Pakistan

High Value Added Consumer Products Sector Review

Definition and scale of sector

Why the sector was chosen in the West Midlands

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Textile Sector Report - September 2009

Textile sector being the biggest manufacturing sector in Pakistan offers a lot of opportunities for British companies. Pakistan relies heavily on its textile sector as it accounts for nearly 45% of the country's total manufacturing output and around 8% of the GDP. Textile and clothing products constitute around 55% of Pakistan's exports and this sector generates employment for around 40% of the manufacturing labour force. The sector is continuously changing and growing and thus needs a constant flow of new, innovative inputs like high tech machinery, improved processes that can reduce costs and an advanced skilled workforce. British retailers can source high quality textile products from Pakistan and undertake joint research projects with the various textile institutes and companies. There is also a huge scope in setting up modern fashion and design institutes.
Pakistan was a big importer of textile machinery from the UK, however that has now declined and the main UK exports in this area are in the form of second hand machinery and lab testing equipment. Although there is demand for some specialist products that enhance supply chain efficiency. Pakistan now imports majority of its textile machinery from Germany, Japan, China and Italy.
Currently the textile sector is facing problems on all fronts. Production is being hampered by the frequent power cuts due to power shortages. Furthermore, new investment is slow at the moment due to high interest rates and low business activity. The industry is facing competition from other developing countries like Bangladesh, India and China in its major export markets i.e. the EU and the USA. Also the current recession in the West has resulted in a slow down in demand for textile products.

Source: UK Trade & Investment (UKTI)

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Textile Industry III - September 2009

The Government has issued SRO for declaring textile machinery and equipment import at zero rated, a key demand of textile sector. The textile sector welcomed it and said it is a right step in right direction. They said it is the first step to implement Textile Policy, recently announced by the Ministry of Textile.
For the last few years, import of textile machinery plunged heavily, reflecting the poor state of affairs in the textile sector.
Government charged a minimum customs duty of 5 percent on the import of textile machinery and equipment and in certain cases; it goes up further high due to multiple surcharges. However, according to the estimates of Finance Ministry, national exchequer would bear a loss of Rs10 billion if the custom duty on textile machinery and equipment were abolished, a highly exaggerated figure.
The Finance Ministry said that in the current budget, the amount was not allocated for giving this relief on the customs duty, therefore, the decision should be implemented from the start of next calendar year or should be included in the next budget.

Source: IAR (Industrial Advisory Reports)

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Textile Industry II - September 2009

America is the major market of Pakistani textiles that are declining and would take time to correct the situation. It is evident from the statement of the US President Barack Obama who warned the world and said that the US economy had a "long way" to go before it reached complete healthy financial recovery. The present position is that the US budget deficit over the next 10 years would reach $9.05 trillion, an increase of $2 trillion from its previous estimate. The 2009 budget deficit trimmed to $1.58trillion from a previous estimate of $1.84 trillion.
Pakistan textile industry is facing tough competition from the regional competitors. However, future of the textile industry seems bright as lots of opportunities are available in the era of globalization, if availed. The government is striving hard to envisage the process of improvement in all the segments of textile sector and will be synergistic for industry to boost its share in global trade. In this regard a five year Textile Policy 2009-14 was announced recently.

Source: IAR (Industrial Advisory Reports)

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Textile Industry I - August 2009

Exports are likely to improve in the near future due to improved global economic situation, said Governor State Bank of Pakistan.
To meet the challenges SBP has taken a number of measures to support country's exports which include one year extension in mark up, subsidy for spinning sector, provision of 100 percent financing to banks against export finance provided to exporters, provision of one year moratorium on loans obtained under the Long Term Financing Facility, extension in the period of refinancing under Export Finance Scheme (EFS) and provision of EFS to some categories of cotton fabrics and provision of LTFF to various spinning sectors and removal of margin requirement on imports.
The governor clearly said that Pakistan is currently under an IMF program, therefore, the government has limited scope to provide relief to exporters. Nevertheless, the government has announced a number of measures in the budget and the recently announced trade and textile policies to support exporters.

