Pakistan : Pakistani Textile Firms To Move Ops To Bangladesh

DHAKA, Nov 28 Asia Pulse - A plan by some Pakistani entrepreneurs to relocate their textile units to Bangladesh has prompted the Islamabad government to rethink Pakistan's export strategy.

A 10-member Pakistani textile delegation to Bangladesh early this month expressed the interest to set up textile units here to take advantage of Bangladesh's market access to major up markets. 

Pakistan's Textile Ministry has called a meeting of major players of the textile sector to know their concerns and worries as it has noticed some aggressive complaints from bedwear manufacturers and exporters, the Daily Times of Pakistan reported Saturday.

The report said the plan for shifting production units to Bangladesh by some of the leading industrialists rang alarm bells in government circles.

A recent announcement by Bangladesh offering tax-holidays to the Pakistani textile industry has attracted some of the prominent textile industrialists, who now plan to shift their production units.

The situation has pushed the Islamabad authorities to offer incentives to the over US$8 billion export industry, apparently to stem capital flight from the country.

"I am due to meet textile representatives," Syed Masood Alam Rizvi, federal textile secretary, told the newspaper.

He said major interest of the textile units, planning to operate from Bangladesh, was to get broader market access, as that country did not face tariff barriers like Pakistan from European countries.

"So, the issue is not the production cost; it is the market share, which one can get better while exporting textile goods from Bangladesh compared with Pakistan," said Rizvi.

The Bangladesh government last month offered tax-holiday to the Pakistani textile industry as the developing Asian country is eyeing US$1 billion in foreign investment within a year.

The Bangladesh offer did not go unheard as a 10-member delegation of leading bedwear manufacturers and exporters visited Bangladesh in early November and held a series of meetings at the Bangladesh Board of Investment, the ministry of commerce and the ministry of industries.

The Pakistan government seems serious about the issue and has come up with a plan to hear the industrialists and decide the textile export strategy in a bid to avoid major damage.

"We would definitely address the textile industry's concerns," said the federal textile secretary."The government really wants to know the problems and issues of the country's most progressive industry, and then it would decide the line of action."

He said the government was already negotiating with the European Union authorities on the generalised system of preference (GSP) and the anti-dumping issue, which could give positive results.

The beadwear exporters witnessed a sharp decline in orders from European countries after the EU in March 2004 imposed a 13.1 percent anti-dumping duty on imports from Pakistan, claiming that the cheap Pakistani products were harming the local textile industries.

Later, the Pakistan government announced that it would readdress the issue and conduct a fresh inquiry, but the matter was not resolved as desired by the local industry and exporters.

"Bedwear exporters are seriously considering moving over to Bangladesh," said a senior bedwear exporter, who recently returned from Bangladesh and asked not to be named.

"Actually, the exporters and manufacturers are really disappointed because the way our government handled the issues of anti-dumping duty with the EU and market access with the US."

He said the failed strategy led to non-tariff barriers from the EU, which had not only imposed anti-dumping duty on bedwear exports but had also withdrawn GSP benefits from Pakistan.

Pakistan, which entered the WTO regime in January 2005, is among top five textile goods exporters of the world. On an average, the country exports textile products worth more than $8 billion every year.

Bedwear is one of the five items belonging to a billion-dollar club of the textile groups, including yarn, cloths, knitwear and readymade garments.

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