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Pakistan Energy Crisis Hinders Textile Sector Growth

Pakistan’s continued energy crisis has caused textile exports to falter in the country.

According to Pakistan’s The Nation, All Pakistan Textile Mills Association (APTMA) central chairman Yasin Siddik said sustainability and growth of the nation’s textile sector are being marred by energy supply constraints and a liquidity crunch. In terms of quantity, yarn exports are down 26 percent and fabric has declined 35 percent during the last three months.

“It has further triggered serious supply chain issues for value added sector right from knitting to woven to the bed-linen, which have consequently failed to avail the GSP plus facility from the EU,” Siddik told The Nation.

An APTMA delegation called on Pakistan’s Minister for Textile Industry Abbas Khan Afridi in a meeting last month, urging the minister to devise a plan to quell the power outages as business is suffering and unemployment is rising as factory owners are forced to cancel work shifts. The delegation also stressed that Pakistan would not be able to take advantage of its newly granted GSP Plus extended by the E.U. without an uninterrupted power supply.

Under the country’s current gas supply schedule, gas is being diverted from textile mills to captive power plants resulting in up to 10-hour shutdowns at the mills.

During the last fiscal year ended in June, textile exports totaled $13.7 billion compared to $13 billion in the previous period, dismal growth considering the country export target for FY14 was a much higher $16 billion.

Siddik said closures forced due to energy supply constraints have caused production capacities to be down between 40 and 50 percent.

APTMA has implored the Pakistan government to ensure uninterrupted electricity for 16 hours a day and gas for 8 hours a day at the Punjab textile mills, where 70 percent of the country’s textile industry is based, and asked that the country’s federal textile policy for 2014-19 include provisions for the industry to overcome structural imbalances.