German Textile Machinery: A seven-decade commitment to Pakistan's textile industry

Pakistan's textile industry has thrived over the years, and its success owes a great deal to the innovative technological solutions provided by German textile machinery suppliers. The strong foundation of the Pakistani textile industry can rightfully be attributed to the technological prowess of German companies. Pakistani textile entrepreneurs and industrialists have embraced the acquisition of cutting-edge global technology to remain competitive in the global textile market.

German textile machinery suppliers have played a pivotal role in the development of Pakistan's textile industry. Companies and brands such as Schlafhorst (Saurer Group), Suessen (Rieter Components), Truetzschler, Dornier, Monforts, Osthoff-Senge, Goller, Brueckner, Thies, Groz Beckert, Mayer & Cie, Stoll, and Karl Mayer have been instrumental in shaping the textile sector in Pakistan. These companies have not only provided state-of-the-art machinery but have also demonstrated a strong commitment to the Pakistani market through extensive after-sales support.

Furthermore, the contribution of German chemical suppliers cannot be overlooked. Companies like Bayer, CHT, DyStar, and many others have been reliable partners, supplying quality chemicals and auxiliaries to Pakistan's textile finishing industry. With the increasing demand for sustainable and eco-friendly textiles, the role of chemical suppliers has become even more vital. These companies have not only provided suitable chemicals but have also played a crucial role in educating the Pakistani textile industry on techniques to achieve sustainable and profitable production.

Pakistan Textile Journal has been a key medium for German companies to engage with and address the rapidly evolving textile industry in Pakistan for over six decades. Some of the earliest advertisers in our publication are still actively present, demonstrating their long-term commitment to the Pakistani market. The journal has witnessed the growth of Pakistan-Germany trade relations through thick and thin, and continues to serve as a platform for disseminating valuable information and promoting industry advancements.

In these challenging times for the Pakistani textile industry, German companies have an opportunity to demonstrate their support and solidarity with their customers. By providing guidance and support, German companies can assist the Pakistani textile industry in navigating new challenges and diversifying into new areas. With their expertise and technological advancements, German companies are well-positioned to guide Pakistan's textile industry towards sustainable growth and profitability.

As the Pakistan-Germany trade partnership in the textile industry continues to evolve, it is crucial for both countries to foster open lines of communication, encourage collaborations, and create a conducive business environment. Through mutual cooperation and shared knowledge, Pakistan and Germany can further strengthen their trade ties, driving innovation, productivity, and sustainable development in the textile sector.

The Pakistan Textile Journal remains committed to promoting the PakistanGermany trade relationship and serving as a reliable source of information for the textile industry. We look forward to the continued collaboration between Pakistani and German companies, driving progress and prosperity in the textile sector for years to come.

1Pakistan Hosiery Manufacturers & Exporters Association (PHMA) asked the Federal Board of Revenue to speed up releasing value-added knitwear industry’s sales tax refunds to help ease up its cash flow, especially for wages to its workers. 2

The exporters are complaining about the inordinate delays in the payment of sales tax refund claims, as the government has stopped releasing all the sales tax refund claims. Thus exporters’ precious liquidity worth billions is compromised, stated Naseer Butt Chairman PHMA North Zone.

3

Mr. Sohail Nisar, Senior Vice Chairman, of Pakistan Yarn Merchants Association (PYMA) earlier this month rejected the recent hike in electricity and gas tariff, and protested against this antibusiness and anti-industry initiative. 4

The Senior Vice Chairman raised concern that in such circumstances, an increase of more than 400 percent in electricity and gas tariff would increase the cost of doing business to an unbearable extent, having disastrous effects on the industries and domestic exports.

Textile Briefs International

1

Bangladesh is the second largest readymade garments exporter in the world but the country’s own fashion industry is suffering due to lack of government support among other factors. Maheen Khan founder-president of the Fashion Design Council of Bangladesh while sharing her concerns said, “Lack of proper planning, work environment, investment, and policy support is the main hurdle for local fashion producers.” from child labor in China. Mei Feng, chairman of the National Advanced Functional Fiber Innovation Center said his organization will collaborate with all parties to develop China’s recycled fibre industry. He was confident that the platform will function well and promote the high-quality development of the textile industry.

