Page 108.01.2009
Perspective Plan Project Pakistan
Steering Committee Meeting
for
by
26.02.2009
MINISTRY OF TEXTILE INDUSTRY PAKISTAN
DRAFT FINAL REPORT
Page 208.01.2009
MAJOR OBJECTIVES OF THE GHERZI STUDY PROJECT
Perspective Plan Project Pakistan – Steering Committee Meeting 26 February 2009
THE MAJOR OBJECTIVES OF THE PERSPECTIVE PLAN ARE:
To safeguard the Industry
To arrest the decline in Exports
To prepare for the Post Crisis Years
To adjust thinking from “Business as Usual” to the culture of “Immediate Action”
To prepare Recommendations and Action Plans for the further development of Sustainable Textile and Garment Sectors
Page 308.01.2009
MAJOR OBJECTIVES OF THE GHERZI STUDY
Perspective Plan Project Pakistan – Steering Committee Meeting 26 February 2009
The Textile and Garment Sectors in Pakistan have been derailed in line with the Textile and Garment Sectors of other countries
Gherzi has tried to address some of the immediate challenges caused by the crisis during the course of the present contracted project
Page 408.01.2009
THE WORLD ECONOMIC CRISIS; IMPACT ON TEXTILES & CLOTHING WHERE ARE WE TODAY?
Perspective Plan Project Pakistan - Karachi/ Lahore Workshops
“CONSEQUENTLY, ONLY SHORT TERM STRATEGIES CAN BE FOLLOWED”
“THERE ARE NOW NO SUCCESSFUL BUSINESS MODELS TO FOLLOW. STRATEGIES HAVE TO BE REVISED ”
“THE PRESENT ECONOMIC CRISIS HAS DERAILED ALL COUNTRIES’ PLANS”
Page 508.01.2009
WORLD ECONOMIC CRISIS; IMPACT ON TEXTILES and CLOTHING. WHERE ARE WE TODAY?
Perspective Plan Project Pakistan – Steering Committee Meeting 26 February 2009
In place of Growth Oriented Strategies pursued by most countries, the Revised Strategies have to be focused on arresting the decline in exports.
Which are the product segments needing a Protection Strategy?
Where does Pakistan have inherent and sustainable strengths? How can they be protected?
What are the instruments for applying protection?
~ Free Trade Agreements with the US– what is today’s position?
~ For what products has asked for Duty Free Preference?
~ What has been the benefit of the FTAs signed until now?
~ Have the export gains for these products been evaluated?
~ If granted, what would be the impact on export performance?
Page 608.01.2009
THE WORLD ECONOMIC CRISIS; IMPACT ON TEXTILES & CLOTHINGWHERE ARE WE TODAY?
Perspective Plan Project Pakistan – Steering Committee 26 February 2009
1. Global Supply Capacity FAR EXCEEDS World Demand in 2008/09
2. Global Markets: As a result of Globalisation,
15 Retail Buyers control 80% of Textile & Clothing Trade
from 4,000 suppliers.
3. Global Trend – Reducing Demand for an uncertain period resulting in Supply Capacity Closures around the World
YEAR WORLD DEMAND WORLD SUPPLY CAPACITY
2008/09 DECLINE EXCESS CAPACITY
2010 FURTHER DECLINE CAPACITY REDUCTION
2011 DECLINE- at best stable CAPACITY CONSOLIDATION
Page 708.01.2009
THE WORLD ECONOMIC CRISIS; IMPACT ON TEXTILES & CLOTHINGWHERE ARE WE TODAY?
