The following research report contains market research, analysis, statistics and business intelligence relating to research on Textile Machinery And Equipment In Pakistan.

Order the 2008 Edition of this report now by adding this item to your cart or for faster service call us at 212-398-5505 to speak to a customer service representative.

ABSTRACT
Textiles is the most important industry in Pakistan. It accounts for approximately 40 percent of manufacturing employment, over 60 percent of total exports, and over 30 percent of value-added production. Pakistan's textile industry, based on locally-grown cotton, produces cotton yarn, cotton cloth, and made-up textiles and apparel. Its small woollen industry uses mostly imported fibers to manufacture woollen yarn, acrylic yarn, fabrics, shawls blankets and carpets. The polyester fiber and yarn industry has also grown significantly in recent years, and meets over 80 percent of country requirements, but viscose and acrylic fibers are imported. The artificial silk and synthetic weaving industry remains largely in the unorganized sector. In Pakistan Fiscal Year (PFY) 1998 (Pakistan Fiscal Year starts July 1 and ends June 30), Pakistan had a total of 503 spinning mills with an installed capacity of 8,332,000 spindles and 145,000 rotors. The weaving industry has 53 integrated units (composite units with spinning and weaving in one unit) with an installed capacity of 14,130 looms; 512 shuttleless weaving units with an installed capacity of 13,340 1ooms; and approximately 30,000 units in the power loom (shuttle loom) sector, with an estimated 225,253 looms. In PFY-97 it additionally had 670 finishing units with a production capacity of 3,460 million sq. meters of fabric per annum, 700 knitwear units with 15,000 knitting machines, and 4,000 garment units with 160,000 industrial and 450,000 domestic sewing machines.

Pakistan's textile industry is based on domestically-grown cotton. Imports meet the shortfall of domestically-grown medium staple cotton and the requirements for long staple and extra-long staple cotton. Exports of all textiles in PFY-97 totalled a value of USD 5.4 billion. The major buyer of textile clothing and accessories was the United States, which purchased USD 309.2 million of goods.

Pakistan's spinning and weaving industry is in a crisis, largely owing to higher prices for domestically-produced cotton, financial mismanagement and the subsequent difficulty in obtaining loans for new, technically-advanced machinery. Loans from financial institutions are unavailable to the spinning industry, and several weaving units are working under contract for lack of working capital. The East Asian crisis and rising electricity charges have further exacerbated the situation. In late 1996, Pakistan's interim government announced a package each for the industry's spinning and the value-added sectors. For the spinning sector it announced a number of incentives, including the removal of cutoms duty on the import of cotton, excise duty on polyester fiber and the reduction of regulatory duties on viscose and acrylic fibers. To encourage exports by the value-added sector it reduced the regulatory duty on polyester chips, waived regulatory duty on industrial sewing machines and knitting machines and spares and liberalized the import of textile processing machinery. These measures have been partly successful: made-up textiles have continued to show profit, with the value of exports of ready-made garments rising by three percent in PFY-98. As demand from Pakistan's traditional buyers of yarn has declined, excess yarn has begun to be absorbed by its knitwear industry, which is now expanding at a rate of 15 to 17 percent annually. Pakistan's woollen spinning industry is saturated, and its woollen weaving industry, based largely in the unorganized sector, is not expected to grow over the next two to three years owing to the high cost of inputs, limited demand and the availability of better quality smuggled fabrics.

The current local production of textile machinery is negligible, and is comprised mainly of spindles and ring cups for the spinning industry, power (shuttle) looms for the weaving industry, simple dyeing and finishing equipment, knitting and domestic sewing machines and accessories such as rubber cots, plastic bobbins and wire for carding machines. Textile machinery imports have declined steadly in recent years. Imports fell from USD 789.2 million in PFY-93 to USD 352.7 million in PFY-94, USD 294.9 million in PFY-95, USD 187.0 in PFY-96 and USD 129.0 million in PFY-97. The import market for PFY-98 rose to USD 213 million. Trade sources estimate that the U.S. share in PFY-98 was USD 19 million, or 8.92 percent of imports. Trade sources estimate that the current annual U.S. import share is USD 20-30 million only.