3

China has launched a new digital platform to help identify and trace textile products throughout the supply chain. Possibly to address the concerns of Western buyers on the use of cotton produced allegedly

2

The Hong Kong Research Institute of Textiles and Apparel Limited (HKRITA) and The International Iberian Nanotechnology Laboratory (INL) signed a Memorandum of Understanding with the intention of exchanging knowledge about wearable technology and fostering developmental research.

The 4th International Textile Exhibition, also called TEXPO 2023 attracts textile industries all over the world with many industries leaders already committed to visit TEXPO during May. Among which China who is one of the industry leader worldwide has shown a keen interest in the TEXPO as more than 100 Chinese companies has shown interest and made commitment to visit it next month. 6

5 price for cotton is to be fixed at Rs 8,500 per 40kg to give relief to farmers, so that they can begin to cultivate more and more cotton as soon as possible. 7

Mr. Iftikhar Ali Sahu, Secretary of Agriculture, Punjab, at a recent high-level meeting announced that the support

Hugo Boss has signed the Pakistan Accord, underscoring its commitment to the protection of health and safety of garment workers. “At Hugo Boss, we are committed to respecting human rights and safe working standards along our entire value chain and apply this throughout our organization,” said Yves Müller, CFO and COO of Hugo Boss.

4Continuous poor demand for cotton yarn in the local Weaving Industry and global market has started having negative effects on cotton prices throughout India. Many Weaving plants within the country are halting production for 2 -3 days every week because the poor demand has put pressure on the entire value chain and the entire market is facing a payment crisis.

Wash Lab was successfully launched on 20th April 2023 after facing a delay since 2020 because of the global pandemic and other related factors.

6

The University of London and Denim leader Lane Ateliers have launched what they are claiming to be the country’s first state-of-the-art sustainable Research and development washing facility. The sustainable R&D Denim

With the global decline of demand for textiles, the US has also seen a decline in the imports of its textile and apparel industry with Apparel imports declining by 19.7%, while nonapparel imports decreased by 20.7% in the first three months of 2023.

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Vietnam’s exports to the Association of Southeast Asian Nations (ASEAN) hit $10.85 billion in the first four months this year, accounting for 10 per cent of the country’s total.

Pakistan's exports continue to decline, raising concerns of layoffs in the export sector

Pakistan's merchandise exports have experienced a seventh consecutive monthly contraction, with a year-on-year dip of 14.76% to $2.36 billion in March. This decline, coupled with a 9.87% decrease in exports during the first nine months (July to March) of the fiscal year 2022-23, paints a concerning picture for the export sector, fueling fears of potential massive layoffs.

The decline in export proceeds can be attributed to both internal and external factors, leading to apprehensions about the closure of industrial units, particularly in textiles and clothing. Furthermore, imports have also seen a significant drop, falling by 40.25% to $3.82 billion in March and 25.34% to $43.94 billion during the first nine months of the fiscal year.

The trade deficit, however, showed a deceleration of 35.5% between July and March of FY23, amounting to $22.9 billion compared to $35.50 billion during the corresponding period last year. In March, the trade deficit witnessed a substantial decline of 59.75% year-onyear, totaling $1.46 billion.

The downward trend in exports, particularly in textiles and clothing, raises concerns about achieving the export target for the current fiscal year. According to industry leaders, the federal government's lack of strategy and failure to address crucial issues such as working capital shortages and delayed refunds, including sales tax and technology upgradation funds, have contributed to the export decline. The promised faster refund system has also suffered from significant delays, taking several months to process instead of the initially advertised 72 hours.

High financial and energy costs have further added to the challenges faced by the textile industry. Exporters emphasize the need for dialogue with the government to identify and address priorities, as neglecting the sector will hamper its competitiveness and hinder export recovery.

Exporters also cite hurdles in opening letters of credit and political and economic uncertainties as factors deterring buyers from placing orders. They urge the government to provide clear statements to assure foreign buyers that orders will be delivered on time, as building foreign exchange reserves depends heavily on increasing exports.

