APTMA urged government to ‘fully’ support export-oriented industries

• Textile sector has performed exceptionally well in the past year. Despite this achievement, the gas/RLNG supply to the Punjab textile sector was shut off.
• Mills are working at less than 75 percent capacity due to insufficient grid electricity and a lack of gas/RLNG supply, resulting in a monthly loss of $250-400 million in exports.
• A drop in production will result in a drop in exports and the need for new loans.

KARACHI: Abdul Rahim Nasir, Chairman of the All Pakistan Textile Mills Association (APTMA), urged the govt on Friday to “fully” support the export-oriented industries.

Chairman APTMA said in a statement that textile is the only sector that keeps expanding and contributing foreign cash into the country, with sales expected to reach $20 billion in June 2022, up from $15.4 billion in June 2021.

According to Nasir, the sector has performed exceptionally well in the past year. Despite this achievement, the gas/RLNG supply to the Punjab textile sector, which was only 25% of required volumes (50 percent of actual use from August to November), was shut off two days prior with the assurance that supply will be restored on Friday, June 3rd, 2022.

However, it has recently been announced that the gas/RLNG supply would not be restored indefinitely.

The irony is that, despite a 59 percent increase in textile exports ($1.69 billion) in May 2022 over May 2021 ($1.06 billion), exports are still undervalued.

Read More: Aptma blasts gas supply shutdown to textile sector

Despite all economic logic, gas/RLNG is regularly provided to non-export businesses such as ceramics, glassware, steel, and others, rather than the export industry.

The government’s decision to stop supplying gas/RLNG to exporters is nonsensical because it is a crucial input for textiles, Pakistan’s single largest export contributor, and the country’s economic future.

Nasir went on to say that the sector has made significant investments in cutting-edge machinery and high-efficiency generation, with over USD $5 billion in growth and modernization investments done in the last 1.5 years.

The potential losses incurred as a result of the gas/RLNG supply being cut down are enormous. On the contrary, if a reliable and constant supply of gas/RLNG is ensured, the industry can reap significant economic benefits from increased exports. Since November 2021, new facilities and expansions have been finished but have yet to get gas or power.

Read More: Aptma for fixing Rs8,000/maund cotton support price

The APTMA strongly urges the government to reestablish the export industry as a top priority and to recognise the significant losses and damage to Pakistan’s economic future that this will entail. A drop in production will result in a drop in exports and the requirement for billions of dollars in new loans, which are already scarce.

Mills are working at less than 75 percent capacity due to insufficient grid electricity and a lack of gas/RLNG supply, resulting in a monthly loss of $250-400 million in exports. This has happened before, with losses that were not and will never be recovered.

Furthermore, most mills currently cannot meet their energy needs for power or gas/RLNG on their own and must rely on both to operate.

It is critical to emphasise that captives’ use of gas/RLNG is not consumptive, but rather economic, in the sense that it results in long-term production with benefits such as job creation and increased exports.

To ensure export-led economic growth, the textile sector demands continuous support, thus continued energy provision will benefit the country as a whole.

Pakistan cannot afford to have an inefficient export-oriented economy, and the gas/RLNG supply and priority must be restored as soon as possible so that exports and economic growth can continue to rise.

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