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Pakistan working hard to boost its textile fortunes

"Amidst all odds, Pakistan’s leading denim maker, Artistic Denim Mills, which operates as a one-stop shop turning cotton into jeans, plans to double its production and has already built a new factory in Pakistan’s financial hub. At a time when many textile companies have shut shop, this really comes as a surprise. Being bullish about the prospects, Faisal Ahmed, CEO, Artistic Denim, says he supplies to retailers such as Zara and Next Plc. Unlike most industrialists, Artistic Denim started by making garments about 25 years ago instead of just shipping spun yarn or fabric. Pakistan is among the top five growers globally. "

Pakistan working hard to boost its textile fortunes

Amidst all odds, Pakistan’s leading denim maker, Artistic Denim Mills, which operates as a one-stop shop turning cotton into jeans, plans to double its production and has already built a new factory in Pakistan’s financial hub. At a time when many textile companies have shut shop, this really comes as a surprise. Being bullish about the prospects, Faisal Ahmed, CEO, Artistic Denim, says he supplies to retailers such as Zara and Next Plc. Unlike most industrialists, Artistic Denim started by making garments about 25 years ago instead of just shipping spun yarn or fabric. Pakistan is among the top five growers globally. Pakistan has been mostly converting cotton into thread and fabric that is shipped East to other Asian countries, which then manufactured into final garment.

Pakistan working hard to boost its textile

With upcoming elections in July, Pakistan government is under pressure to revive exports and would avoid any measure which would lead them to go to the International Monetary Fund for its 13th bailout since 1988. Accounting for half of overseas shipments, the textile industry remains the key for survival.

Pushing up market share

When new countries are emerging and growing their textile expanse, Pakistan’s performance has been deteriorating year after year, falling behind Bangladesh’s 276 per cent increase and 445 per cent in Vietnam, according to World Bank data. India is the second-largest apparel exporter in South Asia after Bangladesh. However, Pakistan has the advantage of homegrown cotton to capitalise on, unlike Bangladesh and Vietnam.

Pakistan is aiming for its first export jump this financial year after giving tax breaks to exporters, in a bid to reverse a three year slump with value added products like denim getting the biggest incentives, said Mohammad Younus Dagha, Secretary at the Commerce Ministry. Ahmed Lakhani, Analyst at Karachi-based JS Global Capital, points out Bangladesh and Vietnam governments are giving huge support to industries, unlike Pakistan. The tax breaks are a good step, but the government needs to decrease electricity tariffs and keep a check on wages. He is skeptical if government is in a position to do that and that’s where incompetency lies.

Majyd Aziz, President of MHG Group feels about 95 per cent of Pakistani exporters’ mentality is waiting for a customer rather than going out and finding them. In the global world, you need integration and economies of scale, if you do that, you make money. Artistic Denim is one of them. It has chased premium brands in Los Angeles that pay more for smaller deliveries to keep changing designs rather than bulk orders. The company said this will help revenues reach as much as eight billion rupees ($72 million) in year ending June with new garment production capacity increasing sales. According to Ahmed, Pakistan’s denim is on an upward trend, despite the larger textile industry being in trouble.

 
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