Perspective Plan Project Pakistan – Steering Committee Meeting 26 February 2009
IMPACT ON WORLD MANUFACTURING COMPANIES:
2009: Mill closures
2010: More mill closures
2011 – Hopefully Consolidation
IMPACT ON PAKISTAN MANUCTURING COMPANIES:
2009: Mill closures; job losses* [10% Mills closed; 20% partly closed; 30,000 jobs lost in last 3 months] Estimate of jobs that will be lost in 2009 = 300,000 {industry sources} [*Immediate damage limitation action required]
2010: More mill closures & job looses 2011: Consolidation
Page 808.01.2009
1. The investment bubble following the end of the MFA regime created an over supply capacity in 2007/08 when exports were monopolised by China.
2. The realities for 2007 Exports are: ~ CHINA: US$ 180 bn - target achieved
~ PAKISTAN: US$ 11 bn - target not achieved~ INDIA US$ 20 bn - target not achieved~ BANGLADESH: US$ 11 bn - target achieved
3. Export Targets framed in 2005/06 for some countries are unrealistic for the actual economic situation, e.g.
~ CHINA: US$ 180 bn (with Macao)~ PAKISTAN: US$ 22-25bn [VISION MINTEX(ACGR 13-
18%)~ INDIA: US$ 50 bn [VISION 2012]~ BANGLADESH: US$ 11 bn
Perspective Plan Project Pakistan – Steering Committee Meeting 26 February 2009
THE WORLD ECONOMIC CRISIS: IMPACT ON TEXTILES & CLOTHING WHERE ARE WE TODAY?
Pakistan and other countries had over ambitious export targets ……..
Page 908.01.2009
Completed Questionnaires Submitted to Gherzi
Type of Organization
Perspective Plan Project Pakistan – Steering Committee Meeting 26 February 2009
Number Completed Questionnaires*
Trade Associations 8
Companies 80
Total 88
1
* Note: The study has been based on questionnaires; mill visits were not included in the project
Page 1008.01.2009
THE PAKISTAN TEXTILE AND CLOTHING SECTORS
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
The Textile and Garment Sectors are the Drivers of the Pakistan Economy today and are the potential Engine for Future Growth and for Job Creation
Contributes more than 60% to Exports
Represents about 50% of Pakistan’s Manufacturing Industry over the Formal and Informal Sectors
The Industry employs about 2.85 million persons in links along the Textile Chain from Spinning to Consumer Products representing 38% of jobs in manufacturing.
Indirect jobs in service sectors- Machinery, Dyes & Chemicals, Printing, Packing Materials, Transport, Banking, Insurance, Courier Services, etc
Industry contributes 8.5% to Total GDP
5,000 Textile & Clothing Exporters
Page 1108.01.2009
THE PAKISTAN TEXTILE AND CLOTHING SECTORS: STRENGTHS
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
Indigenous, Short Staple Cotton: 4th largest global producer
Some Companies achieve Best International Practice Standards
Large Spinning Capacity
Large Weaving Capacity – the majority in the Undocumented Sector
High Quality, Wide Width Fabric Dyeing, Printing & Finishing Capacities
Modern, semi-integrated Knitting Mills
Home Textiles – Bed wear, Towels
Major Clothing Sector [Denims & Bottom eights] – growth potential
Competitive Labour Costs
Some companies have positive positions in the export markets
Large Position in the EU and USA Markets
Page 1208.01.2009
THE PAKISTAN TEXTILE and CLOTHING SECTORS: WEAKNESSES
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
Industry did not prepare for the ending of Quotas (2004) –next slide
Country Perception: Law & Order
Country Image: Volume Producer, Basic Products, Low Prices
Cotton Contamination: continues to be a serious issue
Power outages and Gas supply issues disrupt production, add to costs and delay deliveries
The Documented Sector has cost and operating disadvantages compared to the Un-documented Sector
Limited Rotor Spinning and Narrow Width Processing capacities in the Supply Chain
Fabrics for Clothing are mainly limited to Denims & Bottom Weights
Low HR Skills at all levels resulting in Low Productivity- limited mill and institutional training
Page 1308.01.2009
THE PAKISTAN TEXTILE and CLOTHING SECTORS: WEAKNESSES: unlike China, investments started late..
