In Punjab, energy supply break merely was doing an estimated loss of Rs1 billion per twenty-four hours. In the larger involvement of the economic system and exports, he suggested, the authorities should “ guarantee public-service corporation companies provide smooth electricity and gas supply to the fabric industry.Pimple ( 2009 ) further explains that now in this clip of crisis we need to be bold more than of all time. However we are tempted to look inward, but its certain the clip to set the chase of common good to exceed of our docket.
Whereas late we have been hearing much about how Wall Street is impacting guiltless people on Main Street, we need to believe more about people around the universe who have no streets.Imran Rana ( 2012 ) , really sagely writes in his article that the energy crisis has hit Pakistan ‘s fabric industry severely, but non all fabric companies are hurt: the largest participants are making merely ticket, trusting on a combination of the advantages of their economic systems of graduated table but besides government-sanctioned privileges non available to smaller industrial participants.At least portion of the ground why the bigger companies are making better than the smaller 1s appears to be the natural advantages that come with being a larger participant, such as holding a vertically incorporate concern theoretical account.
Many larger fabric Millss are able to buy big stocks of natural stuffs that insulate them from monetary value dazes. More than half the cost of bring forthing a piece of vesture is frequently still the cost of cotton, even for some of the largest participants. However, these confined workss have been acquiring gas even at the disbursal of the remainder of the grid, significance that even while the largest and richest fabric exporters save a few pennies on their production costs ( power histories for 3 % of all costs for the larger houses ) , all of Punjab is traveling through monolithic power outages because the power workss that supply electricity to ordinary citizens and smaller industries are acquiring less gas, sometimes even no gas.Meanwhile, smaller fabric participants have less dependable power from the grid, a supply that is made more intermittent by the fact that the fuel for the grid ‘s power goes to their larger fabric challengers. At the same clip, Bankss charge the smaller participants higher involvement rates, since they are viewed as bigger hazards for non holding their ain confined power supply. “ The smaller cats can non afford to run their mills on Diesel generators, ” said Muzammil Aslam, pull offing manager at Emerging Economics Research.Imran concludes in his research that giving out gas connexions to larger, politically connected fabric companies was a policy foremost initiated by the Musharraf disposal in the early portion of the 2000s.
Former president Pervez Musharraf had a misguided belief that Pakistan ‘s gas militias were plentiful, and hence his disposal gave out government-guaranteed gas supply contracts to the largest fabric companies, which now continue to harvest the benefits even as their smaller rivals struggle, with some even traveling out of concern and puting off their full work force.Usman ( 2010 ) explains further in his survey its impact on developing states and lessons for Pakistan explain that the fiscal crisis creates a serious job for Pakistan in its economic system. The intent of this survey is to foregrounding the outstanding facets of the planetary crisis, its impact on developing states and pulling lessons for Pakistan.
Imran Ali kundi ( 2012 ) through farther visible radiation on the energy crisis and says apart from rendering 1000s of people unemployed, the on-going energy crisis had severely affected the state ‘s fabric sector that would ensue in decrease in its export by $ 5 billion by the terminal of current fiscal twelvemonth 2011-12, The Nation has learnt on Monday.“ The fabric exports will cut down by some $ 5 billion during the on-going fiscal twelvemonth that will ensue in accomplishing $ 11 billion exports against the mark of $ 16 billion ” , said Gohar Ejaz, leader of All Pakistan Textile Mills Association while speaking to The Nation. However, he was optimistic that overall exports could travel $ 13 billion if authorities provides uninterrupted power supply to textile industry in the staying period of the on-going financial twelvemonth.It might be mentioned here that state ‘s exports had declined by 6.73 per cent during the first seven months ( July-January ) of the on-going fiscal twelvemonth against the same period last twelvemonth.
Harmonizing to figures of PBS, the state exported textile trade goods worth $ 6.936 billion in July-January 2011-12 against $ 7.437 billion of July-January 2010-11. Due to worsen in fabric ‘s exports, the state ‘s overall exports might non make old twelvemonth degree of $ 24 billion owing to the ongoing prevailing energy crisis in the state.Imran farther states the state is confronting worst sort of power crisis from last few old ages that had rendered 1000s of people unemployed, which lead them to take streets for registering protest. Harmonizing to Gohar Ejaz, fabric sector got proper electricity and gas merely in four months of the first eight of the on-going fiscal twelvemonth. On the other manus, functionary beginnings told The Nation that fabric exports did non diminish merely due to the on-going power crisis prevailing in the state but it besides decline due to the international market state of affairs wherein monetary values of fabric trade goods had reduced.Khan & A ; Khan ( 2010 ) explains in his survey that industry is confronting a immense diminution in its growing rate.
Global recession and high cost of production due to increase in the energy cost are two chief factors that contribute to this planetary diminution. Depreciation of Pakistani rupee that significantly raised the cost of imported inputs, rise in rising prices rate, and high cost of funding has besides effected earnestly the growing in the fabric industry.Syed Tahir Ali ( 2012 ) states that the terrible energy deficits are impacting the Punjab ‘s value-added fabric exporters, as they are losing concern to their challengers in India, Sri Lanka, and Bangladesh last but non the least Karachi because of turning deficits of energy in the state.Harmonizing to others analysts the holds in fabric processing due to gas and power cuts is besides impacting the ability of the value-added fabric merchandises exporters from the state to transport their orders at the given clip frames.Siddique, Shaheen, Akbar, & A ; Malik negotiations about the challenges being faced by the Pakistani fabric industry and how the challenges have now hindered the growing of the sector. The writers mention the imcompetence on portion of the governement and how it failed to implement the five twelvemonth Fabric Policy even after its proclamation. This places the sector under a batch of hazard. Furthermore, the attempts of the fabric units to come in the Europeon market have become successful but the policies and ordinances are taking a batch of clip to farther penetrate into the market and get down the exports to the market.
