LAHORE, Pakistan — With President Pervez Musharraf promising general elections in January, Pakistan’s textile and apparel executives said the turmoil caused by the state of emergency has calmed enough for them to reassure importers the crisis will not affect their textile production and shipments.
“Things are slowly improving compared to last week when the emergency was first declared,” said Shahid Kamil Butt, chief executive officer of Shahkam Industries here, a vertically integrated knitwear exporter with a capacity of 65,000 dozen garments a month that employs 5,000 people. “We now have some clarity and direction as to where the political situation is headed, whereas earlier not knowing the situation did not allow us to explain our future plans to our clients. At least now we have some concrete base.”
Taking an optimistic stance, Kamil Butt said: “Now that we know the emergency will not be a long, drawn out affair, we can confidently reassure importers. Pakistan is still a very competitively priced market with acceptable quality and a strong raw material base. With the appreciation of the Indian rupee and Chinese product recalls, U.S. importers are looking for reasons to place their orders in Pakistan. Political stability will allow them to do so.”
However, Tariq Hameed, a director of Prime Service Group Textiles, Kasur, said, “Strikes have a greater affect on units located outside of the city of Lahore. Political parties have labor unions affiliated with them and if the parties call a strike, then the unions follow it, impeding the progress of order fulfillment. Once an importer has opened [a letter of credit], you have to fulfill it, regardless of disruptions. If you miss these targets, importers go to India and Bangladesh, two countries that have taken a lot of our business. Frankly, Pakistan’s textile sector is in a bad slump. The cost of production is way too high. The emergency is just the cherry on the cake.”
Prime Service Group Textiles manufactures knitwear for Delta Fashion Apparel, custom-made shirts for designer Janine Giorgenti, based in New York, and denim jeans for Delta Garments. In addition, Prime Service has been working with the European market for nearly 20 years.
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Hameed said that mills that are 100 percent export-based are suffering more compared with those that also supply the local market. Many spinning and knitting mills have closed down operations in the recent past.
“Only the big guns, companies that have several vertically integrated mills under one ownership, such as Nishat Textiles and Kohinoor Textiles, both based in Lahore, and that have around half a million spindles production base are doing most of the export. Single mill owners have higher costs of production and their smaller units are no longer economically viable,” he contended.
All Pakistan Textile Manufacturers Association (Punjab) chairman Samir Saigol said there were two ways of looking at the current textile situation during the state of emergency. “One is in regards to importers who have already been working with us. They understand that this is an emergency of a constitutional and political nature and not a business emergency,” he said.
“We hope it will be business as usual,” continued Saigol. “Anything that disrupts the flow of traffic and goods should hopefully be kept to a minimum. There may be minor delays in shipments but, in my opinion, I think they will averted.
“The other is in regards to importers who have not worked with Pakistan mills as yet. We have to work hard as exporters to make sure that their perception of the situation is the true one [and not one hyped up by the media]. It’s more challenging for the mills to get accurate and timely information across to them.”
Though Musharraf promised on Sunday to shed position as Army chief of staff and hold general elections by Jan. 9, he has so far given no date when the state of emergency will be lifted.
Pakistan’s opposition parties point out Musharraf’s sweeping powers due to the suspension of the country’s constitution and the state of emergency have already led to thousands of arrests and a ban on rallies. The Attorney General has also said military courts will now try civilians on charges ranging from treason to inciting public unrest.