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
TEXTILE MACHINERY IMPORTS: 1999/2000 – 2008/2009 (US$ bn)
Year Investments value % change
1999 – 00 210.952
2000 – 01 370.155 75.47
2001- 02 406.20 89.35
2002 - 03 531.90 30.95
2003 – 04* 597.90 - 12.41
2004 – 05 928.60 - 55.31
2005 – 06 817.24 - 11.99
2006 – 07 502.97 - 38. 45
2007 - 08 438.27 - 12.86
2008 – 09 (Jul – Dec) 347.022 - 37.03
* Quotas ended 31.12 04
Exports of US$ 10 bn a year need annual
investments of US$ 1 bn
Page 1408.01.2009
THE PAKISTAN TEXTILE and CLOTHING SECTORS: WEAKNESSES continued
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
Domestic Market swamped by cheap, smuggled goods, e.g. from China
Many companies have limited knowledge of the export markets’ dynamics, buyers’ specific needs and the strengths / weaknesses of their competitors. This restricts their attractiveness to buyers and contributes to low prices
Reliability in terms of service, honouring delivery dates, quality issues due to political instability, infra-structure, country perception,
Investment Climate – weak due to the recent export performance, uncertainty of the industry’s future
Page 1508.01.2009
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
THE PAKISTAN TEXTILE and CLOTHING SECTORS: CHANGES IN EXPORTS AT THE START OF THE WORLD ECONOMIC CRISIS.
Decline in key products … except Cotton Cloth, Towels & Knit Garments
July-Jan 2007/08
Volume M kg
July-Jan 2007/08
Value M$
July-Jan 2008/09
Volume M kg
July-Jan 2008/09
Value M$
% change Volume
% changeValue
Cotton Yarn 334.5 772.7 295.0 651.2 - 11.8 - 15.7
Other Yarns 12.2 30.2 5.4 13.1 - 55.8 - 56.5
Cotton Cloth 1082.3 1087.5 1229.7 1184.3 13.6 8.9
Bed wear M kg 193.7 1121.5 194.3 1013.4 0.29 - 9.64
Towels M kg 81.8 333.5 103.6 381.3 26.59 14.3
Other Made ups
- 290.7 - 294.4 - 1.3
Tents/Canvas 14.9 46.1 13.0 34.8 - 12.7 - 24.6
Knit Garments 57.4 1090.8 62.5 1094.8 8.8 0.37
RM Garments 21.9 822.3 19.5 724.2 - 10.9 - 11.9
Syn. Fabrics 288.6 263.8 270.1 224.0 - 6.4 - 15.1
Carpets, etc 2.28 127.9 2.1 94.4 - 8.0 - 26.2
Page 1608.01.2009
THE WAY FORWARD: CHALLENGES TO BE ADDRESSED
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
1. Assist the Industry to sustain its existing market shares
2. Synergise all policy initiatives to support the Industry to develop its competitiveness in the changing global environment
3. Focus on Short Term Strategies with result oriented approaches to help companies progress
4. Promotion of the Clothing Sector – the Sector achieved exports of US$ 2.9 bn in 2005 and US$ 2.7 bn in 2008 and has potential to increase foreign currency earnings. This Sector has the possibility to create more than 1 million additional jobs – more than any other sector
Page 1708.01.2009
THE WAY FORWARD: CHALLENGES TO BE ADDRESSED IMMEDIATELY
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
1. Assist the Industry to sustain its existing market shares
Availability of:
Utilities- Power, Gas, Water at international prices, reflecting all changes in oil and gas prices. Stop cross subsidies of all products. Identify areas for continuous supplies at competitive prices.