On the other manus the addition in the cost cotton has made it truly hard for the little and average sclae participants to last in the market.Siddique, Shaheen, Akbar, & A ; Malik further talk about the power loom section which is affected by the deficiency of new engineering, deficit of quality narration, and deficiency of fiscal establishments. All these factors are moving as obstructions in the gorwth of this peculiar section. Despite holding immense potency to turn and bring forth a batch of gross non for the companies themselves but for the authorities in the signifier of revenue enhancement grosss, it is non having proper attending which would assist it flourish and go the sort organized sector it can.
Acording to the writers, the first and most impportant job that has caught the industry is deficiency of fiscal aid from the private and the governement sector. Financial aid has ever been a important factor in the growing of a sector, the authorities of Pakistan nevertheless has failed to recognize the importance of this factor and has withdrawn export financing on all types of narration. The banking sector has non been really supportive either, they are offering loans on really high involvement rates which has made borrowing impossible for the man of affairs. Most of the Bankss show inclination towards imparting to the govenement sector than the private sector due to the hazard factor. Pakistan in add-on to this job besides has low foreign investing. The writers farther reference the investing from Bankss chiefly focuses the weaving and the spinning section.Global recession is another issue that has affected the fabric industry of Pakistan. This resulted in a dual figure rising prices and caused the monetary values of the trade goods to increase drastically.
Most of the population lives below the poorness line and the addition in monetary values of basic necessities made it impossible for the people to purchase them. The recession affected the fabric industry and decreased the demand of the fabric merchandises locaally and in the internation market every bit good. The figure of orders pouring in from foreign states besides reduced to a significant degree due to the polictical state of affairs of Pakistan. As a consequence the degree of unemployment increased and the criterion of life decreased farther.The writers besides shed visible radiation on the addition in the cost of inputs which made it impossible for the industry to vie at an international degree.
The merchandises of the fabric industry are being sold at a higher monetary value as compared to the rivals in the international market due to an addition in the cost of inputs like Electricity, Sui Gas, etc. addition in the monetary values of narration and cotton besides makes the fabricating procedure dearly-won and consequences in an addition in the cost of production. Another of import factor which has posed a menace to the industry is the handiness of bootleg goods in the market at a much lower price.Chinese Goods are one of the best illustrations, which are available throughout the state at much lower monetary values.
Talking about the energy crisis, the writers highlight the undermentioned facts. First, the addition in the electricity duty has led to an addition in the cost of production. The production capacity of industry has besides been severely affected by the energy crisis the capacity has reduced to 30 per centum. Due to lade casting the factory proprietors are forced to utilize alternate beginnings of energy like generators which run on gasoline, this increases the cost of production massively. Due to all this state of affairs the industry public presentation is severely affected and makes it less competitory in the international market.Harmonizing to the study, 60 to 70 per centum of the industry has been affected by the energy crisis and was unable to take orders from the foreign purchasers as consequence of gas and electricity burden casting.
Another job which the industry faced was the “ Two-day weekend ” for salvaging the energy. This farther affected the productiveness of the sector. The fabric sector is extremely vulnerable to energy crisis because of important dependance on the energy sector.Sultan ( 2012 ) negotiations about how severely the state ‘s anchor industry ( fabrics ) has been hit by the power outages. However there are some participants in the industry who have managed to contend with this job and have risen good. These are the major participants in the industry who relied on a combination of benefits from the authorities which are non available to the smaller participants and the economic systems of graduated table and peroformed good even during the energy crisis. Harmonizing to Sultan the ground why the bigger names have managed to be successful are somwehat natural every bit good, the natural advantages that come with being a larger participant for illustration holding a perpendicular concern theoretical account.
The ability of the pudding stones to take advantage of the synergisms which exist within the construction. All the procedures in the value concatenation like weaving, processing, dyeing are carried out as a unit, this helps in protecting the units from lifting monetary values in natural stuffs.Sultan references other grounds for success of the companies during the crisis, like Nishat Group which has the privilege of having the 4th largest bank in Pakistan, leting the Nishat Textile limited to easy get the better of the fiscal issues and raise capital for enlargement and bettering operational efficiency. The company hence ne’er had a job in paying of its short term and long term debts.
The company besides managed to raise 1 billion rupees to put in a 6.2 megawatt power coevals works which runs on biomass. The electricity produced from this method is more expensive than that provided from the national grid but is far more dependable beginning and ensures a uninterrupted flow of work.
Due to handiness of hard currency these big units are besides able to purchase big stocks of natural stuff which prevents them from incurring losingss when the monetary values rise.Furthermore, the writer mentions how the bigger fabric units are able to acquire gas connexion on the footing of political influence. Harmonizing to the writer the former president Pervez Musharraf had miscalculated the gas militias in Pakistan and hence the authorities gave out authorities guaranteed gas supply to the largest fabrics. These fabrics now continue to profit from the contracts on the cost of the smaller rivals who are fighting to last and some have even gone out of concern and as a consequence have left many unemployed.As a effect of burden casting the fabric production capacity of assorted sub-sectors has been reduced by up to 30 per cent. The representatives of the all textile associations presented their serious concerns on the immense losingss being incurred due to electricity burden casting and the instant rise in the Electricity duty. They said that the industry has already been crippled due to enter burden casting during winter months.The joint meeting of All Pakistan Textile Mills Association ( APTMA ) & A ; other related organisation was held at APTMA House to explicate a joint scheme to turn to the alarming electricity crisis being faced by the fabric industry.
The meeting nem con decided to represent a joint working group of electricity direction for the fabric industry in the larger involvements of the value concatenation of the fabric industry.The joint working group will run into shortly to plan a elaborate program to prosecute the undermentioned ends ; immediate entire freedom from Electricity burden casting for the fabric industry value concatenation ; Rationalization and decrease of electricity duty. Load casting of electricity cause a rapid lessening in production which besides reduced the export order.
The cost of production has besides risen due to instant addition in electricity duty. Due to lade casting some factory proprietor uses alternate beginning of energy like generatorA which increase their cost of production further.AHarmonizing to Ahmed ( 2011 ) the fabric industry of Pakistan is confronting ferocious competition in the international market due to assorted grounds.
