LAHORE:,,, Chairman APTMA Punjab S M Tanveer has said that an unprecedented fall in textile exports, particularly the basic textiles including yarn and fabric, is clear indication that the Punjab-based textile industry is unable to operate to its potential.
He said some 70% capacity of textile industry is based in Punjab. As per FBS, export data for the month of April against corresponding period exports of cotton yarn and cotton cloth has declined in quantity terms by 25% and 36% respectively.
Similarly, growth in value added textiles exports is unimpressive despite GSP plus facility from the EU.
He said the prime reason behind the prevailing situation is eight hours a day electricity and 16 hours a day gas load shedding being subjected to the Punjab-based textile mills resulting into closure of 100 mills, both fully and partially, in the province. In the situation, Textile exports would be merely $13.8 billion against a target of $16 billion envisaged by the industry, if energy shortage continues for next two months, he added.
S M Tanveer further pointed out that an increase in the industrial tariff in August 2014 from Rs9 to Rs14.5 per unit has burdened the Punjab-based textile industry heavily, as it is consuming 84% of the total industrial consumption on PEPCO network. However, the average cost of energy in other provinces is Rs7 per unit due to uninterrupted gas supply to the captive power plants, he added.
Accordingly, he said, the Punjab-based textile mills have been burdened with Rs80 billion additional cost per annum due to tariff differential. The non-availability of energy is adding fuel to the fire, leading to a large-scale closure of mills. Already, he added, an export potential of $3 billion is non-operational.
He said the fast re-emergence of Rs300 billion circular debt suggests that inefficiencies have not yet been plugged in the PEPCO system. Rather, unprecedented increase in electricity tariff has encouraged theft of electricity.
Chairman APTMA Punjab has urged the economic managers to ensure uninterrupted electricity and gas supply to the textile mills in Punjab in order to earn precious foreign exchange, keep employment intact and increase in production for larger economic objective.
He said the government should immediately address energy-relating issues, remove disparities and withdraw tariff increase to make Punjab-based textile mills viable. Any further delay, he warned, could end up on large scale closures, bankruptcies and unrest on the part of workers.