The Chairman of Interloop Limited, ones of the world’s largest hosiery manufacturers, states that Pakistan’s textile industry should receive statutory protection.
Chairman Musadaq Zulqarnain was interviewed by MG Link to discuss the future of the textile sector in Pakistan, which has enjoyed significantly high exports and is likely to receive favourable terms in policy.
Interloop is the foremost textile company in Pakistan by market capitalisation; when it went public in 2019, Interloop raised a staggering 4.8 billion PKR.
Musadaq Zulqarnain spoke on the hindrance that was presented by production shutdown during the peak of the pandemic, resulting in a susbstanital decrease in profitaility.
He harbours hope that order flows are likely to bounce back as the COVID-19 vaccine is widely distributed, but warned that orders depend on the broader macro economy, especially disposable consumer income, which appears to be significantly cut back.
Demand may re-emerge, however, if generous stimulus policies provide the impetus for consumer patterns.
Speaking on Pakistan’s marked increase of textile exports, he says:
“Now coming to what triggered the latest upward trajectory of exports: the fact that Pakistan operates in a very basic segment, like t-shirts, fleece garments, under wears, socks, jeans etc, proved to be a blessing in disguise. All of these happened to be in high demand during Covid-19 so the orders grew while that of fashionable garments were down. Secondly, consumption of home textiles, which is our strong suit, went up.”
“There’s another largely unnoticed factor: a huge share of garments and knitwear supply in the US comes from Central and South America and all those countries were badly hit by Covid-19. A fraction of that demand was diverted to Pakistan, which was on top of some orders from India and even China. Then obviously the exchange rate became reasonably favourable as well, which was coupled with energy rates getting more competitive with the rest of the markets. All of these fueled the export growth in the value added garments.”
The Chairman concluded that statutory protection must be provided for Paksitan’s textile industry. If the government was to offer incentives based on key performance indicators being met, the industry would also expand and prop up the economy. In order to strategically increase exports, significant investment must be a part of the equation.
Source: MG Link
