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Wednesday, June 20, 2012

Textile exports likely to drop 30%

Lahore Pakistan: With the number of days a factory staying shut rising due to ever-increasing energy outages, textile exports are likely to dip 30%.
The drop in May will take overall exports to hardly $12 billion against the projected $16 billion, says All Pakistan Textile Mills Association (Aptma) Chairman Mohsin Aziz.
The huge spike in outage has dropped the revenue to $800-900 million from an average of more than a billion dollars posted in the last two months, said Aziz.
He said that persistent electricity and gas cut to the industry has plummeted production levels to minimal levels.
Minor improvement in the energy crisis during the last two months jacked up exports to $1.1 billion per month but it was still not enough to recover the annual shortfall.
Non Performing Loans (NPLs) of the industry have also reached more than 30% of its portfolio, which is quite alarming and the prime cause of drop in local sales and exports, said Aziz. The industry would not come out of sluggish mode until and unless its issues are properly addressed by the government, he added.
“Five days a week gas supply to the textile industry is imperative for the sector to function properly,” said Aziz.
Pakistan is losing exports while regional competitor Bangladesh has almost doubled its exports in the last two years to $23 billion annually.


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