Exporters predict a 17% decline in exports for April, pointing to the discontinuation of subsidies on electricity and gas for the export sector as a reason for reduced competitiveness in global markets. Additionally, exchange rate instability has been identified as a significant factor contributing to falling exports.

In summary, Pakistan's export sector faces significant challenges, including declining export figures, delayed refunds, rising costs, and exchange rate instability. Urgent attention and effective measures are needed to address these issues and revive the industry to meet export targets and safeguard employment opportunities.

PHMA requests the Federal Board of Revenue for speedy release of value-added knitwear industry’s sales tax refunds

Pakistan Hosiery Manufacturers & Exporters Association (PHMA) has urgently requested the Federal Board of Revenue (FBR) to expedite the release of sales tax refunds for the value-added knitwear industry. The association emphasizes that the timely release of these refunds is crucial for easing the industry's cash flow and ensuring the payment of workers' wages.

Mr. Naseer Butt, Chairman of PHMA North Zone, has raised alarm over the dire financial situation faced by the export-oriented industry. The delay in the release of sales tax refunds has resulted in significant liquidity losses amounting to billions of rupees. Exporters have expressed their discontent with the prolonged processing times and inconvenience caused by the FBR's halt on releasing the refunds.

Despite repeated appeals for assistance, the government's failure to address these issues has exacerbated the challenges faced by the textile industry. The industry has already experienced a sharp decline in exports and foreign exchange earnings, leading to reduced production.

Mr. Butt warns that the government's inaction has pushed the textile industry to the brink of collapse.

Previously, the FBR introduced the FASTER system, which aimed to process refund claims electronically and without delays. The knitwear industry initially welcomed this system, but recent changes, including the involvement of FBR officials in the process, have raised concerns about potential corruption and compromised efficiency.

Mr. Butt urges the FBR Chairman to rectify the technical glitches and flaws in the FASTER system, which have caused substantial delays in the processing of sales tax refunds. The current situation has resulted in significant losses and hindered timely exports, rendering the textile export industry financially unsustainable.

The PHMA Chief highlights various flaws and discrepancies in the refund procedure, exacerbating the grievances of textile exporters. Unfortunately, the FBR has not responded adequately to the demands presented by PHMA. Mr. Butt expresses his disappointment with the government's disregard for the export sector, particularly the value-added textile industry.

He laments the lack of attention from the Prime Minister, emphasizing that textile exports have plummeted by approximately 28% in February 2023. Moreover, during the first eight months of the fiscal year 2023, there has been an overall decline of around 11%, primarily attributed to reduced exports of value-added textile products such as ready-made garments and knitwear. Specifically, there has been a decrease of 16% in knitwear exports, 10% in towel exports, and 9% in bed-wear exports.

The situation calls for urgent intervention and support from the government to revive the struggling textile industry and prevent its imminent collapse.

PYMA rejects government’s recent increase of tariffs

"This significant increase in electricity and gas tariffs is an alarming and detrimental move against businesses and industries," expressed Sohail Nisar, Senior Vice Chairman of the Pakistan Yarn Merchants Association (PYMA). He firmly rejected the recent tariff hike and vehemently protested against what he referred to as an anti-business and antiindustry initiative.

Mr. Nisar highlighted the existing challenges faced by importers of raw materials, particularly the difficulties arising from the increasing dollar rate. Importers have encountered significant losses due to the unavailability of dollars, resulting in the containers of imported raw materials being stuck at ports and incurring heavy demurrage and detention charges.

Given the industry's already severe liquidity crunch and the recent factors affecting exports, the government's decision to increase tariffs by more than 400% could prove to be a fatal blow to an industry that is already suffering greatly.

The Senior Vice Chairman expressed concern that in such circumstances, the exorbitant increase in electricity and gas tariffs would make the cost of doing business unbearable. This would have disastrous effects on industries and domestic exports. Mr. Nisar appealed to Prime Minister Shehbaz Sharif and Federal Minister of Energy Power Division Khurram Dastgir Khan to address the economic crisis by reducing the cost of doing business. Failure to take action would make it exceedingly difficult to conduct business and operate industries, ultimately leading to a negative impact on the country's exports and causing unemployment for millions of workers.