Pakistan's excessive economic reliance on the textile industry now necessitates the upgrade of its low value-added textile products to higher value-added products and the development of additional export markets. The Government of Pakistan (GOP) has
reportedly constituted a textile commission to examine the problems of the textile industry and guide its future planning in a effort to turn this vital sector of the country economy into a healthy and internationally competitive industry. The upgrade to value-added production will require more sophisticated machinery. Trade sources believe that given a favorable rupee/dollar parity, the textile industry may be expected to grow by as much as 10 to 15 percent annually over the next 2-3 years.

European and Japanese suppliers dominate the Pakistan market for textile machinery. Other prominent suppliers are Korea and China. These suppliers respond promptly to trade inquires and have appointed aggressive local agents to represent them and to follow-up on trade leads and offer after-sales service. They additionally use marketing strategies such as seminars and machinery demonstrations to promote their products. Pakistani buyers have over the years patronized trade fairs in Europe and Japan, where U.S. suppliers have little or no presence. End-users in this market uniformally comment that although U.S. machinery is both durable and technologically advanced, it is relatively expensive and its manufacturers appear disinterested in this market as they do little to establish their presence and to follow-up on trade leads. U.S. manufacturers can find prospects for the sale of laboratory equipment, quality control sytems, jet spinning equipment, airconditioning plants, and for bleaching, dyeing, printing, finishing and knitting machines. They should adopt marketing strategies such as trade promotional events, advertise their products in international trade publications, appoint capable agents to represent them, follow up on trade leads and provide after-sales service. They may also consider joint ventures with Pakistani firms for machinery manufacture through the provision of technical know-how and financing.
Trade barriers for the sale of textile or other machinery to this country are negligible. Customs duties vary from 10 percent to 45 percent, charged on an ad valorem basis. To this is added a 12.5 percent sales tax on the duty-paid value of the imports. The GOP additionally offers a scheme for the import of machinery free of these taxes for the establishment of manufacturing units or the balancing, modernization and replacement (BMR) of existing units if established in bond. A. MARKET HIGHLIGHTS AND BEST PROSPECTS

In PFY-98 Pakistan offered an import market of USD 213 million for the sale of textile machinery, equipment and parts. Statistics for domestic production are not available, but trade sources report that manufacture, which is geared to demand, is at the present time negligible. The market has declined drastically over the last six years. In PFY-93, Pakistan imported USD 789.2 million worth of textile machinery. Imports fell in subsequent years to USD 352.7 million in PFY-94, USD 294.9 in PFY-95, USD 187.0 million in PFY-96 and USD 129 million in PFY 97. Given improved financial conditions, the import market share is expected to increase by 10 percent annually over the next three years.

The spinning sector will offer limited opportunties for the sale of equipment and machinery as higher input costs, lower demand and heavy borrowings from financial institutions have caused several units to either close or curtail their operations. In PFY-97 out of the total number of 503 units with an installed capacity of 8,332,000 spindles and 145,000 rotors, only 394 units with 6,455,000 spindles and 89,000 rotors were working. The GOP has allowed the export of raw cotton and its bid at increasing revenues through the imposition of a General Sales Tax on this as on other sectors of the economy, has further worsened the plight of the textile sector. The country has now, however, started to receive inquiries from Chile and the Honduras. In addition, excess yarn is now being absorbed by the domestic knitting industry. As a result, the spinning sector will offer limited opportunites for the sale of spinning machinery for the BMR of existing units during the next 2-3 years.