The planetary recession has affected the fabric industry of Pakistan but that is non the lone cause of concern. There are several internal issues such as the rise in cost of production due to a rise in the monetary value of natural stuff. The primary cause of rise in the cost of production is the drastic addition in the energy costs. Furthermore, the depreciation of the currency made the imports really expensive and as a consequence increased the cost of production. In add-on to the factors mentioned above the dual figure rising prices affected the overall fabric industry of Pakistan.Talking about the growing rate of the industry over the last 10 old ages, the writer mentioned that that the industry has shown a steady growing since 2002 and showed a sudden addition in the twelvemonth 2004 where the growing rate jumped from 5 per centum to 20 per centum in a affair of 12 months due to an inrease in the exports to United States ( US ) thereby doing it the 7th largest exporter of Cotton to US market. The state nevertheless went through darkest political clip during 2007 and besides experient economic instabilites due to the blackwash of Benazir Bhutto. In the undermentioned twelvemonth the industry showed a negative growing due to a fiscal crunch in the universe economic system.
The economic system besides was get downing to undergo an energy crisis which was affecing the public presentation of the fabric industry.Tahir & A ; Mughal ( 2012 ) focused on a comaprison between Pakistan ‘s fabric industry and the neigboering state ‘s fabric industry. The writers talk about the textil industry of China and foreground the grounds with the aid of which they have grabbed the place of a planetary leader. It has managed to retain 1st place in the American market with a portion of 36 per centum and besides has the top place in the European market with a portion of 26 per centum. Recently, the Chinese fabric sector has transfored the fabric industry into a more organized sector and has modernized the industry switching the traditional methods to different states.
China has been able to retrieve her high quality once more through effectual economic reforms and finally has become the biggest competitory state in Textile Industrial World.The primary ground for the domination of the Chinese fabric industry is the influx of immense foreign investings, inexpensive work force, modernized engineering, and depreciated exchange rates. Tahir and Mughal farther shed visible radiation on how the Chinese industry is basking their competitory high quality when the trade limitations were lifted.
All the competitory states are under a great strain due to the competitory high quality of China. India and Brazil are some of the states who are confronting a nervus bust uping competition from China.Talking about the Indian Textile Industry, the writers mentioned that the Indian industry is one of the oldest and biggest Industry of India and the universe after China.
The industry constitutes 14 per centum of the entire industrial production in the state and provides employment to more than 35 million people in India. The industry besides contributes about 17 per centum of the entire exports.India is the biggest state of the universe in Jute production, 2nd in Silk production, 3rd in cotton production while 5th large state in Man-made fibre production. India ‘s Textile Industry can be classified into two large sectors viz. organized factory sector and an unorganised factory sector.
Harmonizing to the writer, the state is besides the biggest exporter of narration in the international market and holds a portion of 25 per centum in the World Yarn Export Market.Harmonizing to Tahir and Mughal India has managed to stand out in this industry due to inexpensive skilled labour, handiness of low priced natural stuffs, handiness of several assortments of cotton fibre, and immense potency in the local and international market and an independent fabric sector. Tahir and Mughal have perceived these factors to be the ground of success for the Indian fabric industry.Talking about the Bangladesh fabric industry, the writers believe that the fabric industry has been the anchor of this industry. It provides employment to 45 per centum of the entire population and out of the employed population adult females have a higher ratio of employment in this sector. The fabric industry is seemed to be combination of little and big scale public and private companies.The fabric industry of Bangladesh can be divided into three sectors, the first 1 is the Government sector, 2nd is the manus loom sector, and the 3rd is the organized private sector. This sector is known to supply employment to a important figure of people in the state.
Its function in export income of the state is greater than the other two. Bangladesh is exporting her about 750 Fabric Merchandises in China ‘s market under Asia Pacific Trade Agreement with nominal responsibility. The fabric merchandises of Bangladesh have besides, developed its demand in Japan excessively.The industry enjoys authorities support in the signifier of quota and responsibility free trade installations. Its exporting income which was about US $ 23 billion in the twelvemonth 2010-11, the portion of fabric sector is about 80 % . Harmonizing to the Organization of Garments Manufacturers and Exports of Bangladesh, the demand of fabric sector is 3 billion pace cloth, which about from 85-90 % is imported from neighbouring states as China, India, Taiwan, Thailand and Singapore and its demand of this natural stuff is increasing 20 % yearly.
The fabric sector of Bangladesh is the largest sector and has a batch of possible to turn nevertheless it does confront a challenge of non-availability of natural stuffs to carry through the demands of the industry. Nevertheless, the state is pull offing to turn based on its strengths of cheaper work force.Talking about the Pakistan fabric industry, it plays a critical function in supplying employment chances to the population of Pakistan and a beginning of foreign exchange. It contributes 63 per centum in footings of entire exports and is the 8th largest state in Asia in footings of fabric production. However, the part towards World Textile Trade is less than 1 per centum.
The fabric industry has non been able to take advantage of its typical competences like the other adjacent states who managed to take full advantage of their competences.The sector is known to confront ferocious competition in the international market, as per the writers. After the remotion of trade limitations the competition has become even more intense. Tahir and Mughal mention the grounds which have marred the growing of the industry.
The energy crisis, peculiarly the electricity and gas crisis have affected the industry the most. Fluctuating monetary values of narration, addition in the minimal rewards of industrial work force, political instability are some of the factors which have put the growing of the industry in danger.Awaam ( 2010 ) manages to edify the research worker through his study on the energy crisis which has hit Pakistan and assorted other dimensions which are related to the job. The writer mentions the badness of the crisis and calls it a affair of life and decease. Almost 53 per centum of the Pakistani population remains deprived of electricity for more than 8 hours a twenty-four hours throughout the twelvemonth.
The crisis has affected the day-to-day life in the worst mode possible and threatens to jeopardize the prosperity of the state ‘s future economic and societal chance.The study further sheds visible radiation on the deficiency of understanding on portion of the people about the crisis and the fact that they have to abnormally high monetary value for the electricity which is non provided half of the clip. The populace does non to the full understand the ground behind the deficit of electricity. As per the study, the job is simply a symptom of a deep rooted job of institutional decay and short term planning. Lack of wide vision is another ground which has led to the job.
