Import of spinning machinery soar despite power shortages in Pakistan

The surge in spinning machinery import witnessed in Pakistan. Although the All Pakistan Textile Mills Association claims that around 100 spinning mills in the country have closed down as the spinning industry is facing acute power and energy shortage.

But spinning industry in Pakistan has registered the highest addition of spindles in the past six years, adding 546,000 spindles during 2013, according the International Textile Machinery Federation (ITMF).

While, Industry insiders say that letters of credit for another 500,000 spindles have already been opened and the machines have started reaching Pakistan. This, according to them, is in addition to the 400,000 spindles that a Chinese company is relocating in Faisalabad and another 200,000 being relocated by another Chinese company at the Bin Qasim Industrial Park. They said the after the addition of over 1.6 million spindles, the number of spindles in the country would increase to 13.6 million.

According to ITMF, China imported 6.21 million spindles in 2013, followed by 2.19 million spindles imported by India and 546,000 added by Pakistan. For the first time in the last eight years Bangladesh did not import any spindle for its spinning industry.

The addition of spindles in the industry during acute power shortages gives credence to the view that operating the spinning industry is viable even from self-generation. Industry insiders point out that the main burden faced by the spinning sector was the 10 percent increase in the rupee’s value against the dollar. Minus this factor the industry was still viable. It cannot bear the combined impact of higher energy charges, 20 percent higher wages and 10 percent revaluation of rupee.

As far as shuttle-less looms are concerned, Pakistani weavers did not add any new machine in 2013. According to Industry experts, this would further broaden the structural imbalance in the textile industry. Pakistan is already producing surplus yarn, which it has to export because local weavers lack the capacity to use that yarn. With the addition of 1.6 million spindles the production of yarn would be further enhanced. As yarn is the lowest value-added product in the textile value chain and the inability of the domestic industry to consume this yarn would provide advantageous to Pakistan’s competitors in the region.

As per the ITMF data, in 2013 China added 54,830 shuttles less looms in its industry. India added 1,060 and Bangladesh 1,600 shuttle-less looms during the same period. ITMF statistics reveal that from 2006 to 2013 China added 49.17 million spindles and 378,363 shuttles less looms. India during the same period increased its spinning capacity by 18.42 million spindles, adding 46,881 shuttles less looms. During the same period Pakistan added 2.72 million spindles and 5,644 shuttles-less looms in its textile industry. Bangladesh increased the number of spindles by 2.96 million and its shuttles-less looms by 30,204.

Thus, during the 2006-13 periods Pakistan’s investment in the textile sector has been the lowest in the region. Even Bangladesh managed to add more spindles despite producing not a single kg of cotton. Its addition of more value added weaving sector was five times more than that of Pakistan.