KARACHI: Banks have assured the textile industry to give serious thought to its proposal of two-year moratorium on payment of outstanding loans, however such an action could be on case-to-case basis instead of extending it to the whole sector.
A delegation of All Pakistan Textile Association (APTA), led by its Chairman, Adil Mahmood, held a meeting with the presidents of various banks and other senior bankers a couple of days back to appraise them of the current situation in the textile spinning sector.
It was the follow-up meeting after the members of APTA met Advisor to Prime Minister on Finance Dr Salman Shah earlier this month and sought his help in this regard.
The bankers were given a detailed presentation about the reasons for the deep crises in the textile spinning industry. They warned that it is expected that the crises would get worse unless some concrete measures are taken urgently both by the government as well as the banks. The steep and uncontrolled increase in the costs of production, the regional subsidies being provided to their industries as well as the ongoing failure of our cotton crops have all resulted in the current impasse.
The frank exchange, under the Chairmanship of Ali Raza, between the members of APTA and the banks was deemed positive and the members left the meeting feeling relieved and satisfied that the banks were receptive and willing to help and were not interested in filing FIR’s or taking people to court.
The following points were discussed. The APTA members explained that they have been injecting funds into the companies in order to sustain the ongoing losses but are now drained. It was also suggested, by one of the bankers that, mergers and acquisitions should be undertaken between mills.
Our members advised that due to the nature of the trade, mills were physically far away and the only costs that could really be shared were head office expenses, administration and marketing whereas the bulk of the manufacturing costs would not be reduced. One of the bank’s president asked if, given present costs’ structure, would someone be willing to invest in textile spinning. The reply from the millers was a resounding ‘no’ if current costs’ structure and cotton costs and policies were not fixed. A miller explained that our spinning industry was one of the most modern and technologically advanced in the region but was unable to survive due to the factors explained in the presentation.
A delegation of All Pakistan Textile Association (APTA), led by its Chairman, Adil Mahmood, held a meeting with the presidents of various banks and other senior bankers a couple of days back to appraise them of the current situation in the textile spinning sector.
It was the follow-up meeting after the members of APTA met Advisor to Prime Minister on Finance Dr Salman Shah earlier this month and sought his help in this regard.
The bankers were given a detailed presentation about the reasons for the deep crises in the textile spinning industry. They warned that it is expected that the crises would get worse unless some concrete measures are taken urgently both by the government as well as the banks. The steep and uncontrolled increase in the costs of production, the regional subsidies being provided to their industries as well as the ongoing failure of our cotton crops have all resulted in the current impasse.
The frank exchange, under the Chairmanship of Ali Raza, between the members of APTA and the banks was deemed positive and the members left the meeting feeling relieved and satisfied that the banks were receptive and willing to help and were not interested in filing FIR’s or taking people to court.
The following points were discussed. The APTA members explained that they have been injecting funds into the companies in order to sustain the ongoing losses but are now drained. It was also suggested, by one of the bankers that, mergers and acquisitions should be undertaken between mills.
Our members advised that due to the nature of the trade, mills were physically far away and the only costs that could really be shared were head office expenses, administration and marketing whereas the bulk of the manufacturing costs would not be reduced. One of the bank’s president asked if, given present costs’ structure, would someone be willing to invest in textile spinning. The reply from the millers was a resounding ‘no’ if current costs’ structure and cotton costs and policies were not fixed. A miller explained that our spinning industry was one of the most modern and technologically advanced in the region but was unable to survive due to the factors explained in the presentation.