Raw Materials at competitive prices / delivery times- Cotton, Man Made Fibre, Dyes, Chemicals, Accessories
Finance (capital investments, working capital) at competitive rates
Zero rating of taxes along the Supply Chain
Implementation of the Trade Policy / Budget Initiatives already approved and announced
Page 1808.01.2009
THE WAY FORWARD: CHALLENGES TO BE ADDRESSED
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
2. Synergise all policy initiatives to support the Industry to fully develop its competitiveness in the changing global environment
A single policy for all stakeholders / Ministries to be developed on a “war footing”
“Level Playing Field”
Government to support companies wanting to develop / invest in brands
Review the “cost of doing business”
Foreign Exchange Loss: Identify opportunity to compensate for losses caused when the foreign exchange rate changes adversely in the case of shipments in the pipeline from overseas
Clusters and Mergers: Examine the possibility for setting up ROZs with all facilities (power, gas, water & waste water treatment), to assist exports. ROZs to ensure anti-waste programmes are included.
Page 1908.01.2009
THE WAY FORWARD: CHALLENGES TO BE ADDRESSED
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
3. Focus on Short Term Strategies with result oriented approaches to help companies progress
Productivity increase through training at all levels
Increase in unit value
Diversification – increase product base, including Technical Textiles
Market Access – finalise Free Trade Agreements- Option A; aim for reduced rates as Option B
Education: Industry has too few good managers. Duration of training is long term – facilitate expatriate staff at zero income tax
Infra-Structure – wet/ dry ports, container handling in ports, container prices, shipping lines/ services.
Re-structuring the Industry – The undocumented weaving sector to convert to the documented sector to benefit from ‘Upgrading Support’
Page 2008.01.2009
THE WAY FORWARD: CHALLENGES TO BE ADDRESSED
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
4. Promotion of the Clothing Sector. The Clothing Sector is based on denims & bottom weights (trousers).
There are opportunities to increase these exports
Other garments were made for export earlier, e.g. shirts, but the fabrics are not made locally. The procedures for importing fabrics are costly, time consuming and bureaucratic.
TDAP / SMEDA help clothing companies. What additional support is required to facilitate exports?
~ Assistance with Business Strategies for individual companies
~ “One Stop Shop” import / export procedures – duty free import for re-export (bonded warehouse system)
~ Training Institutes- upgrade: Consider association with international institutes
Page 2108.01.2009
THE WAY FORWARD In this section, these challenges are addressed individually
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
Target Time Frame
Probability %
Action / Responsibility
Ensure supplies of Gas & Power meet the Industry’s needs in terms of price & availability Identify selected areas for continuous supplies Stop cross subsidisation of other industry & agricultural sectors Reduce pilferages of 30% - 40% Water at international prices
2009
2009
2009
20092009
80
50
90
30-4075
MINTEX -Task force of stakeholders
Ditto
Ditto
DittoDitto
1.1 Utilities- Gas & Power
Budget:
Page 2208.01.2009
THE WAY FORWARD In this section, these challenges are addressed individually
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
Target Time Frame
Probability %
Action / Responsibility
To become self-sufficient Project: Achieve Clean Cotton- select
3 areas for trial runs to produce for selected companies
Additional Crops of Organic Cotton as unit value twice normal cotton
Clarify policies on Bt cotton Enforce Provincial Cotton
Standardisation Acts Upgrade cotton research institutes to
increase yields & long staple
To 2015To 2015To 2014
20092009 2019
2015
5010080
10010080
100
MINTEX- Task force of Stakeholders Ditto
Prepare status reportDittoDitto Ditto
Task Force
1.2 Raw Materials - Cotton
Budget:
Page 2308.01.2009
THE WAY FORWARD In this section, these challenges are addressed individually
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
Target Time Frame
Probability %
Action / Responsibility
Ginning: review technology levels / condition of sector
Modernise Gins – “soft loans” Synthetic Fibres – examine
supply and demand- varieties, prices, quantities
Polyester- examine industry supply issues
Duties on MMF to be addressed
Research Institutes to be upgraded
2010
2012
2009
2009
2010
100
100
100
100
100
MINTEX, Prov. Govts.
