LAHORE, July 5: Yarn and garments producers on Saturday warned the government of closing down their factories from July 11, as country’s textile industry staggers under the increasing burden of soaring fuel prices and suspension of cash research and development (R&D) support for the value-added apparel sector.

Speaking at a press briefing, Pakistan Hosiery Manufacturers Association (PHMA) leader Shahzad Azam Khan said that the apparel industry would be left with no choice but to close down its manufacturing operations, if R&D was not restored at the existing rate of six per cent.

Former chairman of Pakistan Hosiery Manufacturers Association (PHMA) M I Khurram said that the R&D support was a matter of life and death for the textile apparel industry.

“Instead of taking the high value-added industry on board on the issue of the now suspended R&D support, the government has chosen to consult only those who are in the low value-added sectors.”

“The higher value-added sector needs it more than basic textiles or low value-added sectors.

“We woven garments and knitwear producers and exporters have been urging the government to look into this issue seriously, but nothing substantial has come out so far,” he said.

The government has suspended the cash R&D subsidy for the low to high value-added textile exports from July 1. The apparel sector was receiving the highest six per cent subsidy since April 2005. Later the home textile and printed fabric manufacturers were also allowed the facility at five per cent and three per cent, respectively.

“We were allowed six per cent R&D support only after the previous government realised that our exports had been rendered uncompetitive in the global markets due to the highly subsidised exports from our regional rivals (like India, China and Bangladesh) following the abolition of textile quotas,” Mr Khurram said.

Ijaz Khokhar, former chairman of Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea), said the four-member committee constituted by the government to make recommendations on the R&D distribution consisted of people from the low-value printed fabric sector and the apparel sector was not given representation on it.

“It is natural that the committee will support actions that favour their business.”

He claimed that the committee had recommended 3.5 per cent R&D on exports of $1-15 million, 4.5 per cent on exports of $15-20m, 5.5 per cent on exports of $20-60 million, 7.5 per cent on exports of $60-100 million and nine per cent on exports of above $100 million.

“If this formula is allowed to be applied, it will exterminate small exporters who form 98 per of the entire value-added apparel industry,” he said and called for across the board subsidy for all exporters regardless of the quantum of their exports.

All-Pakistan Textile Association (APTA) chairman Adil Mahmood said most of the spinners have also decided to close down their factories for two days on July 11 and 12, if the government did not withdraw the recent increase of 68pc in gas prices for the industry.

“The spinning industry is already under huge burden of spiking cost of doing businesses, and the current increase would only render us uncompetitive in the world,” he said.

He claimed that All Pakistan Textile Mills Association (Aptma) leaders from Punjab had also assured him of their support to APTA strike call.

A senior Aptma official, who asked not to be named, said that most of its members were considering closing down their mills in case the increase in gas price was not withdrawn.