FP Staff Report
KARACHI: Anwar Ahmed Tata, Chairman of All Pakistan Textile Mills Association (APTMA) has said that APTMA has decided to disassociate itself with the Ministry of Textile Industry due to its discriminatory policies.
Addressing a press conference here at APTMA House on Tuesday, Tata appealed President Zardari and Prime Minister Gilani to intervene and provide jJustice to the Spinning Industry.
He said that if no action by the Ministry of Textile Industry is taken within ten days, APTMA will go on strike followed by further protests in any manner.
He informed that the Ministry of Textile Industry has become a party and unduly supporting the downstream industry. He further said that the negative attitude of Ministry of Textile Industry will badly hurt the spinning sector which is in its revival stage after three years extensive shocks due to shortage of raw material, high cost of doing business and international recession and has suffered huge losses thus affecting its viability resulting in piling up of non performing loans in the banking sector out of which more than 30 percent belongs to Spinning Industry. In spite of repeated appeals to the government to save this capital intensive sector no assistance has been provided, he added.
Anwar Ahmed Tata said that the ministry of textile industry took unilateral decision to reduce the quantitative restriction on the export of cotton yarn with out taking APTMA in confidence even though APTMA has always been against any restriction of export of cotton yarn and this further reduction and withdrawal of exemptions will deal a fatal blow to the spinning industry and this will result in distortion of the entire textile chain.
APTMA Chief said that Pakistan's Spinning Industry is the World Class Industry and a huge investment in foreign exchange has been made to ensure abundant supply of yarn for domestic industry.
He said that if the government does not lift the restriction/quota on export of yarn our members will loose their valued customers, market share and this will also damage the reputation of Pakistani suppliers. He urged the government that it should provide duty free import of manmade fiber and abolish all countervailing measures to reduce pressure on the consumption of cotton and encourage use of manmade fiber.
He said that after the restarting of closed spinning units the overall production of cotton yarn in the country has increased up to 241,000 tons per month which can be verified by the data of Federal Bureau of Statistics. Export of cotton yarn from July 2009 to January 2010 is about 60,000 tons per month which is 25 percent of the production of cotton yarn as per past practice, he noted.
Chairman APTMA said that the government interference is destroying the free market mechanism and this would directly hit the downstream sector in times to come. He said that Spinning Sector imports around three to four million bales of cotton every year to meet its requirement and in case such policies of the government continues, spinners will be hesitant to import cotton which will result in closure of mills thus curtailing further yarn production.
He said that government should not penalize the spinning sector in order to protect the vested interest of a few. The government should provide incentives to the downstream industry from its own resources if so desired.
He urged that government should encourage local suppliers of yarn through economic solutions such as reduced markup rates on short and long term loans and reduction in income tax rate from 35 percent to 5 percent to encourage local sales of yarn. He said that we believe in free trade mechanism and the development of local industry through efficiency, productivity and competitiveness.
He further urged the government to review its policies and immediately lift the quota on export of yarn in the best interest of the industry.