Consultants
Consultants Study-
1.2 Raw Materials -
Budget:
Page 2408.01.2009
THE WAY FORWARD In this section, these challenges are addressed individually
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
Target Time Frame
Probability %
Action / Responsibility
Consider “Soft Loans for capital investments. 5% lower than commercial bank rates Reduce Bank mark up- Banks charge high interest rates between deposits & lending rates: limit to 4% Working capital loans- convert to longer term facilities where appropriate Financing to Exporters: Financing appears to have been settled at 7.5% with R&D claims settled by 30.06.08
2009
2009
2010
2009
100
100
100
2009
GOP
GOP
GOP
GOP
1.3 Finance at competitive rates
Budget:
Page 2508.01.2009
THE WAY FORWARD In this section, these challenges are addressed individually
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
Target Time Frame
Probability %
Action / Responsibility
APTMA is studying this issue and expects to resolve this shortly. Since R & D Support was removed (as per IMF), studies are underway to consider enhanced duty drawback rates to exporters and allowing duty and tax refunds on inputs [not previously permitted on power, gas, diesel, etc] (Gherzi can compare with systems in other countries Review the tax burden on companies in the Documented Sector to bring it in line with competitors
2009
2009
2009
100
100
100
APTMA
Task Force, GOP
Task Force, consultants
1.4 Zero rating of taxes along the supply chain
Budget:
Page 2608.01.2009
THE WAY FORWARD In this section, these challenges are addressed individually
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
Target Time Frame
Probability %
Action / Responsibility
Implementation of the Trade Policy / Budget initiatives already announced – undertake an audit of all the initiatives to identify the exact situation
2009 100 Taskforce- MINTEX, MOC, MOF
1.5 Implementation of Trade Policy / Budget initiatives
Budget:
Page 2708.01.2009
THE WAY FORWARD In this section, these challenges are addressed individually
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
Target Time Frame
Probability %
Action / Responsibility
Ministries have divergent policies for the same sector, e.g. MINTEX/TDAP. A single policy for all Stakeholders/ Ministries to be developed on a “war footing” Competing countries offer incentives to their manufacturers. Are Pakistan companies disadvantaged? “Level Playing Field Government to support companies wanting to buy brands from foreign companies. Joint-Ventures to make Image change. Review the cost of doing business across the industry
2009
2009
2009
2009
100
100
100
100
GOP
MINTEX
MOF, MOC
Task Force, consultants
2.1 Synergise all policy initiatives…………
Budget:
Page 2808.01.2009
THE WAY FORWARD In this section, these challenges are addressed individually
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
Target Time Frame
Probability %
Action / Responsibility
Productivity increase through training:- (i) Skills Development at Mill Level (ii) Vocational Schools
Increase in Unit Value through new product development. Recruit expatriate staff Diversification, e.g. technical textiles. Product development
Start 2009
2009
Continuous
75
100
100
Mill managers
Mills, R&D
Mills, Research Inst.