Pakistan's weaving sector has been adversely affected by the increase in yarn prices, higher power tariffs, the devaluation of East Asian currencies, the lack of professional management and the lack of instituitonal financing. Many of the country's weaving mills at present work only under contract for lack of working capital. Illustratively, in PFY-97 out of 201,540 looms installed in the power sector, only 165,000 or 81.24 percent were working; 6,211 or 43.96 percent of the 14,130 looms in integrated textile mills were working; and 10,000 or 76.92 percent of the 13,000 looom installed in the shuttleless weaving sector were working. Despite these factors, the weaving sector shows scope for both expansion and improvement. Decreasing demand for yarn from overseas buyers and the likelihood of higher earnings from the export of finished products are making more and more businesses turn to the export of cloth and value-added items, thus creating a market for shuttleless weaving machines as
well as for knitting and sewing machinery. Most of the country's dyeing and finishing units are small and use locally-manufactured machinery based on obsolete technology. The value-added sector therefore offers the largest potential for the export of dyeing, finishing and printing machines, for knitting machinery for the
expansion of exisiting knitting units, and for sewing machines. Packages for the spinning industry and for the value-added textile sectors, announced by the country's interim government in late 1996, have assisted the growth of the ready-made garments sector. Another GOP incentive, the Open Bond Scheme, allows the import of machinery for the establishment of new units or for the BMR of existing units free from customs duties and sales tax, if the unit is established in bond. The scheme does not, however, apply to the cotton yarn industry. In another order, the GOP allowed an exemption on sales tax for several types of plants and machinery used for the manufacture of taxable goods, as well as machinery used for the production of petroleum products, several types of chemical products and certain other specified industries. Despite these incentives, the growth of Pakistan's market for textile machinery and equipment is expected to be severely retarded both owing to a lack of available financing and to the increasing costs of imports resulting from the declining value of the rupee.

Best prospects for the sale of textile machinery are for following machinery and equipment:

8445------- Laboratory equipment for textile spinning and weaving
8445------- Qaulity control systems for textile spinning
84452000002 Jet spinning equipment
8415------- Air-conditioning plants
84435010005 Textile printing machines
84514000009 Textile dyeing machines
84519000909 Textile finishing machines
8447------- Automatic knitting machines
845221----- Automatic sewing machines
84463000909 Projectile looms
84512900--- Drying machines
84719990--- CAD/CAM Systems
84515000006 Textile cutting machines
B. COMPETITIVE ANALYSIS

The domestic manufacture of textile machinery is concentrated in three cities, Karachi, Faisalabad and Gujranwala and is today largely limited to manufacture for the power looms sector. The public sector formerly had three production units engaged in manufacturing for the textile industry. One of these, a Karachi-based unit which manufactured cone winders, has been privatized and has been unoperational for some time now. The second unit, a Lahore-based manufacturer of ring frames, has now changed its product line to cater to the agricultural sector. The third unit, also Lahore-based, had an average annual production of 600 automatic cop-change shuttle looms, ranging in size from 60 to 120-inches. Technical know-how for their manufacture has been obtained from Iwama, Japan. The unit can also manufacture a variation of these looms by converting the shuttle looms to shuttleless operations by employing a single rapier. The company, which is currently in the process of shifting its manufacturing facility, suspended its looms manufacturing operation for some time, but plans to soon commence manufacturing approximately 300 shuttle looms during the first year of resumed operations. It is interested in obtaining technical know-how for the manufacture of shuttleless airjet looms, and is presently considering Chinese technology owing to the lower prices offered. The private sector manufactures manual, semi-automatic, and automatic looms, and some manufacturers have recently commenced manufacturing shuttleless looms. Many of the smaller businesses have closed due to a lack of orders, but a few mills continue to manufacture at half or quarter of their normal production levels. The manufacture of power looms for the artificial silk industry has been concentrated in Gujranwala, and to a lesser extent in Faisalabad. Production has declined since 1992 due to lack of demand, and most mills are reported to be closed. Other units manufacture spindles, ring cups and other spinning machinery accessories such as rubber cots, plastic bobbins and wire for carding machines. All other machinery is imported.

