The textile industry is Pakistan’s largest manufacturing industry, accounting for 8% of GDP. Cotton and textile products account for 60% of Pakistan’s export share. Pakistan is the fourth largest cotton producer in the world and the third largest spinning country in Asia, with a spinning capacity of 12 million spindles.
From 2007/2008 to 2012/2013, the average annual growth rate of Pakistan’s yarn production reached 9.7%. Its yarn is known for its high quality and low price. In Pakistan, most spinning companies use local cotton, and some also use Indian cotton. Due to cotton quality restrictions, the average count of Pakistani yarn does not exceed 24S. In the product structure, low-count pure cotton yarn accounts for 47.1% of yarn output, medium-count pure cotton yarn accounts for 23.7%, and high-count pure cotton yarn accounts for 5.4%. Blended yarn accounts for 23.8%.
Pakistan once occupied a dominant position in China’s cotton yarn imports. Its market share in 2012 was about 39%, making it China’s largest cotton yarn supplier. Due to capacity constraints and weak Chinese demand for low-count pure cotton yarn, Pakistan is no longer a standout since last year. China’s demand for yarns above 32S has increased, and Indian yarns have gradually taken a dominant position. In 2013, Pakistan was overtaken by India, and its share of China’s cotton yarn imports dropped to 28%, and continued to decline in 2014. In recent years, China’s yarn imports have increased significantly, and the situation of Pakistani spinning mills is generally good. The investment plans of the Chinese government and investors in Pakistan’s energy, textile and apparel and related industries will help more Pakistani yarns be exported to China.
Now Pakistan’s textile industry is expanding its capacity. In the past six years, Pakistan’s cotton yarn exports have experienced an average annual growth rate of 15%. In 2012/2013, cotton yarn exports were the largest, with an export value of US$2.25 billion. In the past six months, the textile industry has borrowed 41 billion rupees from banks to invest in new machinery and equipment. Among these 41 billion rupees, the spinning industry’s loan amount reached 36 billion rupees. Siro spinning yarn produced in Pakistan has a competitive advantage in the Chinese market, and most of its products are exported to China. Siro spinning yarn has become the mainstream variety of yarn imported from Pakistan in China. Affected by this demand, related production capacity has been continuously expanded, and there are also textile companies investing in the production of vortex spinning yarn.
New policies to encourage the development of the textile industry in the next five years are being planned, with the goal of increasing Pakistan’s textile exports to US$26 billion. The new policy will focus on increasing the added value of products, paying attention to the quality of cotton seeds, training 120,000 practitioners, and providing tax incentives for imported advanced equipment. Since cotton production in Pakistan is low, the government will work to double cotton production as land conditions are already available and technology can be introduced from other countries.
Factors such as cheap land resources, low cotton prices and labor costs, preferential foreign investment policies, zero tariffs on imported cotton, and preferential export policies to many countries make investing in Pakistan’s textile industry very attractive. Not long ago, the Masood Textile and Garment Industrial Park invested by Ruyi Group held a groundbreaking ceremony. The project invested 6 billion yuan and invested in the production of high-end cotton yarn, high-end jacquard fabrics, printing and dyeing fabrics, denim fabrics and knitted fabrics. After the project is put into production, it can be realized Sales revenue is 14 billion yuan. The investment of large Chinese textile groups in Pakistan reflects their confidence in China-Pakistan cooperation.
(Sajid Latif Sheikh, Manager of Pakistan Sadar Company)