3. Focus on Short Term Strategies to help companies progress
Budget:
Page 2908.01.2009
THE WAY FORWARD In this section, these challenges are addressed individually
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
Target Time Frame
Probability %
Action / Responsibility
Market Access- negotiate Free Trade Agreements with countries where we need to increase market shares. As Pakistan is a major importer of US cotton, arrange special re-entry terms for goods. Education: Strengthen educational institutes to match industry’s requirements
2009- ongoing
2009- 2020
90
100
GOP
Task Force, GOP consultants
3. Focus on Short Term Strategies
Budget:
Page 3008.01.2009
THE WAY FORWARD In this section, these challenges are addressed individually
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
Target Time Frame
Probability %
Action / Responsibility
Infra-Structure: Up-gradation of all essential facilities; dry/wet ports, container terminals, container prices, shipping lines/ frequencies, customs practices. Re-structuring the Industry- (i) The Undocumented weaving sector to convert to the Documented Sector to benefit from Upgrading Support
2010
2010
100
70
MINTEX, MOF, MOC, Task Force, consultants
MINTEX
3. Focus on Short Term Strategies
Budget:
Page 3108.01.2009
THE WAY FORWARD In this section, these challenges are addressed individually
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
Target Time Frame
Probability %
Action / Responsibility
Prepare for the Post Crisis Years: There is no better opportunity to invest in new machines than the present. Tax credit to be arranged as the TUF programme in India.The next slide indicates the typical machine types required are to be evaluated
2009 100 GOP
3. Focus on Short Term Strategies
Budget:
Page 3208.01.2009
THE PAKISTAN TEXTILE INDUSTRY – MACHINE INVESTMENTS REQUIRED
Perspective Project Plan Pakistan Steering Committee Meeting 26 February 2009
ANALYSIS SUGGESTS THAT INVESTMENTS IN THE FOLLOWING MACHINE AREAS ARE REQUIRED: Costs, technologies and quantities have yet to be determined.
Automatic Winders, to assist in the production of cleaner yarn
Fancy Yarn Machines
Yarn Dyeing Units
Weaving Preparation
Shuttle less Looms
Narrow Width (165 cms) Dyeing, Printing & Finishing
Garmenting
Accessories
Page 3308.01.2009
THE WAY FORWARD In this section, these challenges are addressed individually
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
Target Time Frame
Probability %
Action / Responsibility
Increase export sales of denims and bottom weights Study opportunities to make/ export other garment products Facilitate all procedures for importing raw materials SMEs – review work now undertaken by SMEDA / TDAP to identify what additional support should be given to companies.
2009
2009
2009
2009
100
100
100
100
MINTEX, TDAP
Mills, MINTEX, TDAPGOP
Task Force
4. Promotion of the Clothing Sector
Budget:
Page 3408.01.2009
TEXTILE and CLOTHING SECTORS; an essential need…….
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
TEXTILE and CLOTHING SECTORS RE-STRUCTURING UNIT – in the Ministry of Textile Industry
Responsible for co-ordination of the Task Forces & their meetings
Task Force Members with the authority to take decisions on behalf of Ministries, Stakeholders and Institutions
Undertaking the required field work and analysis [consultants]
Preparation of all Recommended Action Plans, on the basis of the Task Forces work, and of a budget for each Action Plan
Agreeing the Action Plans and Time Frames needed for complete Implementation
Implementation of the Action Plans
Monitoring all progress- fine tuning, costs/budgets, progress
Maintain a library of all data relating to the Textile & Clothing Sectors and their markets
Page 3508.01.2009
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
CONCLUSION
THE FINDINGS OF THE STUDY HIGHLIGHT THE FACT THAT IMMEDIATE GOVERNMENT INTERVENTION IS REQUIRED ACROSS ASPECTS OF THE INDUSTRY.
ALL STAKEHOLDERS NEED TO BE INVOLVED AND TO REFORMULATE THE TEXTILE AND CLOTHING POLICY THAT TAKES INTO ACCOUNT THE CHANGED MARKET CONDITIONS.
THERE ARE OPPORTUNITIES FOR THE INDUSTRY TO GROW IN THE FUTURE PROVIDED ALL THE PRESENT POLICY ISSUES ARE RESOLVED NOW.
Page 3608.01.2009
Perspective Plan Project Pakistan Steering Committee Meeting 26 February 2009
THE NEXT STEPS
To Finalise Draft Final Report
Gherzi to submit power, water, steam and labour for China, Egypt, India, Bangladesh and Turkey
Complete - The recovery of Labour related and other Federal, Provincial and Local Government Levies from textile Units as “One Window Operations”
Complete - Review the Taxation Policies and the rationalisation of existing taxes and duties.
Page 3708.01.2009
THE WORLD ECONOMIC CRISIS; IMPACT ON TEXTILES & CLOTHING: WHERE ARE WE TODAY?