All the jobs are mere effects of the determinations taken by the elect clas of the society which benefits them merely. For illustration, the rental power workss, they are agencies of a short term and soiled solution to the job. The worst portion is that now the Americans are inventing solution to the job which is really simple.Dr. Khalil Ahmed of Alternate Solutions Institute has compactly put this in the undermentioned words:“ It is to populate in a Guantanamo Bay of uncertainness ‘ . He says ‘even if we do non fall back to boisterous economic, societal, moral, psychological behaviour, we feel depressed to the nucleus of our deepest egos and what is more unsafe is that our trust in the system, state and state evaporates in the air, aˆ¦ Transforming us, the lowly citizens of this elitist state into neurotic and psychotic existences. ”The multidimensional energy crisis is upseting every facet of a Pakistani ‘s life. The transit system is affected, the industry which is known to be the back bone of a state is enduring, infirmaries can non work efficaciously due to this job, and most significantly schools and other instruction establishments can non work because of the presence of the crisis.
Electricity is known to be the supplier of indispensable services to our day-to-day lives and the services include heating, air conditioning, cookery, illuming at place and offices, runing communicating systems etc.Low entree to better energy services is one facet of poorness as poorness influences the pick of energy of the hapless families. However the wants caused by the energy crisis are far more of import than the poorness afflicted picks.When speaking about the beginning of crisis, the study references that the demand of electricity in Pakistan rises every twelvemonth at rate of 8 per centum nevertheless this addition in demand is non met by increasing the supply of electricity. In fact no power works has been installed in Pakistan for the past 8-9 old ages.
This is one of the grounds for the deficit of supply there are still many unreciprocated inquiries like why and how has the state come to such a point? One of the grounds mentioned is monopolisation. The authorities has given the transmittal, coevals, and distribution of electricity to one authorization which of course turns the organisation in to a monopoly. For illustration, Karachi Electricity Supply Corporation is a private corporation, despite that the company runs in a monopolistic mode. In such a state of affairs the company does non hold to worry about competition in the market and it can go on executing in an inefficient mode. Similarly, the deficiency of presence of competition in the industry, the company does non worry about its clients and their jobs because it does non hold any inducement to react to their questions. The fact that the corporation is non answerable to anyone it operates with complete freedom and merely caters to the demands of the elect category and overlooks the demands of the multitudes.Harmonizing to the study there is another job known as “ institutional decay ” .
This job occurs when a section is plagued with the disease of inconsistent and hapless planning. Pakistan as per the study has immense militias of coal but has non been efficient in working this utile resource. This is the contemplation of slow and hapless planning on portion of the authorities. The writer so shows concern on the fulfilment of duties by Water and Power Development Authority ( WAPDA ) .
Harmonizing to him it is one of the responsibilities of WAPDA to fix feasibleness studies and carry out future planning of power coevals for the state, it is one of their duties to calculate the population growing and analyse the international energy markets and program consequently. However the section has non been successful in carry throughing their responsibilities and the ground is the fact that executive degree occupations in this establishment are given to people on the footing of influential background and non on the footing of virtue. Which is why no 1 cares about the multitudes and the executives merely cater to the demands of elite.Another job mentioned in the study is corruptness.
The corruptness slows down the procedure of puting up any type of concern in Pakistan. There are many possible investors in Pakistan who have the fiscal capableness to set up power workss and the authorities besides supports these investors by offering revenue enhancement vacations and returns up to 15 per centum. But the job is that by the clip the investors get their paper work signed from the relevant ministries by paying bribes the feasibleness becomes excess.Harmonizing to the World Bank statistics mentioned in the study, 84 per centum of the houses had to pay payoff in order to obtain electricity services. Harmonizing to the former president of WAPDA, the state does non hold a deficit of electricity supply but it is the consequence of non-payment to the power workss. The writer wonders how the authorities has sufficient money to pay for munificent trips of the president of this state, spend on the non-developmental outgos, and fund the outgos of the curates. But the authorities does non hold money to pay off its internal debt.
Talking about the transmittal substructure of Pakistan, the writer calls it old and creaking. It farther suffers from deficiency of investing and timely care. Higher system losingss may be due to undependable and old-age coevals workss, low-tension transmittal and distribution lines and inappropriate location of grid Stationss, every bit good as some non-technical factors such as inaccurate metering and charge, default payments, un-metered supplies, and larceny from illegal connexions.
The study besides mentions a few grounds which restrict the private sector come ining into the power sector. The power sector does necessitate heavy investing and involves complex engineering and has a scattered irregular electricity market. These are some of the factors which made the power sector unfavourable for the private sector. Therefore, public ownership entirely could guarantee the coveted degree of production and distribution needed to speed up and beef up agricultural and industrial development. There are a few other factors which increases the adversities of the private sector for illustration geographical troubles, deficiency of proper substructure, and the development of developing countries. Therefore, public electric power sector developed in Pakistan because no private sector was ready to take the duty.
A research inquiry should be clearly defined.
There should be no ambiguities in a research inquiry because that would do a research faulty. A research inquiry specifies the aim of the survey and the way that will be undertaken to reply that peculiar inquiry. Once it is decided the research worker so decides to utilize qualitative methods or quantitative methods to transport out the research.The research is intended to analyse the Textile Sector in the state and its potency of productiveness and investing and more specifically the capacity to bring forth gross for the Government of Pakistan in the signifier of Taxes.
The survey highlights the effects of energy crisis chiefly, and other jobs on the fabric industry in the state as a whole. The fabric industry which is known to be the bone of this state has been struck by terrible energy crisis for over 6 old ages now.The fabric industry is major beginning of employment and foreign exchange for the state which makes it a really of import industry for the economic system of Pakistan. However, the industry has been confronting a deficit of natural gas and electricity for rather some old ages now. The addition in the monetary value of electricity has increased the cost of production for the fabric units thereby cut downing the degree of net incomes.
