters as well as the
investors.

Economic situation:

The economic condition of Pakistan can also affect the foreign investors increasing
inflation rate make the cost of production high and thus reduce the profit margin of the
investor.

Social situation:

The change in the lifestyle of the people affects the growing demand of the NTM
products. The change in the lifestyle and needs in different demographics also affect the
demand of the customers.

Due to all these changes NTM is performing excellent for the excellence organization as
well as for the customer.

Technological factor:

Technological advancement in all the sectors of the country has changed the entire socio-
economic environment. Especially in the textile sector there is a lot of technological
development.

NTM Excellent computerized machines and devices are installed in the NTM \has made
extension in its present setup by installation of well advanced technology imported from
Japan China and France.

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Conclusion
 

Nishat Mills Limited is one of the leading groups in Pakistan. The system, the
management style, the policies & decentralized decision making environment is really
remarkable. This report is basically an attempt to identify the areas which need to be
improved.

In this era of technology, the “Information” is the key to success in the business. This
means that the successful businessman will be who will have the right information at the
right time. This comment leads to the conclusion that the Information Sharing Process
should really be improved.

The overall analysis is indicating that the company’s progress has mainly attained
through dedication of employees. The effectiveness of its management, their willingness
to take advantage of opportunities and face challenges of changing economic picture, this
all contributes to the very much improved and sound position of company. This is really
appreciable for the devotion and hard work of all the employees of the compa

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Banero textiles mills
Introduction
Established in 1982, Umer Group of Companies headquartered in Karachi, Pakistan,
today enjoys an annual turnover of 9 billion Pakistani rupees – approximately US $150
million. The group has invested more than US $10 million in recent years to expand its
textile facilities to meet the international demand for its yarns and fabrics. The Umer
Group is involved in textile, power generation, footwear, and tannery and construction
activities. The textile group comprises of three companies: Bhanero Textile Mills Ltd.,
Faisal Spinning Mills Ltd, and Blessed Textile Ltd., all three operating both spinning and
weaving facilities. The spinning and weaving mills are equipped with state-of-the-art
laboratory equipment to test every step of the spinning process to ensure high quality.

Products
Bhanero textile produces yarn for the domestic industry, in-house consumption and
export to the European Union and Far East. They also produce yarn using organic cotton,
linen cotton and are certified vendors for supima, DuPont and Cotton USA.

Installed capacity
Bhanero Textile mills have a total of five spinning mills with an installed capacity of
140,000 spindles supported by the latest European and Japanese machinery. Bhanero
textile mills weaving mills feature more than 500 air-jet weaving machines from Japan
and Belgium. Greige fabrics – produced for sheeting, denim and apparel – range from
170 centimeters to 340 centimeters in width. The weaving mills produced over 6 Million
meters of fabric monthly.

Vision

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“A Premier Quality Company, Providing Quality Products and Maintaining an Excellent
Level Of Ethical and
Professional Standards.”
Mission
“To become a leading manufacturer of textile products in the International & local
markets and to explore
new era to Achieve the highest level of success.”

SWOT Analysis

STRENGTHS
• State of the art equipment
Bhanero Textile Mills limited have imported the latest machinery from Europe
and Japan. Their machinery comprises of equipment used in spinning and weaving.
Bhanero textile mills weaving mills feature more than 500 air-jet weaving machines from
Japan and Belgium. Greige fabrics – produced for sheeting, denim and apparel – range
from 170 centimeters to 340 centimeters in width. The weaving mills produced over 6
Million meters of fabric monthly. Therefore, their products are capable of meeting
international standards of weaving, dyeing and printing, for example using dyes that do
not irritate the skin. This is being done to get a competitive edge over rival firms so that
when the WTO promulgates free economy in the whole world, BTML will have no
problem in competing with international competitors.

• Diverse product range


` Bhanero Textile has built a reputation for manufacturing high quality and diverse
products and this is displayed in their product line. They have high-end products like bed-
sheets, pillow cases, curtains, and fashion wear which are exported only, as well as
medium-end clothing products like organic cotton, linen cotton which cater to the men
and women’s preferences respectively for design and fashion.

• Availability of cheap labor


Although their workers are paid better than other workers in the same industry,
their wage rate is still much lower than what workers get in other countries. This, coupled
with their modern machinery, gives them the competitive edge over rival firms in the
global marketplace.