Perspective Plan Project Pakistan – Steering Committee Meeting 26 February 2009
Pakistan Textile & Clothing Exports: 2007, 2008, 2009 est 2009 & Revised Target
2012 [US$ bn] Product 2007 2008 2009 Target 2012
Cotton Yarn 1.40 1.16 1.05 1.0
Cotton Cloth 1.95 1.62 1.46 1.5
Bed Wear 1.94 1.73 1.50 4.0
Towels 0.57 0.65 0.67 2.0
Garments (woven/ knit) 3.21 3.26 3.20 4.0
Others 0.97 1.21 1.20 1.0
Page 3808.01.2009
Perspective Plan Project Pakistan: Terms of Reference
1. The TOR will address the following three specific points: Draw a Perspective Plan for the Pakistan Textile and Clothing Industry up to
the year 2013 in 2 phases: Phase 1 for the period 2007 to 2013 and Phase 2 for the period 2013 to 2020. [Phase 2 will be a separate proposal to be prepared at the conclusion of Phase 1.]
Suggest measures for reducing the cost of doing business by identifying the various costs and suggest measures for reducing each cost factor.
Propose measures for skills development in the different sectors of the Textile and Clothing Industry, especially in textile processing, garment and home textiles.
Page 3908.01.2009
Perspective Plan Project Pakistan: Terms of Reference
2. In order to achieve the 3 points of the TOR, the consultants will: Identify the market issues that Pakistan exporters need to address Make a SWOT analysis of the Industry Address the need to increase the competitiveness of the Pakistan, Textile
& Clothing Industry keeping in mind the strategies of China, India, Bangladesh, Sri Lanka, etc, to increase their shares of the global markets
Update/ revise Textile Vision 2005 to strengthen the Value Chain in Textiles and Clothing
The recovery of labour related and other Federal, Provincial and Local Government Levies from Textile Units as “One Window” operations
Review the Taxation Policies and the rationalisation of existing taxes & duties
Page 4008.01.2009
Perspective Plan Project Pakistan: Terms of Reference
3. The Phase 1 will be a quick assessment of the situation and preparation of short to medium term plans:
The Market Performance- What are buyers’ views of Pakistan Exporters’
performance in the markets? What is their performance relative to the major competing supply countries? Amongst the aspects to be considered are customer service levels, knowledge of the markets, reliability, response times, quality consistency, new product development, competitiveness and other issues.
Margins: As Pakistan manufacturers have competitively priced, indigenous raw materials and low manufacturing costs, do they achieve competitive product costs and selling prices that earn reasonable margins? If not, why not? Are these issues concerning limited manufacturing efficiencies and productivity levels that need to be addressed? Can these issues be related to management & production operative skills? What other production issues need to be addressed?
Page 4108.01.2009
Perspective Plan Project Pakistan: Terms of Reference
3. The Phase 1 will be a quick assessment of the situation and preparation of short to medium term plans: continued
Access to the Markets- Does Pakistan have access to the global markets as
per competitors through bi/ multi- lateral trade agreements? At a time when buyers demand shorter lead times from their suppliers [and getting them], can Pakistan respond with improved transportation times from the factories to the ports, through the ports and from the ports to buyers around the world?
Operating Environment: Is the operating environment in which Pakistan companies work, one that enables them to achieve export competitiveness? Does the Government’s Policy Framework need to be adjusted to facilitate export competitiveness?
Page 4208.01.2009
Perspective Plan Project Pakistan: Terms of Reference
4. 5 Modules:
Module 1: Project preparation – collection of earlier reports, including reports to Government by Trade Associations, Preparation of questionnaires & identification of target companies
Module 2: Market Performance – EU, US, Dubai
Module 3: Analysis of returned questionnaires
Module 4: Conduct workshops Module 5: Perspective Plan – Phase 1
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