The big and good established fabric units face the same challenge but they have managed to eliminate this job significantly by set uping their ain power workss. These big units have a strong fiscal base, these are units which have sister companies runing in other sectors of the industry, therefore it is easier for them to raise the sort of capital required for set uping power workss. These units besides get important support from the authorities to transport out such undertakings.The addition in the cost of production affects the little and average graduated table units the most. They do non hold sufficient fiscal resources to manage immense orders from the purchasers and as a consequence they make limited net incomes and to go on doing these net incomes they have to maintain their cost of production in control. However the little and average graduated table units are non able to make maintain the costs under control any longer. First, the rise in electricity measures increases the cost enormously, secondly, the due to the deficit of electricity they companies have to take up surrogate beginnings for bring forthing energy like generators.
This adds up two extra costs to the cost of production. The first 1 is the rent of the generators and the 2nd cost is the fuel which they have to buy every twenty-four hours for the generators to map.Furthermore, some units in the industry run their operations wholly on natural gas.
Due to the deficit of natural gas these units have now started utilizing coal to bring forth energy. The use of coal slows down the production rate and reduces the productiveness degree thereby impacting the concern of the company. Most of the companies besides shut down their units during the natural gas off yearss. This affects the concern in the worst possible mode. They companies foremost are non able to finish the orders in clip. The orders are delayed which increases the ailments from clients and go forth them unhappy.
Second, the overhead costs during the natural gas off yearss are being incurred by the company despite the fact that no production is taking topographic point and productive activity is being done. Therefore, the deficit of natural gas for the commercial and industrial country is impacting the concern soberly and take downing the net income borders for the unit operating in this industry.The research inquiry for this thesis is as follows:
“ Is the Energy Crisis Affecting the Textile Industry of Pakistan and
What are the steps being taken to get by with the job? ”
Pakistan ‘s economic system has been badly hit by an energy crisis. This job has affected all the industries of Pakistan. Fabric is one sector of Pakistan that has been affected the most by this crisis.
This research inquiry would assist in happening out to what extent has the crisis affected this peculiar sector. What are concerns runing in this sector making to contend with this job and how are they pull offing to still do net income. The different schemes used by units in the industry to keep their competitory place in the local and international market despite an addition in the production cost due to the energy crisis and addition in electricity costs.The fabric units of Pakistan are confronting a ferocious competition non merely in the domestic industry but besides the international market. Neighboring states such as China, India, and Bangladesh are giving a really tough competition to the fabric industry of Pakistan in the Asia part. All the viing states have entree to cheap work force, modern engineering, and a uninterrupted supply of energy, all these resources help in maintaining the production costs of these states lower than Pakistan.
Lower degree of production costs attracts the purchasers to these states and non Pakistan which makes the Pakistani fabric units fight really hard for the orders.The research would besides assist in happening replies about the use of alternate energy beginnings by little, medium, and big graduated table fabric units. It is harder for the little and average graduated table units to contend with this job as they can non afford to incur excess production costs. Whereas the larger units experience economic systems of graduated table which allows them to suit a few excess production costs. Therefore, the energy crisis is more of a major job for the little graduated table and medium graduated tables units.Some of the little fabric units have besides closed down because they were unable to cover with energy crisis. The usage of surrogate energy beginnings for illustration electricity generators increased the cost of production and left with really small net income borders.
In order to carry on an effectual research, taking the right methodological analysis that will give dependable and accurate consequences must be adopted.
This is because a right research methodological analysis will guarantee believable, effectual and right result of the research survey that is being conducted.This research will be divided in to different stages. It is really of import for a solid research that both, qualitative and quantitative methods are used. Research Methodology adopted for this research will be explained below.First stage of this research was to roll up qualitative informations on company, its industry and chief country of research for this. In old parts this information has been collected, and will be used for analysis in the parts of the research that will follow. It is really of import for carry oning a concern research undertaking that the nature of the concern, industry kineticss and company ‘s civilization is understood in item.
Since without the cognition of these mentioned facets, neither job can be decently understood nor can an accurate analysis or recommendations be prepared. Furthermore literature reappraisal has been conducted on the country of survey, which chiefly relates to energy crisis..
This literature reappraisal serves as a valuable beginning of cognition when carry oning this research, particularly for fixing questionnaires and analysing them. Input signal from these beginnings will besides be of import in doing recommendations.Second stage of this research was to roll up qualitative informations through Experience Surveys. Experience Surveys serve as one of the most valuable beginning of information about the research, giving the research an in deepness analysis for the research being conducted. Therefore, due to its tremendous value it has been used as a method of research for this survey.
Since the research is about an industry that is in its babyhood phase, it is really of import to acquire some overview every bit good as penetrations from person who is knowing. It is of import to acquire perspective on it from person who has huge experience as a purchaser, who has received its preparation as good and who has old ages of experience in the field. So experience study will be conducted with Chief Executives of two different fabric units.First interview was conducted with Mr. Samir Rajput, Managing Partner of Commercial Dyeing.
Commercial dyeing is a dyeing company. It is located in Shahdra. They dye two different types of cloth. Hosiery is one type, Woven is the 2nd type of cloth that is dyed at the company. In a month Commercial Dyeing dyes about 10 to 11 million metres of cloth. For Hosiery, the company dyes about 182,000 kilograms of fabric every month.
The company has a entire work force of 100 employees. A elaborate experience study interview will be conducted with him to acquire his stance on the bing energy crisis, what he identifies as jobs with it and the solutions which can implement to eliminate the job.Second interview was conducted with Mr Daud Ashraf, Managing Partner at Crafts fabrics.
This fabric unit specializes in the production of knitwear. The company is located on Raiwind Road. They deal straight with purchasing houses for the orders. All the production is exported to Europe, United Kingdom, and United States of America. They deal with different outstanding trade names. The most of import 1s are Sean John, Zara, Women ‘s Secrets, and Mark Ecko. Crafts fabric is the authorised exporter for Zara and Sean John. They have received enfranchisements from these two trade names.