• Access to high quality cotton


Bahnero Textiles produces yarn for its fabrics, as it has a composite spinning unit,
for its medium-end products it uses the short staple cotton. Short staple cotton is a

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category of cotton which is readily available in Pakistan and which is of a very high
quality. Al-Karam can use this category of cotton in its textiles for use in the
composite plant for processing.

Weaknesses

• Weak R&D facilities


There is hardly any investment in research and development in the Bhanero
Textiles, or indeed in any other Pakistani industry, which puts Pakistani textile
companies at a significant disadvantage in the world forum. Pakistan’s main
competitors, India and China, on the other hand have been investing heavily in BMR
for a longer period of time and so have infrastructure already in place to exploit the
situation that is expected to arise in 2005 with the abolishment of quotas.

• Lack of HR development
Modern technology in the textile sector requires educated and trained technicians.
Similarly, modern management techniques are a major need, particularly in areas of
Marketing, Finance and Human Resource Management

• Centralized decision making


The decisions are made by the upper management which is weakness of the
BTML because they have no proper idea about the situation and their decision can be
not fruitful for the company. The work culture in BTML textiles is like that of a
traditional ‘Seth’ owned company

• Small international market share


Although Bhanero has strong market share nation wide but it has small market
share in the global textile industry due to the sound
competitors like china, and Bangladesh etc

• Weak Brand Name

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Bhanero Textiles still don’t have established big name for themselves in the
textiles and garments industry. Their brand name is not very strong in the Pakistani mass
and industrial market as well as in the international market.

Opportunities

• Organization can expand product lines


Bhanero Textile not dealing in knitwear they can expand their product line by
producing knitwear. They have plants and the extra cost for the production will be
low for BTML, And they also have better market repute.

• Organization can capture untapped market segments


from around the world
The company has the opportunity to capture the untapped market segment like all
other firm in the industry are having the same opportunity. The local and international
untapped segments have much potential for the company to exploit them.

• Organization can reduce the cost by proper utilization of


resources
If the cost of different matters which is not utilizing properly is controlled by the
Bhanero Textile management can reduce its cost by efficiently utilizing the resource
that are not utilized properly and by introducing the improved inventory management
standards.

• Big opportunities in the local low-end market


The low-end market is very much lucrative for the company to capture it as much
of the textile companies are not producing products for that segment of market.

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Threats
• Political & Economic instability
Political & economic instability effects Bhanero Textile because the exports are
dependent on the socio-economic conditions of the country if the country is not
performing well company can suffer loses and due to the quota system the company
can be restricted by the government to export.

• Globally Economic instability


Because of the global economic instability the export of Pakistan textile sector
have gone down which also have affected BTML in worse way. Dumping system
which is rising on daily basis in the world can create many problems for the company
and any uncertainty in the world like 9/11 may affect also the overall export.

• Tough international and national competitors


Textile industry in Pakistan is very completive locally so the tough competition is
faced by Bhanero Textile mills in the local market and in the international market
BTML facing tough competition from China, India and Bangladesh.

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PEST Analysis
Political instability
The political situation of Pakistan is not stable and after the war on terror it has gone
worse especially for the business sector, and due to inconsistent policies of government
every new government set different trade policies with make difficult for the businesses
to grow and be consistent in their performance. Govt. should apply sustainable policies
for the beneficial of the exporters as well as the investors.

Economic situation
The economic condition of Pakistan affect the textile industry directly and due to week
economic condition textile industry is also not performing well. Increasing inflation rate
make the cost of production high and thus reduce the profit margin of the investor.

Social situation
The change in the lifestyle of the people affects the demand of BTML product and
especially the demand for exports is affected by the changing fashions and style in the
importing countries so the company is needed to be contemporary to meet the changing
demand of customers.

Technological factor
Technological advancement in all the sectors of the country has changed the entire socio-
economic environment. Especially in the textile sector there is a lot of technological
development, but we still need more development to meet the demand of outside world.

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SWOT Analysis of the Textile Industry of
Pakistan10 Oct 2009 - Pakistan - FREE REPORTS

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The textile and clothing sector is regarded as the engine of growth for many developing countries in
Asia, since it accounts for around 45 percent of developed markets imports from the developing
countries.

Pakistan’s textile industry ranks amongst the top in the world. Pakistan is world’s fourth largest
producer of cotton, the third largest consumer of the same, sixth largest importer of raw cotton and
first class exporter of cotton yarn.

