Facebook Pinterest Search Icon SourcingJournal_horiz Tumbler Twitter Shape photo-camera graph-trend Shape latest-news icon / user

Pakistan Denim Manufacturers Are Cautiously Optimistic About Recovery

Join McKinsey & Company, NewTimes Group, Arvind Limited, Asmara, Google, Bluesign, the Retail Prophet and more at Sourcing Journal’s Virtual Sourcing Summit, R/Evolution: Overhauling Fashion’s Outmoded Supply Chain, Oct 14 & 15.

Most industries in every country have been adversely effected by the coronavirus. In Pakistan, however, the textile industry is among the hardest-hit sectors.

“Pakistan textile industry is a key exporter for the country accounting for more than half of all overseas shipments,” said Tricia Carey, Lenzing’s director of global business development-denim.

In a recent Carved in Blue webinar, Carey moderated a conversation with representatives from denim fabric and garment manufacturers in Pakistan, checking in on the status of their business and how they plan to navigate the challenges that lie ahead.

With more than 200,000 confirmed cases of the coronavirus, the country remains on a “smart lockdown” that requires shopping malls and restaurants to be closed, but essential businesses and export industries have received permission to operate under strict guidelines, explained Hasan Javed, director of Artistic Garment Industries (AGI).

AGI resumed business slowly at the end of April. Initially, Javed said, the main focus was to implement training and awareness sessions held in small groups at the facility about how to conduct work safely under the new guidelines.

“It took some time for everyone to get used to the social distancing rules and the ‘new normal’ as they say,” he said. “Now in the last few months we have gradually ramped up our production, and at the moment we’re running close to 80 percent [capacity].”

The goal for July, Javed added, is to run at close to full strength, both on the fabric and garment side of AGI’s business. “We’re fairly optimistic about the next couple of months,” he said.

Business in Pakistan has improved since April when the country was in a total shutdown, said Rashid Iqbal, Naveena Denim Lahore (NDL) executive director. NDL’s production is running at 40-50 percent capacity and Iqbal expects those numbers to hold steady for July.

Momentum is also building for Azgard Nine Ltd. Ahmed Humayun Shaikh, CEO of Azgard Nine Ltd., said the company is experiencing “a surge of orders,” which he attributes to “pent-up demand for garments, particularly from Europe.”

But he warned that this flurry of orders is fleeting. “I don’t think we can expect the pandemic to actually increase demand so it will settle down at some reduced rate once people get what they need,” Shaikh said.

When markets do finally resume at a normal level, executives anticipate that Pakistan will regain its share and perhaps be in better standing in the global denim market.

“The reason being, when it comes to the supply chain Pakistan is the fifth-largest cotton growing country in the world with a fabric capacity of 500 million meters a year,” Iqbal said. “We’re very ideally placed.”

To fully realize this this opportunity, Iqbal said agility is going to be the “name of the game.”

However, in order to be agile, companies may want to eliminate the number of suppliers essential to production.

As brands recover, Crescent Bahuman Ltd. representative Zaki Saleemi said companies will want to simplify their suppliers and inventories, which may bode well for Pakistan’s crop of vertical denim manufactures.

“We are a lot more vertical than a lot of other countries,” he said. “Vertical is key.”

Shaikh agreed, adding that customers want goods quickly because “they’re nervous and they want to fill the shelves.”

Rebounding sales and new investments in sustainable technologies offer reasons to be optimistic, but mill executives still feel the weight of uncertainty—particularly as Pakistan’s number of confirmed cases rises and with an expected second wave in the fall looming over the industry. That same cautious outlook is being felt at the consumer level, too.

In the near future, Ebru Debbağ, Soorty executive director of global sales and marketing, said the industry will see an “imbalance of supply and demand.”

“We all know that the purchasing power of the customers actually are diminished 40-50 percent,” she said. “The denim industry will shrink before it can grow.”

Related Articles

More from our brands

Access exclusive content Become a Member Today!