Shutdown starves apparel industry of yarn, fabric
LAHORE, Dec 26: The shutdown of 190 large-scale textile factories across Punjab because of total disconnection of power supplies to them has already started disrupting the supply of yarn and fabric to the value-added, small- to medium-scale apparel industry.
“We are not getting the supplies of our raw material due to the large-scale closure of spinning, weaving and processing industry in the province,” Ijaz Khokhar, Chief Coordinator of the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) told Dawn by telephone from Sialkot.
“Majority of the apparel (woven garments and knitwear) industry comprises small- to medium-sized units and cannot afford to stock raw material for more than one week. Our stocks are already depleting because of
disruption to value supply chain on account of closure of spinning, weaving and processing for the last four days,” he said.
“Even immediate restoration of power supplies to our suppliers will not be able to save us from losses on account of shipment delays and cancelled orders because of piling up of backlog with the upstream textile industry.
The possible closure of the value-added industry due to raw material shortages will adversely hurt our exports.”
According to Khurram Mukhtar, Chairman of the Khurrianwala Industrial Estate Association in district Faisalabad, the electricity supplies to at least 190 large-scale spinning, weaving and processing factories in Lahore, Faisalabad, Sheikhupura and Multan have so far been cut off.
“The ministry of water and power has cut off electricity supplies to the factories with self-generation, exempting from blackout those without alternate generation arrangements. But the problem is that we cannot operate our captive power plants because we do not have gas for that.
This has resulted in complete halt to production capacity at the factories whose electricity connections have been cut off,” Khurram told Dawn from Faisalabad.
Ijaz said the suspension of electricity to the textile industry in Punjab would send a very bad signal to foreign buyers as they start placing orders for 2013 from next month.
“We already have a negative image in the world and buyers are reluctant to come to Pakistan due to security concerns, energy shortages and other reasons. The current decision of the government is going to cost us our orders and result in decrease in exports,” he warned. Pakistan Textile Forum Chairman Asghar Ali from Faisalabad warned of massive industrial closure in case the government failed to address the issue of gas and electricity supplies by Friday.
“The continuation of gas and electricity load-shedding will compel us to stop paying taxes and bills,” he warned.
He said the textile industry in Faisalabad would be forced to come out onto streets from the morning of Dec 29. He said the widespread closure of industrial units would bring jobless workers on to the streets if the situation wasn’t remedied.
He said the energy crisis would impact upon 450 units and more than 2.5 million workers in Faisalabad alone. He said around 80 per cent of the textile industry was located in Punjab and employed 15 million people. “We fear a 25 per cent cut in our export targets due to the present energy crisis,” he added.
An Aptma spokesman said the textile industry in Punjab had incurred production loss of $125 million since disconnection of electricity and gas supplies over the last five days.
“The industry is losing $25 million a day due to capacity closure. It is unprecedented in the history of the textile industry that mills have totally been deprived of energy supplies altogether.
Energy constitutes 35 per cent of the conversion costs in spinning, weaving and processing mills. But no energy is available for either self-generation or through the system on independent feeders,” he said in a statement.