Pakistan faces steep decline in cotton production, imports expected to rise

Pakistan's cotton production has declined by 34% this year, reaching the lowest level in four decades, according to data from the Pakistan Cotton Ginners Association (PCGA). The country produced 4,912,069 bales compared to 7,441,833 bales in the previous season. This significant drop poses challenges for the textile industry, which will need to import approximately 10 million bales to meet its annual demand of 15 million bales.

Import financing issues have further hindered the textile mills, resulting in the lowest mill consumption in over 20 years, at 8.8 million bales. To bridge the gap, mills have signed import agreements for 5.5 million bales and purchased 4,605,449 bales locally. Last year, mills had procured 7,332,000 bales from the domestic market. Additionally, ginners currently hold 301,720 bales in their inventory, significantly higher than the previous year's stock of 93,833 bales.

The decline in cotton arrival is attributed to the devastating impact of flash floods and heavy rains during the last monsoon season, particularly affecting agricultural land in Sindh and Balochistan provinces.

Despite strong international demand, Pakistan's cotton exports have decreased by over 69% this year, with only 4,900 bales of white lint exported compared to 11,000 bales in the previous year. The main destinations for Pakistan's raw cotton exports include the Philippines, Italy, Bangladesh, Greece, and France.

Analyzing the data province-wise, Punjab has witnessed a year-on-year decline of over 32% in cotton output, producing 3,033,050 bales this season compared to 3,928,690 bales in the previous season. Sindh reported a substantial year-on-year loss of over 46%, with lint production totaling 1,879,019 bales this year compared to 3,513,143 bales last year.

Pakistan's cotton production has experienced a downward trend over the years, with the country's per-acre yield contracting to half of the productivity seen in other regional countries. In an effort to reverse this trend, the Economic Coordination Committee (ECC) expressed concern and approved an intervention price of Rs8,500 per 40kg as proposed by the Ministry of National Food Security and Research.

The intervention aims to attract growers towards cotton cultivation. The ECC also formed a cotton price review committee responsible for assessing market prices and proposing interventions on a fortnightly basis.

Punjab to take aggressive measures in hopes of boosting cotton production

The Secretary of Agriculture, Punjab, Mr. Iftikhar Ali Sahu, announced that the support price for cotton will be set at Rs 8,500 per 40kg in order to support farmers and encourage increased cotton cultivation. The decision was made during a high-level meeting attended by various agricultural officials and experts.

During the meeting, Dr. Anjum Ali, Director General Agriculture (Ext & AR), led discussions on the reasons behind the significant decline in cotton production in the province. A strategy was devised to address this issue by promoting cotton cultivation and offering incentives to farmers interested in growing cotton.

Mr. Iftikhar Ali Sahu emphasized the need for effective research and development to develop climate-smart cotton varieties that can withstand the challenges posed by climate change and insect infestations. He also highlighted the importance of utilizing print, electronic, and digital media to raise awareness among farmers about modern cotton production techniques.

To further support cotton farmers, the Punjab government is providing a subsidy of Rs 1,200 per bag on certified seeds of approved cotton varieties. Additionally, biocards will be distributed to farmers through the established bio lab in Punjab to assist in controlling harmful insects.

Hugo Boss signs Pakistan Accord on safety in textile industry

Hugo Boss has signed the Pakistan Accord, underscoring its commitment to the protection of health and safety of garment workers.

As a binding agreement of company and trade union signatories, the Pakistan Accord is an extension of Bangladesh’s 2021 International Accord for Health and Safety in the Textile and Garment Industry. The International Accord is based on the Bangladesh Accord on Fire and Building Safety, established in 2013, resulting from the dramatic tragedy of the Rana Plaza building collapse.

“At Hugo Boss, we are committed to respecting human rights and safe working standards along our entire value chain and apply this throughout our organisation,” said Yves Müller, CFO and COO of Hugo Boss. ”We take the fair and ethical treatment of our employees, suppliers, and partners worldwide very seriously and look forward to supporting the improvement of labour conditions in Pakistan through implementing the Pakistan Accord.”