The company has a capacity to bring forth 100,000 units of knitwear everyone. They have about 400 workers employed.Mr. Ashraf enlightened the challenges faced by the fabric industry and how the fabric unit is get bying with it.
He mentioned how the unit is fighting with the bing crisis and seeking to maintain the costs low so as to stay a competitory unit in the industry. The steps and schemes adopted by the company to cover with this job. He besides mentioned how the authorities has non been supportive and non taken steps to eliminate the job yet.
Experience study helps by giving the penetrations to a peculiar issue. The experience forces provide information that is backed up with reliable facts and figures. This information is really utile in deducing a decision about an issue or a job.
It helped to garner the cognition and experience of the forces.The first interview was conducted with Mr Samir Rajput, the Managing Partner at Commercial Dyeing. The company is located at Shahdra. About 100 employees work at this installation to run into the day-to-day demands of the market. The dyeing company has a forte in dyeing of two types of cloths: Hosiery and Woven.
The interview was really enlightening. A batch of penetration was shared and a batch of utile information was discussed during the interview.Mr. Rajput mentioned the deficiency of involvement of authorities in the fabric sector.
He emphasized that the authorities is non back uping this sector in any manner. All the medium graduated table and little graduated table units are lasting in the industry on their ain. They are utilizing their ain resources for endurance of what is left of their concern.
He farther mentioned that the demand of the market is diminishing because of the increased cost of production over the old ages. In the FY12, the company has dyed 20 per centum less fabric as compared to last twelvemonth. The company has non incurred losingss but the net incomes have gone down because of the decreasing demand. The chief ground is the closing of little graduated table fabric units in the market. The units had non been to keep their disbursals and were forced out of concern. Besides, the recession in the state has affected the buying power of the people.
This has resulted in a diminution in sale of the stitched and unstitched fabric. As a consequence, the company received fewer orders this twelvemonth.He farther mentioned the burden sloughing of natural gas in the industrial sector. This job forced the company to utilize an alternate beginning of energy, coal. As a consequence, the company ‘s cost of production went up.
This cost was non reflected in the monetary value charged to clients because of the competition in the market. Furthermore, the surrogate energy was non every bit efficient as the energy generated by power houses. This slowed down the process and the company was non able to bring forth the orders in clip.Another subject brought under treatment was the seasonal fluctuations in the demand of garments in the market.
The month of Ramadan is the busiest for the company. In fact, two months prior to Eid are the busiest for Commercial Dyeing. They have to provide to excess orders in these months. So the deficiency of energy affects their concern the most during these months.
In order to carry through the demand during these months they use alternate beginnings which drives up the costs.High involvement rate was another job discussed by Mr. Rajput. This is impacting the industry in the worst possible mode. It has about become impossible for the companies to take loans from the Bankss for enlargement intents or other concern related undertakings. The adjacent states on the other manus implement schemes and policies which support the industry and do it more competitory in the international market.
Furthermore, the Indian authorities has provided a purchase of 7.5 per centum responsibility drawback to the spinning and garments section in order to prolong the industry. Bangladesh besides provides 5 per centum hard currency inducement on yarn exports and the Chinese authorities besides provides different inducements in the signifier of discounts for the improvement of the fabric industry. The Pakistani authorities on the other manus has non taken up steps to better the status of fabric industry, the resurgence of the industry should be the most of import aim for the authorities.Second study Questionnaire was conducted with Mr.
Daud Ashraf, the Managing Partner at Crafts Textile. Mr. Daud Ashraf prior to get downing his ain concern has a solid 10 old ages of experience working at Angora Textiles, one of the giants of Pakistan ‘s fabric industry. The fabric has specialized in bring forthing knitwear.
All the knitwear is exported to different states. The fabric does non provide to the demands of the local market. They merely trade with international clients. The company gets orders straight from the makers and through go-betweens known as purchasing houses. The regular purchasing houses the company deals with are Six Sigma and ITC.Mr. Ashraf gave us an penetration to the fabric industry and the jobs faced by them. The first job discussed was the crisp monetary values offered by the international trade names.
The trade names offer really crisp monetary values to the fabrics. The ground why the units are offered such crisp monetary values is because of the go-betweens. They keep their committee and that automatically reduces the monetary value.Another ground is ferocious competition, non merely in the local industry but from the rivals in the adjacent states. Bangladesh and China are ready to make the same orders at the monetary values the trade names offer. In some instances they are ready to take orders at a lower monetary value every bit good.
There are many grounds which contribute to this generous offer. First, the authoritiess of these two states support the fabric industry in every manner possible. They are given revenue enhancement vacations, discounts, and research and development compensations.Second, the states are non faced with the energy crisis. This keeps their cost of production in control. Furthermore, the work force in these states is available at really inexpensive rates. These factors help the fabrics keep their costs low and enjoy high net income borders.Talking about the energy crisis, he talked about alternate beginning of energy used by the company.
The company is utilizing generator which runs on fuel. The company non merely has to incur the rent of the generator but besides have to pay for the fuel disbursals daily. The fuel monetary values in the state are besides really high. All of this adds up to the cost of production. Therefore the company is left with really low net income border. The trade names on the other manus are non ready to counterbalance for the excess costs incurred by the company. Lack of electricity reduces the productiveness of the labour and the mill. The mill has to incur the disbursals of hired labour even when there is no labour.
This consequences in accelerated over caputs.The deficiency of authorities support was another factor that was discussed. Mr. Ashraf mentioned that the authorities is non back uping the industry in any manner.
The authorities has still non paid the promised discounts to the fabrics. They promised to pay the fabrics last twelvemonth nevertheless that promise has been materialized but the procedure of authorities are ill-famed for slow processing. The authorities used to give research and development compensations to the company every bit good.
This inducement has besides been stopped. The companies no longer acquire the compensation.Lack of skilled labour was another challenge faced by the company. The skilled labour demands higher rewards. The unskilled labour on the other manus costs expensive cloth to the company. This once more increases the cost of production drastically.
