LAHORE: The government is considering a proposal to hire foreign consultants to improve the technology used in the garment industry, sources said.
Consultants are expected to be hired from Hong Kong, China, Taiwan, South Korea, Japan, Germany, Italy, the UK, Turkey and Sri Lanka, added the sources.
The step may make exporters competitive in garment business so that they can be a catalyst to enhance productivity of the garment industry by making it cost effective, thereby sustaining and improving its market share in the global market.
The main objective is to provide comprehensive consultancy services and technical guidance on all aspects of garment manufacturing and productivity enhancement methods in order to meet the challenges of global market.
Dr Salman Shah, Adviser to the Prime Minister on Finance, in his recent visit to the All Pakistan Textile Mills Association (APTMA) had urged the textile people to enhance their efficiency by hiring foreign consultants. He had said the textile sector would fail to face up to the upcoming challenges without proper analysis of the existing state of affairs in the sector by some consultants. He had offered that the government would share expenses if the industry hired foreign consultants.
Besides enhancing competitiveness, the government is also thinking seriously of changing the mechanism of fixation of rate of export refinance by converting it to London Inter-bank Offered Rate (LIBOR) and against the treasury bill plus methodology.
Sources in the textile ministry said the move could bring stability in export refinance rate, as there? no major fluctuation in LIBOR rate compared with local arrangements.
However, added the industry sources, the State Bank of Pakistan has started opposing any such move as it would be detrimental to the industry. According to information available with the Daily Times, the government would also ensure transfer of expertise from foreign experts to local staff of the industry and to improve their capacity building by the professionals engaged for which a Project Implementation Cell will be established.
It has been proposed that in each factory, a maximum 3-4 foreign experts of relevant areas such as dyeing, finishing, knitting, sewing, laundering, industrial engineering, printing, mechanical maintenance, designing and branding will be placed. It has been proposed that the cumulative basic salaries bill for any recipient for its entire approved expatriate staff will not exceed $25,000 per month.
Garment manufacturing factories (preferably vertically integrated) from all over Pakistan will be part of the new programme. However, initially 10-12 factories will be selected from different garment clusters of the country. The basic selection criterion for any garment factory will be its export sales volume (in dollars). The export sales details of the last two consecutive financial years will be evaluated. All major garment export factories will be ranked according to their year-wise sales volumes.
Before the start of the programme implementation and engaging of foreign experts, the National Productivity Organization (NPO) will establish certain benchmarks for all relevant technical fields to be covered. The government will initially provide Rs 300 million to carry out the job by the ministry of industries, production and special initiatives for technical upgrading of garment industry of Pakistan.
The benefits that the textile garment industry will get by the new initiative include improvement in the existing production practices according to international standards resulting in the betterment of product quality, enhancement in productivity by learning best practices of foreign industry, update knowledge on latest technology, improvement in capacity and skills level, learning industrial engineering techniques for performing manufacturing operation efficiency in garment value chain, adoption of cost effective techniques to minimize wastage, development of on-job-training culture, optimal capacity utilization of garments units and introduce the concept of continuous improvement.
Textile is the most important sector of the Pakistan economy and it has made investment of $5 billion in modernization and infrastructure development of the industry during the last four years.
It imparts 46% share in total manufacturing. It contributes about 66% of total exports and 38% of total employment. The textile industry? share in GDP is about 30% in value- added production by the manufacturing sector.
The World Bank, in one of its latest reports, has also urged the government to seriously concentrate on improving the low productivity and efficiency of the textile, garments and apparel industries, failing which it will not reap the benefits in the post-textile quota regime.
The implication for the apparel sector, the WB believed, could be more serious, if no action is taken to improve the much-needed productivity and efficiency. Pakistan? per capita productivity has been estimated by the WB at only 37% of the benchmark established by China. Compared with this the Indian per capita productivity is also better at 46%. Pakistan? garments industry is suffering from problems of low productivity, poor quality, weak management and marketing skills and hence facing serious threat of losing its share in the international market.