In the past, Hugo Boss signed the International Accord together with about 190 other garment brands and unions and now additionally committed to the Pakistan Accord, the company said in a press release.

The Pakistan Accord includes all key International Accord features, and promotes workplace and building safety for an initial period of three years through independent inspections, remediation, an independent complaints mechanism and training programmes for employees.

Together with its fellow signatories, Hugo Boss will provide funds to support the successful implementation of the Pakistan Accord and help uphold and improve occupational health and safety measures in Pakistan’s garment and textile sector.

Bangladesh

Bangladesh’s local Industry suffers due to lack of attention from Government

Bangladesh is the second largest readymade garments exporter in the world but the country’s own fashion industry is suffering due to lack of government support among other factors.

The local fashion industry is not growing also due to the lack of proper planning, absence of research and development, low design quality, lack of government policy support and absence of quality teachers and curriculums in the country’s fashion design schools.

Maheen Khan founder-president of Fashion Design Council of Bangladesh while sharing her concerns said, “Lack of proper planning, work environment, investment, and policy support are the main hurdle for local fashion producers.”

Many shopping malls and markets in the country are selling clothing items imported from all over the world, with a large number of smuggled products coming through land ports evading taxes.

SK Saifur Rahman, General Secretary of National Crafts Council of Bangladesh added to this matter and stated, “Bangladesh produces the world’s finest denim and other clothing items. But local fashion houses import fabrics from China and India. Most players in our local fashion industry hanker after making money. Some claim that they make 100 per cent local items, but it is false and they deceive the buyers.”

‘We are now treated like losers. But once, our saris were exported to Indiawe had such a rich tradition and glory.’

Mohammad Kashem, Banarasi Palli

Shop Owners Association secretary said, ‘We are not in a position to save our rich tradition of banarasi saris due to lack of government patronage, including a place for weavers and necessary assistances. We are not happy to sell Indian products, while once, even in the 90’s, we used to export our saris to India. Weavers and handloom industries are on the decline.’

He disclosed that many weavers had, meanwhile, switched to other professions for survival.

‘The Indian government provides subsidy to weavers in the form of subsidised electricity for power looms, but in Bangladesh they fall in the category of commercial use paying high tariff for electricity,’ he despaired.

There is no alternative to government support for reviving the glory of the country’s high quality banarasi saris, he went on to say.

China

China to digitalize their entire supply chain

China has launched a new digital platform to help identify and trace textile products throughout the supply chain. Possibly to address the concerns of Western buyers on the use of cotton produced allegedly from child labor in China.

The online platform will be managed by the China Chemical Fibre Association and National Advanced Functional Fibre Innovation Centre. It will operate under guidance from the Department of Consumer Goods Industry of Ministry of Industry and Information Technology and Suzhou Market Supervision Administration.

Mei Feng, chairman of the National Advanced Functional Fiber Innovation Center said his organization will collaborate with all parties to develop China’s recycled fibre industry. He was confident that the platform will function well and promote the high-quality development of the textile industry.

Adding to this He Yaqiong, director of the Department of Consumer Goods Industry said, “building a certification platform traces the entire life cycle of green fibre products that are conducive to promoting the low-carbon, environmentally friendly and circular development of the industry. He further said that the Ministry would take steps to quickly promote the popularity and recognition of the platform in the industry.”

HONG KONG: HKRITA Signs MoU with INL for a Research on sustainable Future using bio-tech

The Hong Kong Research Institute of Textiles and Apparel Limited (HKRITA) and The International Iberian Nanotechnology Laboratory (INL) signed a Memorandum of Understanding with the intention of exchanging knowledge around wearable technology and fostering developmental research.

The MoU was signed at HKRITA’s Hong Kong seminar, entitled “Smart Manufacturing: A Revolutionary Transformation of the Fashion Industry,” by Paulo Freitas, deputy director-general of INL, and Edwin Keh, chief executive officer of HKRITA.