There is another major challenge faced by the industry in the signifier narration. The fluctuations in the production of yarn consequences in changeable up monetary values of this natural stuff drastically. Within a twelvemonth the monetary value of narration bag went up to Rs 20,000 from Rs 10,000.
This increased the operating expense of the mill drastically. The mill had to pay for the excess over caputs from their ain pockets. The trade names did non counterbalance for the addition in the monetary values of narration bags.Harmonizing to him the exports of garments declined 25 per centum and production dropped by about 35 per centum. Thousands of people were made redundant due to the crisis that resulted in decrease in industry ‘s exports.The little and average graduated table units are lasting in the industry on their ain without the aid of the authorities. They are the 1s who are really confronting the job of energy crisis because the bigger participants in the domestic market have established their ain power workss. Unlike other states, the authorities of Pakistan is non back uping the back bone of this economic system and is under the feeling that the industry is making merely mulct.
Over all, the fabric industry is confronting a batch of challenges. The industry one time known to be the anchor of the Pakistan economic system is now checking due to energy crisis and rise costs. The most of import issue to turn to is of electricity & A ; gas duty and supply. The gas deficit additions in Punjab at the extremum of winter season. Even during the summer season gas burden casting does non halt. This is one of the chief grounds the fabric industry falls short of run intoing the annual export mark. Gas burden direction has resulted in closing of many textile units rendering a big figure of workers idle.
Fabric Industry is one of the foremost and mature industries in Pakistan, despite its built-in strengths ; the industry is losing its fight to other states, particularly to South East Asiatic Countries. To provide to the lifting demand and challenges the Industry is in pressing demand of fiscal and technological investings. The demand of fabric merchandises in Pakistan can be appraised and assessed by holding a glimpse at the historical figures.
The Pakistan fabric industry, it plays a critical function in supplying employment chances to the population of Pakistan and a beginning of foreign exchange. It contributes 63 per centum in footings of entire exports and is the 8th largest state in Asia in footings of fabric production. However, the part towards World Textile Trade is less than 1 per centum. The fabric industry has non been able to take advantage of its typical competences like the other adjacent states who managed to take full advantage of their competences.
With the aid of the primary research conducted and the secondary research can be concluded that the fabric sector faces a immense challenge of endurance. The industry faces a batch of challenges in the signifier of energy crisis, the lifting cost of production due to an addition in the cost of electricity, lifting monetary values of narration and cotton, deficiency of advanced engineering, deficiency of proper methods for the measuring of cotton harvest in the state, and deficiency of a proper organized system to back up the industry of Pakistan.Energy Crisis in Pakistan is one of the terrible challenges the fabric industry is confronting today. Electricity, gas, H2O, fuel is indispensable portion of our day-to-day life and its outage has badly affected the economic system and overall life of ours. Thousands have lost their occupations, concerns ; day-to-day life has become suffering. Pakistan is presently confronting up to 18 hours of electricity outage a twenty-four hours, is expected to confront more if non cover with in clip.The energy crisis includes deficit of natural gas and electricity to the fabric industry. The industry is fighting difficult to contend this challenge which has crippled the fabric industry since the last five old ages.
The crisis has affected about 40 per centum of the production capacity and it is now sing a closing of gas from 77 yearss in 2008-09 to 177 yearss. Similar is the state of affairs with the electricity deficit which has reached up to 40 per centum in the current twelvemonth.Deficit of electricity and natural gas has forced the closing of many little graduated table and medium graduated table units in the industry and it is unknown that how many units will endure the same destiny.
The deficit affected the production capableness of these units which resulted in late completion of the orders given to them by the foreign importers. This made the importers divert their orders to the adjacent states like Bangladesh and Sri Lanka. As a consequence, the state loses exports orders deserving 1000000s of dollars every twelvemonth. Unfortunately the authorities has still failed to acknowledge the dismaying state of affairs of the fabric industry.
Pakistan has now become an energy starved state and is faced with the challenge of pulling foreign investing. The hapless economic state of affairs of the state has successfully managed to maintain the investors far off, and as a consequence local investors are besides discouraged. When the industrial sector of a state is confronting terrible challenges it is really likely that the influx of foreign money is traveling to worsen and finally halt. This besides causes a diminution in the foreign militias and as a consequence forces the state to take loans. With such unhealthy conditions, combined together with the diminishing degree of foreign militias, Pakistan is bound to see a diminution in exports and high degree of imports.The states are now running in a race to acquire clasp of oil well and are puting heavy sums in the energy sector to procure their state ‘s hereafter. Pakistan on the other manus is unmindful of the menace that prevail the state and is non taking up any significant stairss to better the job.
It is now really of import to supply a uninterrupted supply of energy to the fabric units from the national feeders for both little and big graduated table users.Due to the crisis and the lifting cost of production, the domestic garment industry is importing a batch of garments from states like Thailand and Malaysia. This makes the domestic market even more competitory as the local manufacturers have to come up with schemes to maintain their production costs low in order to maintain their monetary values low.The fabric industry of Pakistan is besides confronting ferocious competition in the international market due to assorted grounds.
The planetary recession has affected the fabric industry of Pakistan but that is non the lone cause of concern. There are several internal issues such as the rise in cost of production due to a rise in the monetary value of natural stuff. The primary cause of rise in the cost of production is the drastic addition in the energy costs. Furthermore, the depreciation of the currency made the imports really expensive and as a consequence increased the cost of production. In add-on to the factors mentioned above the dual figure rising prices affected the overall fabric industry of Pakistan.Neighboring states have availibility to cheap labour, immense influx of mony from the foreign investors, and advanced engineering.
They besides have the most of import factor which helps them to stand out more ; the authorities support. The authorities of China for illustration provides the fabric units with revenue enhancement discounts and the authorities of India has dropped the rate of involvement by 5 per centum doing borrowing really easy for the fabric sector. All these factors help the industry of these states to contend the international competition in a more efficient and effectual mode.