Source: IAR (Industrial Advisory Reports)

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Essential Oils I - April 2009

Pakistan is blessed with an excellent climate and agriculture land quality. Both these factors contribute to the opportunity of production of highest grade essential oils in Pakistan. The local climatic and soil conditions alter the chemotype (chemical composition) of essential oil in plants and make this essential oil most desirable.
An essential oil is an aromatic volatile substance, named after the French 'essence', not the English 'essential', extracted by distillation or expression from a single botanical species. The resulting oil should have nothing added either during or after this process.
Essential oils are used as flavours and fragrances for food, soap, detergents, perfumes, lotions. The highly concentrated essences extracted from various parts of the plant are called essential oil. Oil have been valued for their therapeutic and perfumery qualities throughout history by many different cultures. They were used in Aromatherapy treatments a curative and preventative aid to enhance body resistance. While some similarity in health benefits exists between oils, i.e., many florals are good for relaxation, but keep in mind that not all oils suit all people. An oil's scent may be very pleasing for some and not for other, therefore he or she may not benefit from it's use.

Source: IAR (Industrial Advisory Reports)

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Essential Oils II - April 2009

Essential oils can be extracted from Sweet Basil, Benzoin, Bergamot, Black Pepper, Atlas Cedarwood, Roman Chamomile Cinnamon, Citronella, Clary Sage, Clove, Cypress, Blue Gum Eucalyptus, Sweet Fennel, Frankincense, Geranium, Ginger, Grapefruit, Jasmine, Juniperberry, Lavender, Lemon, Lemongrass, True Marjoram, May Chang, Myrrh, Neroli, Sweet Orange, Peppermint, Scots Pine, Rose, Rosemary, Sandalwood, Tea Tree, Wild Red Thyme, Vetiver and Ylang Ylang.
Essential oils can also be produced from Basil (Tulsi) and Cornmint (Podina) that shows opportunity of investment to setup an essential oil distillation unit producing Basil and Cornmint oils. The plants for this project would be specially grown for continously providing raw material.
Most commonly, the essence is extracted from the plant using a technique called 'distillation'. Since plants contain a very small amount of this precious oil, several hundred kilograms of plant material may be needed to produce a single ounce of oil.

Source: IAR (Industrial Advisory Reports)

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Pakistan lags behind in Technical Textiles- Journal of Managment and social Science - October 2007

This paper highlights and demonstrates the technical and economical impact of technical textiles in the industrially developed countries and their future contribution to the development of economics of newly developing countries, such as China, South East Asia, and North Africa etc. Pakistan still lags behind in technical textile products as neither the government nor the textile industry has made any serious efforts towards synchronizing textile products with the emerging needs of the world market by developing higher value-added products. Although the textile sector is the backbone of Pakistan's economy, the Government as well as the textile industry has kept their focus on conventional textiles, ignoring technical textiles and knowledge-based products. A special focus is placed on the application of technical textiles related automotive,medical, construction/civil engineering and sportswear's fields.

Source: Journal of Managment and Social Sciences

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The Sports Goods sector in Pakistan - September 2007

The sports goods sector of Pakistan has a long and strong history, spanning well over 120 years. It was built, and is still thriving today, on its skilled craftsmen.

There have been very few comprehensive studies prepared on the sector. This is surprising in view of the sector's significance in the country's exports. This report provides an insight into the workings of the sector with an emphasis on the shortcomings and obstacles facing individual companies, the role of the Government and its export services, and, lastly, some recommendations to improve the performance of the sector.

Source: European Commission - International Trade Centre

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The Furniture Sector in Pakistan - August 2007

This study sets the wooden furniture industry of Pakistan into a global context. It describes the implications of the WTO agreements on the sector as well as the key obstacles, shortcomings and opportunities for the country's exports.

The study also reviews Pakistan's export services and their usefulness to the furniture sector. Finally, conclusions and recommendations have been put together, also integrating some very recent developments (Furniture village), which indicate that Pakistan's furniture industry is taking its future into its own hands.

Source: European Commission - International Trade Centre

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Wooden Furniture I - July 2007

Despite five percent reduction in import duty, announced in the budget 2007-08, the prices of raw material used in furniture manufacturers have not declined in the local markets. The import duty on furniture has been reduced from 20 to 15 percent. Majority of the furniture manufacturers complaining that they are facing losses owing to the gradual rise in cost of production, which has reduced their sales and profits.

During the last six months, the prices of locally manufactured furniture surged by 10 to 15 percent, hurting the consumers and they became reluctant to purchase furniture. Moreover, the industry is also facing tough competition in the local markets with imported Chinese furniture.

Source: IAR (Industrial Advisory Reports)

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Wooden Furniture - II - July 2007

There is a great scope of setting wooden furniture units in the country. Vast opportunities of export exists as depicted from the figure of table-1 Wooden Furniture - I) that world wooden furniture import increased from $15 billion to $19 billion during 2003-05 and expected to further rose to $45 billion in 2010. If Pakistani manufactures set modern units of wooden furniture the exports can be increased to $1 billion with in a period of 2 to 3 years, instead of 2015 as planned by the government.