“Sensor and IoT technologies are already leading to wearable devices that allow monitoring of a variety of biosignals and body related data. INL will work with HKRITA to further exploit new wearable concepts, fabrication, and integration routes aiming at increasing wearable solutions and their wide spread utilization,” Freitas penned at the signing.

The ultimate goal of the partnership is to develop new devices and methods of testing to enhance the performance of wearable tech, which is increasingly becoming an integral part of the lives of many consumers, both socially and occupationally.

HKRITA’s Keh added that “sensor and wearable technologies will make a great impact on our social development, allowing us to explore more possibilities. Our collaboration will generate useful and productive innovations for industry and society.”

The organization has been leading the charge with sustainable textile innovations in Hong Kong, and last year they developed a solution to break up post-consumer cotton-and-polyesterblended fabrics into their constituent fibers which was considered an impossible thing to achieve back then, but HKRITA scientists developed a process that uses only heat, water and less than 5 percent of biodegradable green chemicals to degrade the cotton fibers into cellulose powder and separate them from their polyester counterparts.

India

Textile production halts as demands continues to weaken for Cotton Yarn

The continuous poor demand for cotton yarn in the local weaving industry and the global market is having negative effects on cotton prices across the country. Export demands are declining every day, and the local weaving market is showing little interest in purchasing new stock. Existing stock is not being utilized as before due to the weak global market demand. As a result, major markets in the country, such as the Delhi market and the Ludhiana cotton market, have witnessed a significant price drop of 70 cents USD per kilogram of cotton. With the ongoing weak demand from the weaving industry, many experts believe that the situation is deteriorating.

Numerous weaving plants within the country have been forced to halt production for 2-3 days every week due to the poor demand, which has put pressure on the entire value chain and led to a payment crisis in the market.

Traders in Delhi expressed their concerns, stating that there is no indication of improvement in demand from the weaving industry. The weak demand has created pressure throughout the value chain and has caused a payment crisis, limiting the purchasing capacity of buyers.

Trade sources believe that the weaker sentiment in Indian cotton prices is a result of the global cotton downturn and reduced demand from spinners. The arrival of cotton was observed at 5,000 bales (170 kg each). In Punjab, cotton is being offered at $74 USD per maund, in Haryana at $72 USD per maund, and in upper Rajasthan at $76 USD per maund. In lower Rajasthan, it is sold for $71 USD per candy (356 kg).

United Kingdom

State-of-the-art sustainable R&D washing facility launched in partnership with the University of the Arts London

The University of London and Denim leader Lane Ateliers have launched what they are claiming to be the country’s first state-of-the-art sustainable Research and development washing facility.

The sustainable R&D Denim Wash Lab was successfully launched on 20th April 2023 after facing a delay since 2020 because of the global pandemic and other related factors.

The sustainable lab which is located at Blackhorse Lane Ateliers aims to bring an expertise that has been missing in the country while offering a space to develop unique UK denim aesthetic. The lab will be accessible to students, start-ups, and established brands to explore more sustainable denim wash methods.

The much needed project is backed by local councils including Waltham Forest, Haringey, and Enfield, as well as the London Mayor’s Office.

Usa

US records decline in imports of textile and apparel by 19% in the first quarter of 2023

With the global decline of demand for textile US has also seen a decline in the imports of its textile and apparel industry with Apparel imports decline by 19.7%, while non-apparel imports decreased by 20.7% in the first three months of 2023.

According to the latest reports released by the US department of commerce, both segments experienced a decline, in the first quarter (January till March) of 2023, the US textile imports of apparel peaked at 19.472 billion USD, while non-apparel imports made up to 6.400 billion USD.

Apparel imports recorded a dip of 19.73% compared to the 24.259 billion USD traded in JanuaryMarch 2022, while non-apparel imports declined by 20.71% from 6.4 billion USD for the same duration following year.

It should also be taken into the account that among the top apparel suppliers to the US, the import from any country did not improve. The imports from China dipped by 34.89%, following Vietnam by 24.25%, Pakistan 26.9%, Honduras 15.84%, Bangladesh 13.34% and India 11%.