Pakistan's major suppliers of textile machinery in recent years were Germany, Japan and Switzerland, and, in PFY 96 and PFY-97, the United States. Other suppliers are Italy, the United Kingdom and South Korea. Although the import market for textile machinery shrank from USD 352.7 million in PFY 94 to USD 129 million in PFY-97, the U.S. share increased from two percent in PFY-95 to eight percent in PFY-96, and 15 percent in PFY-97, making the U.S. the third largest supplier after Switzerland with an import market share of 21 percent, and Japan with a share of 16 percent. In PFY-98, the U.S. share was USD 19 million, or 8.92 percent of imports, making it the fifth largest supplier.
The major exporter to Pakistan that year was Japan with a share of 17.84 percent, China with a share of 14.08 percent, Germany with a share of 13.15 percent and Switzerland with a share of 12.21 percent.

U.S. machinery has been and still is unknown to Pakistan's spinning and weaving sectors, where Japanese, European and Chinese manufacturers predominate. Prominent suppliers are Shanghai and Jingwei from China for ring frames; Savio Machine Tessili Sr.L., Italy for automatic cone winders and F. Marzoli and Co., Italy for the complete range of spinning machinery; Crosrol Ltd., U.K. for carding machines; Truetzschler, Germany for blow room machinery, high production cards and high speed draw frames, and W. Schlafhorst, Germany for automatic cone winders; Rieter Machine Works Ltd., Switzerland for auto leveller draw frames, combers and blow rooms; Toyoda Automatic Loom Works Ltd., Japan for spinning machines and Murata Machinery Ltd., Japan for auto cones. As there is no room for expansion in Pakistan's spinning industry, sales to this subsector are expected to be limited to machinery and equipment required for the balancing, modernization and replacement of existing units.

Investments in the weaving sector in recent years have been in shuttless looms, the most popular being projectile looms from Sulzer, Switzerland. Airjet looms are less popular despite lower prices because increasing power tariffs have made them uneconomical. Popular brands of airjet looms are Tsudakoma, Toyoda and Nissan from Japan; and Picanol from Belgium. The popular rapier loom manufacturer is Nuova Vamatex S.P.A., Italy. U.S. presence in the weaving industry is limited to warping machines from Westpoint Foundry and Machine Co. and dyeing
and finishing machinery from Kleinewefers Textile Machinery Corp. Given stable economic conditions, the weaving industry may be expected to grow by 10 percent per annum. There is good potential for the development of Pakistan's textile printing and finishing industry. As the entire industry moves towards value-added exports, the printing and dyeing units will require state-of-the-art dyeing, printing and finishing machinery to enable them to compete in world markets.

The woollen spinning industry, based largely in Lahore and Gujranwala, is presently saturated and shows no growth prospects. Prominent machinery suppliers are Italian, French and Rieter Ingolstadt, Germany for semi-worsted yarn manufacture; and Savio, Italy; Cognetex SPA, Italy; SACM, France; and Platt, U.K. for worsted yarn. The smaller weaving units which comprise the bulk of the weaving industry use locally-manufactured looms.
Others use machinery from Toyoda, Howa or Suzuki in Japan; Sulzer in Switzerland, Picanol in Belgium, as well as Indonesian, Korean and Indian machinery. The weaving industry is not expected to grow over the next 2-3 years. The only expected growth is in the knitting sector, which uses second-hand machinery from Korea and Italy, European machinery, or flat-bed knitting machines from Japan and China. The seasonal nature of demand and availability of better quality smuggled fabric at attractive prices discourage investment. U.S. machinery is not known in the woolen industry and its technology is considered to be obsolete. Visitors to The International Textile Machinery and Accessories exhibition in Europe and the Osaka Textile Machinery Exhibition in Japan complain that U.S. machinery dispalyed at these events is limited to machinery for non-wovens and for quilting.