This industrial sector in Pakistan has been playing a pivotal role in the national economy. Cotton
based textiles contribute almost 60% to the total exports, accounts for 46% of the total
manufacturing and provides employment to 39% manufacturing labor force. The availability of
cheap labor and basic raw cotton as raw material for textile industry has played the principal role
in the growth of the Cotton Textile Industry in Pakistan.

Importance of textile industry in


Pakistan’s Economy
2007-08
2006-07
(July-Feb)
Share in Total Exports 61.1 53.8
Share in manufacturing 45 46
Share in employment 38 39
Share in GDP 8.5 8.5
Textile exports $ 6.6 billion $ 6.3 billion
Investment in textile $ 6.4 billion $ 7.0 billion
Source: Textile Commissioner’s Organization.

Based on abundant supply of indigenous cotton, textile is the leading sector of industrial
manufacturing and depends on agriculture for supply of raw material. Therefore, whatever
happens to cotton crop is likely to affect the performance of textile sector.

Textile production is comprised of cotton ginning, cotton yarn, cotton fabric, fabric processing
(grey dyed- printed), home textiles, towels, hosiery & knitwear and readymade garments. These
components are being produced both in the large scale organized sector as well as in
unorganized cottage/small and medium units.

An anti-dumping of 5.8% has been imposed on Pakistan by the European Union, which has put
Pakistan in a desperate position to match competitors like Bangladesh, India, China, Sri-Lanky
and Vietnam.

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Growth of Cotton Textile Industry in Pakistan
Installed capacity (in 000) Working capacity (in 000)
Growth
Growth Growth Growth Growth Growth
Period Unit Spindle Rotor Loom Spindle Rotor Loom
% % % % %
%
1997-
442 8,368 1.68 150 4.90 10 0 6,631 1.42 80 -8.05 4 -20.0
98
1998-
442 8,932 0.29 166 10.67 10 6,671 0.60 66 17.50 5 25.0
99
1999-
443 4,477 1.01 150 -9.64 10 0 6,825 2.31 66 0 4 -20.0
00
2000-
444 8,601 1.46 146 -2.67 10 0 6,913 1.29 70 6.60 4 0
01
2001-
450 9,060 5.34 141 -3.42 10 0 7,440 7.62 66v -5.71 5 25.0
02
2002-
453 9,260 2.21 148 4.96 10 0 7,676 3.17 70 6.06 5 0
03
2003-
456 9,952 3.59 146 -1.35 10 0 8,009 4.34 66 -5.71 4 -20.0
04
2004-
458 10,485 9.31 155 6.16 9 -10.00 8,492 6.03 79 19.70 4 0.0
05
2005-
461 10,437 -0.46 155 0.00 9 -11.11 9,415 10.87 77 -2.53 4 0.0
05
2006-
461 10,513 0.73 150 -3.23 8 0 7,989 -15.15 70 -9.09 3 -25.0
07
Source: Textile Commissioner’s Organization

Current Scenario of the textile Industry


Pakistan has a very low share of the international textile market and due to the economic slow
down in US and Europe, Pakistan’s textiles exports are also declining as they are mostly
dependent on these two markets. China tops the US market with a share of 36% followed by
Bangladesh 21%, India 18%, Morocco 19% and Pakistan 13%. South Korea has lost 20% market
share of the US market. In the European market, China tops again with a share of 29%, Vietnam
28%, India 19% and Pakistan only 1.5% while the Philippines had lost 11% of the market.

According to APTMA, textile exports have declined by about 20% in 2008. The industry is bracing
for more trouble ahead with continuing crises of electricity and gas, international market access,
global economic slowdown, and adverse travel advisories. APTMA, Pakistan s spinning industry
association established for the promotion and protection of the textile industry, says that the high
cost of finance because of the nation s tight monetary policy has added to their continuing woes.

SWOT
The SWOT analysis on the Pakistan’s textile industry is given here for the interest of readers. In
this way we would identify the weaknesses in the textile industry and find the alternative solutions
and remedies so as to make the textile industry competitive and efficient against our biggest
challengers, India and China and against the emerging markets such as Bangladesh and Vietnam

Strength
1. Raw material base

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Pakistan has high self sufficiency in raw material and is the fourth largest producer of cotton.
Abundant use of cotton resources has made the Textile industry of Pakistan move towards the
area of industrialization.

2. Labor
Cheap labor has always been the backbone of the economy of Pakistan. Cheap and ample
supply of labor strengthens the industrial and agriculture sector of the country. Around 39% of the
labor force works in the textile sector. As Karl Marx said, that we have to use the “army of labor”
present in the country for productive means. Thus cheap and abundant labor means low cost of
production.