The remotion of international trade barriers have made it the competitory scenario even more intense. However when looking at the authorities of Pakistan, there is no support for the little and average degree participants. The large names in the market are self suficient because they have their sister companies runing in other industries like banking energy etc. authorities support is needed for the little to medium flat units so that they can spread out their concern and present new engineering to bring forth cost efficient and better quality merchandises to keep a competitory place in the markt. Therefore, authorities should back up these units by supplying research and development allowances and revenue enhancement discounts so they can put the money in enhanincg the public presentation of their unit.Surprisingy, there are some participants in the industry who have managed to contend with this job and have risen good.
These are the major participants in the industry who relied on a combination of benefits from the authorities which are non available to the smaller participants and the economic systems of graduated table and peroformed good even during the energy crisis. The ground why the major participants have managed to be successful are somwehat natural every bit good, the natural advantages that come with being a larger participant for illustration holding a perpendicular concern theoretical account. The ability of the pudding stones to take advantage of the synergisms which exist within the construction.
All the procedures in the value concatenation like weaving, processing, dyeing are carried out as a unit, this helps in protecting the units from lifting monetary values in natural stuffs. Furthemore, the large names have besides established their power workss with tha capactiy of supplying 6 -7 megawatts of energy. This helped the units in cut downing their degree of dependance on the national grid.The engineering used in the industry is outdated, old fashioned, and obsolete. This machinery is now incapable of supplying quality goods at a high productiveness rate and is no longer cost effectual. The adjacent states like China, India, and Bangladesh are now utilizing advanced engineering which makes their goods cheaper in monetary value and better in quality. Pakistan is traveling to lose out on its competition in the planetary market if the fabric units do non take immediate stairss to overhaul their techniques and engineering.
There is another restriction that has hindered energy prosperity in Pakistan and that is short-sightedness. Numerous meaningful and consistent energy policies have been implemented over the period. Unfortunately the attack has been “ project-oriented, ” instead than “ goal-oriented. ” Almost every political government dealt with energy crisis on an ad hoc footing and as a consequence did planning which was based on short term ends. Long-run and sustainable planning of energy has been a construct unknown to Pakistani authorities.There is no speedy solution to electricity deficit and the tendency of billowing monetary values is irreversible. There is really small the new authorities can make on this in the immediate term.
At best, the job can be prevented from worsening until a sustainable solution is struck. Tough determinations will hold to be made, and executed with committedness.
In visible radiation of the bing job with the fabric industry, the research worker recommends a few possible solutions for the obliteration of the job.The major job being faced by the fabric industry of Pakistan is deficit of energy in the signifier of natural gas and electricity. There are few methods through which the authorities may be able to work out the job. There are a few possible suggestions to command the job so that the industries can boom and do usage of the monolithic potency they have to give a strong competition to the international rivals and turn out themselves of something worthy.
The suggestions are as follows:
1.A Using Coal as Thermal Power fuel
About 81 per centum of the electricity produced in Pakistan is produced by utilizing oil and gas. This costs about 9.4 billion dollars in other footings it is about 53 per centum of the entire exports of Pakistan and is shown as the biggest cost on the import measure. Give the information, the dependance on thermic power in the state is significant so it will non be possible to merely exchange to hydro power, therefore the authorities can believe of exchanging the fuel used to derive the thermic power. Coal can be used to derive thermic power alternatively of oil and gas.
Reason being, both the resources are acquiring really expensive and the monetary values fluctuate really frequently. Therefore, utilizing coal would be a executable option.Imported coal should be used and non the Thar coal.
If Pakistan decides to import clean coal, it would be the authorities much less than oil because its monetary value is more stable in the international market as compared to oil. This may assist in conveying monetary value stableness in the electricity monetary values that keep altering due to alterations in international market monetary values.
2. Stand-alone power undertakings
About 40 per centum of Pakistan is non acquiring electricity from the national grid, this makes them wholly deprived of this utile resource. The national grid is already really weak and confronting a batch of proficient and fiscal issues which clearly means that it does non hold the possible to supply electricity to the sections which are non acquiring it. So the authorities has to implement a scheme with the aid of which it can carry through the demands of the industry and of the disadvantaged population.
The authorities can finance independent stand-alone undertakings. These undertakings can work in countries where there is no electricity.The undertakings can besides be setup by business communities who can so sell the electricity to little and average graduated table units in the fabric industry. This manner the units would hold the surety of regular supply of electricity without any outages. The bottom line is, allow the people who are populating inA areasA that do non come under the national grid, do whatever they can to provide themselves with electricity without any authorities engagement.
3. Level the national grid
The national grid demands to be dismantled and provincialized, because under the 18th amendment, the net incomes of power coevals go to the state that is bring forthing the power, meaningA if electricity is being produced at Tarbela, royalties of that are being paid to KP Government by all other states.
However, they sell it to the national grid and so the national grid sells it down to the District Electrical Supply Companies who farther sell the power to the consumers. This manner, if there is a short-fall, national grid chooses the electricity supply forms and hence decides which countries suffer outages the most.If the authorities dismantle the national grid and alter the electricity supply to an unfastened market, where provincial grids can purchase energy straight from the beginning, it would better the power supply and be more financially good for the power bring forthing state. This manner, the states with the most issues with electricity supply can merely outbid the others to acquire plenty for their local demand. This would non be denationalization but ‘provincialization ‘, and will promote provincial authoritiess to get down making more for their people alternatively of trusting on the federal authorities.This can finally take to states working harder to upgrade their grids and cut down their line losingss as their people would cognize precisely who to fault if the power goes out.With such unhealthy conditions, reinforced by the worsening foreign militias, the state is bound to confront low exports and high imports. There is pressing demand to take stock of the state of affairs before catastrophe hits the premier industry of the state.
An immediate industry resurgence bundle is desperately needed for the Restoration of the wellness of our ill units.There are other jobs which need to be fixed in order to rejuvenate the industry. The participants in the fabric industry big or little feel that the price reduction rate charged from them is really high which makes it about impossible for the little participants to borrow money for enlargement intents. Therefore, the involvement rate should be lowered. Even if that is non possible for the industry in general, a particular bundle for the fabric industry should be designed so that capital is available for new workss.