Here a pre-investment feasibility is being given, which would help the intended entrepreneur in setting a project of wooden furniture manufacturing. It covers various aspects of project like how to plan, how to start production, marketing, finance and management. The document also provides sectoral information, brief on Government policies and international scenario.

Source: IAR (Industrial Advisory Reports)

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Leather Garments Unit - April 2007

The size of the total global export market of leather garments is estimated to be around $4.92 billion. This makes the business an attractive export opportunity. Pakistan has an inherent advantage due to local availability of quality hides and skins. The country has also developed a large tanning base. As a result, good quality leather for leather garments is easily available.

In addition to easy availability of primary raw material, Pakistan is also well recognized in the international market as a manufacturer of quality leather garments and is ranked third amongst the top three exporters of leather garments in the world. Moreover, because of the presence of large number of leather garments manufacturing units in the country, a pool of trained skilled workers is also available.

Source: IAR (Industrial Advisory Reports)

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Leather Industry - April 2007

Leather and leather products manufactured in Pakistan have a sizeable market around the world. Being an agrain economy, Pakistan has a natural advantage in the area of live stock population, which is the major input (hides and skins) in the leather sector.

During the first half of present financial year, July- December 2006-07, the total exports of leather manufacturers, including leather garments, gloves and other leather manufactures, stood at $ 553.322 million as against to $ 627.315 million in the corresponding period of the last year.

Source: IAR (Industrial Advisory Reports)

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Pakistan Light engineering sector - March 2007

The state of the engineering industry describes the status of industrialization of a country since it portrays the capability to add value to the primary products and of indigenous production of plants and machinery. The developed countries have assigned high priority to the engineering industry in their own country. The range of light engineering goods covers electrical goods, transport equipment, domestic appliances, telecommunication equipment etc. There are about 2,500 registered units and a much larger number in the unorganized sector, with fixed assets of over Rs 100 billion. A number of small industrial units are operating in Karachi, Lahore, Gujarat, Gujranwala and Sialkot.

Source: Board of Investment Pakistan

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Textile Sector- Overview - December 2006

The share of textile industry in the economy along with its contribution to exports,
employment, foreign exchange earnings, investment and value added makes it the single largest manufacturing sector for Pakistan. It contributes around 8.5 percent to GDP, employs 38 percent of the total manufacturing labor force, and contributes between 60-70 percent to total merchandise exports. Indeed, with exports reaching about $8.6 billion in 2004-05, Pakistan is one of the largest textile exporters in the world.

Source: Board of Investment Pakistan

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Essential Oils Industry I - January 2006

Plants of essential oils are used for physical and psychological health and well-being. When one is feeling a little tired after a long day, he/she can take a few sniffs of coriander oil and feel energized and alert or could soak his/her muscles in a warm bath with a few drops of peppermint oil and feel instantly rejuvenated. Or one want to relax and calm the senses on the weekend, just dab some lavender oil on the pulse point and sail through the day without letting anything bother you.

The use of essential oils of plants for physical and psychological health and well-being is what aromatherapy is all about. More and more people are opting for aromatherapy bath salts, soaps, candles, lotions and scrubs for instant rejuvenation and awakening of the senses.

Source: IAR (Industrial Advisory Reports)

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Essential Oils Industry II - January 2006

Pakistan is blessed with an excellent climate and agriculture land quality. Both these factors contribute to the opportunity of production of highest-grade essential oils in Pakistan. The local climatic and soil conditions alter the chemotype (chemical composition) of essential oil in plants and make this essential oil most desirable.

The domestic Pakistani market for essential oils is infinitesimal and represents less than 1 percent of the world market. Therefore, the producers of essential oils in Pakistan would most likely be competing in the world market.

Source: IAR (Industrial Advisory Reports)

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Pakistan Textile Industry: Vision 2005-2010 - March 2005

The textile industry in Pakistan has tremendous potential to grow, provided its comparative advantages are maintained. Pakistan has gradually emerged as world's largest supplier of yarn, with China as one of the major buyers. The domestic consumption of yarn in weaving, knitting and towels industry is rapidly growing as is evident from 14 percent per annum increase in export of value-added textile for last five years.

Pakistan has become one of the largest consumer of US variety Pima cotton for manufacturing fine count value-added yarns to make sophisticated fabrics for use in made-ups for high end of the market.

Source: IAR (Industrial Advisory Reports)

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