3. Rich heritage
Due to cultural diversity and rich heritage, designers come up with new different and attractive
designs which are appreciated worldwide. Our culture comprises of Sindhi, Punjabi, Balochi and
Pushtoo values. Also we are also influenced by the Indian culture through the media exposure,
which of course gives the Pakistani designers an inspiration and taste of Karnataka, Rajhastani
styles, etc. This varied culture and fusion among these two neighbours gives inspiration to the
designers to give their best in terms of styles, creativity and fashion.

4. Domestic market
he recent shift of the population from the agrarian society to the urban areas, increased income
levels and growth of the population raised the domestic demand. This means more factories more
manufacturing units, more supply and more labor.

Weaknesses
1. Research & Development (R&D)
Developed countries are using the technology of biotechnology and genetic engineering to
increase the quality and quantity of their cotton production. They are able to grow colored cotton,
organic cotton and several different varieties cotton to added value to the textile chain. In
Pakistan, there is very some research done on small scale by private companies to invent
modified cotton fibers. Practically no efforts are being made by the APTMA in the R&D of the
textile industry to enhance the quality of its products, upgrade the technology used, and
encourage effective methods of production in order to compete internationally. Instead the
industry suffers lack of latest means of production and falling cotton crop output every year. Due
to low quality of cotton crop, profitability decreases and the farmer switch to the other crop such as
sugar cane, maize and thus the cotton production decreases.

2. More dependence on cotton


As the textile sector is heavily dependent on cotton production, low cultivation of cotton will
deteriorate the textile industry. On the other hand, Pakistan lacks expertise in the development,
production and marketing of synthetic products and fabrics required for items like swimwear,
skiwear and industrial apparel. So far Pakistan has been unable to diversify in the export of
textiles and is heavily dependent on single fibre, that is cotton and its blends. This dependence on
single crop economy is restricting the diversification of exports from Pakistan.

3. Labor productivity
Despite of the abundant supply of the labor, productivity of the labor is very low. According to a
study by Federal Adviser on textiles, the regional competitors of Pakistan take 75 minutes to
complete and produce one piece of cloth whereas we take 133 minutes for the same work. We
also waste 30% in finishing and 12% in washing.” European buyers recommended that we should
cut our costs up to 45% in sewing by getting more efficient.

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Labor productivity can be improved by giving the labor appropriate training with the advancement
of technology so as to make them more efficient and with lower wastage of resources. In China an
average 70 hours of training are given to labor to enhance their expertise.

4. Poor infrastructure
The important resources and infrastructure, such as adequate of supply of water, continuous
supply of electricity and gas, efficient logistics and transportation, tax structure, raw material
supply are all basic requirements for the development of an industrial base. However, on the other
hand, the industry is faced with rising charges of the energy sector, which increases the cost of
production, making it difficult to compete with the other regional rivals.

5. Poor quality standards


With the exception of big and leading units who comply with global quality standards in textiles,
most of the medium and small sized units can not ensure the reliable and consistent quality
standards. Some of these textile units import second hand machinery from China, India, Korea,
and Taiwan with no checks and balances on the quality of the machinery parts and tools.
Preference is only given to the cheap and workable machinery with no concern of the quality of
the machine, therefore, resulting in poor quality of the end product.

The industry can generate more profit by adding more value to the product, as value can be
measured in terms of quality, increased per unit price, etc. Pakistan’s textile industry should focus
on latest material handling techniques and should train workers. The inability to timely modernize
the equipment, machinery and labor has led to the decline of Pakistani textile competitiveness.

6. Unstable political situation


Political unrest, strikes and terrorism have critically affected the economy of Pakistan. Frequent
changing of the government has adversely maligned the policies of the textile sector. According to
the World Trade Review “Pakistan has failed to take necessary steps needed to meet post Multi-
Fiber Agreement (MFA) challenges for its textile industry owing to lack of political will by the
successive governments.”

In 1978 World Bank surveyed the Pakistan textile industry and reported many deficiencies in this
sector. It also gave certain measures to resolve these issues, but unfortunately all these problems
still persist and the industry is still unable to keep its pace with the international market.
Successive governments lacked the will to reform human resources and adapt the marketing
techniques, that resulted present scenario in this industry.

7. System orientation and supply chain


Nowadays, customers are very systematic in their work and the expect the same professionalism
from their vendors. Unfortunately, we lack this capability and are not competent to struggle in the
international business, thus losing many opportunities.

On the other hand supply chain management is rarely implemented. We are disorganized,
disconnected and distorted. Time management is very much important aspect in the business and
buyers expect on time delivery to match the retail launch of the Spring/ Summer or Autumn/Winter
seasonal collections on time. Delayed delivery of export orders result increase in cost due to fines
by the buyers and at times losing business altogether due to the breach the order contract.

Opportunities
1. Pakistan Textile City

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Pakistan Textile City in Port Qasim, Karachi with an area of 1250 acres, will be completed in 2011
as a private public sector joint venture. The main purpose of the textile city is to provide the textile
industry with the world class infrastructure to meet the global competitiveness and challenges and
as to provide value added textile industrial zone. Its main features include one way window
operation, constant supplies of gas and water, and uninterrupted power supply.

2. Marketing
Targeting the unexplored export markets with the help of aggressive sales and marketing will pave
the way for the textile growth. It’s all about hunting your opportunities with the handful of colorful
lollipops. If we make investment in our sales force and train them in the fine art of marketing textile
products, we can capture an much bigger market share from other smaller competitors.

3. Collaboration with foreign companies


By making partners with the foreign companies, we will be able to learn a lot from them in terms
system orientation, supply chain and it would be feasible to import latest technology. We can also
reduce our costs, comply with the international standards, add value to our products, easiness in
marketing our products in different foreign regions, improved labor and thus catching up with our
regional competitors.

4. Re-engineering of production system


Information technology has a crucial role in manufacturing sector. Acquiring state of the art
machinery is though very much expensive, but a very fruitful and necessary measure to stay
competitive in the long run. It is the level of trust, the exporter builds with its customers by giving
them flawless products, made on state of the art machinery. Once this trust is developed, there is
no other way than any unforeseen exception, that you may lose a customer to another competitor.
Therefore, its highly recommended to produce with great efficiency, minimizing the wastage of the
raw material, energy resources and thus reducing the cost of production.

5. Producing high value products


It’s better to export yarn than raw cotton. Similarly it’s better to export finished fabric than to export
grey fabric (raw fabric). Furthermore it’s very much feasible to export readymade garments than to
only fabrics. What makes the latter better is the value added and subsequent increase in per unit
price.

Therefore, the textile industry should focus on the finished products so as to create more value in
their products and reap larger margin of profits. The industry should also diversify into other areas
such as technical textiles and nonwovens in order decrease its dependence on conventional and
commodity textiles, which is highly sensitive to per unit price and volume for the profit margin.

6. Image building of Pakistan to attract FDI


Security measures should be taken to facilitate the buyers and investors to visit Pakistan for
investments. Secure business environment must be needed to attract golden sparrows to facilitate
business dealings and building positive image of Pakistan that they can rely upon.

7. Reducing the cost of business.


China and India are much cheaper in labor, raw material and utilities as compared with Pakistan.
Rising inflation also increase the cost of production. We have to control these unnecessary costs if
we have to survive in the middle of the two giants of the textile sector in the world.

Threats
1. New competitors

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Pakistan is facing new competitors in textile sector such as Bangladesh, Vietnam and Turkey.
Though we cannot avoid competition but we can always stay ahead of them by reforming our
strategies and educating our entrepreneurs so as to move one step forward in every aspect.

2. Phasing out of quota system


As the quota system is ruled out by WTO, there is a threat by the Chinese and Indian
manufacturers to gain most of the market share. We have high costs, low labor productivity and
inefficient production processes.

3. Fashion life cycle


Fashion changes day by day these days. Media has so much penetrated in our daily lives that we
easily adapt ourselves as it wants us to. This has resulted in shortening the fashion lifecycle thus
increasing the fashion risk.

Now the buyer does not want to wait long for his consignment because he is insecure that by the
time it will reach to him he will lost its demand due to change in fashion. Therefore, they prefer to
buy from neighboring countries even at higher cost to get their products instantly rather than to
wait weeks or months for their consignments to reach them.

Conclusion
Textile industry is the backbone of the Pakistan’s economy. We have to seriously analyze its
strengths and weakness so as to make the textile industry more competent among its rivals. What
we really need here is to work out the plan and to implement it accordingly and although much
work has to be done by Government of Pakistan, it also the responsibility of the entrepreneurs to
cooperate and foresee the challenges and opportunities ahead. We can always win the race as it
is never too late to safeguard and grow this vital and promising sector of our economy.

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