The knitting industry offers excellent potential for sales. Almost 98-99 percent of the country's entire production, currently valued at USD 8 billion, is exported. The largest market is in the U.S., followed by Europe and the Far East. The industry has a high growth rate, and, in order to maintain and expand market share, manufacturers must use state-of-the-art machinery and equipment. The machinery currently used is largely European: circular knitting, dyeing and finishing machines are from Europe and the Far East; embrodiery cutting and stitching machines from Japan or Taiwan; and pressing machines are from Japan. Prominent suppliers are Meyer and Cie, and Terrat, Germany; Fukuhara, Barudan, Brother, Naomoto, and Tajima, Japan; Paillmug, Taiwan; and Fong, Hong Kong. Industry sources again complain that the U.S. does not appear interested in this market as it does not respond to inquiries, nor does it conduct marketing to introduce its textile machinery and equipment to Paksitan. They add that although some mills do use U.S. machinery which is acknowledged to be extremly good, its sales have not been backed by after-sales service.

Industrial sewing machinery is not produced domestically. Japan enjoys approximately 90 percent of the import market. Other suppliers are European. Parts for sewing machines are imported mainly from Japan, and, more recently, from Korea and Taiwan. U.S. sewing machines are regarded as being non-competitive in price, range and quality with Japanese machines. The U.S. share of the sewing machine market is limited to very special machines not manufactured elsewhere. Prominent suppliers of sewing machines to the Pakistan market are Juki Corporation, Singer Nikko Co., Brother, Toyota, and Happy from Japan; Camptel and Transmatic from Italy, particularly for tranfer fusing machines
and steam presses. Prominent U.S. suppliers to this market are Gerber Garment Technology, Inc. for computerized sewing machines, and Eastman Export Corporation for cutting machines. The market offers U.S. companies excellent opportunties for the sale of marking and grading machinery as well.

There are no joint ventures in Pakistan for the manufacture of textile machinery and equipment. Pakistan Engineering Company Ltd., Lahore in the public sector uses technical know-how from Japan to manufacture power looms. Some manufacturers have technical-know-how arrrangements with Chinese firms which remain largely unutilized owing to insufficient orders. European and Far Eastern firms regularly have their representatives visit end-users, and also utilize direct marketing techniques. In
addition, foreign suppliers to this market appoint local agents to provide them market intelligence and to pursue sales. These agents import and stock frequently-used spares, provide a warranty for a fixed period of time, and follow up with after-sales service.

Pakistan will require sophisticated machinery as it moves towards value-added production and exports. The limited availability of foreign exchange and the higher cost of finanacing will, however, curtail sales to this market. Financing is unavailable to the spinning sector, and is available to weavers on a selective basis for a maximum period of five years. An unfavorable rupee/dollar parity and high interest rates can be expected to further inhibit growth. U.S. firms interested in gaining a foothold in this market of over 140 million people may consider adopting direct marketing techniques, advertising in local and internationally-known trade journals, paying regular visits to end-users, holding seminars and appointing aggressive and qualified agents to represent them and provide after-sales service, and supplying machinery on a deferred Letter of Credit basis for 180 to 720 days. As an illustration, Sulzer, Switzerland which has dominated the Pakistan market for shuttleless looms, used Swiss credit to support sales, conducted excellent marketing, and offered better pricing and back-up services. It also offered quality looms of greater width and versatility. Picanol looms, introduced in this market almost a decade ago, could not match Sulzer's popularity partly because their suppliers did not offer after-sales service, and partly because the technology used proved uneconomical in Pakistan. U.S. firms may also consider entering into joint ventures with local manufacturers to provide technical know-how and capital. Manufacturers should consider exhibiting at European and Japanese textile industry trade fairs, which are the favored venue for Pakistani textile machinery
buyers. U.S. manufacturers who have entered the Pakistan market and whose products are known to the industry include Westpoint Foundry and Machine Co. for warping and sizing machines, Kleinwefers Textile Machinery Corp. for for dyeing and finishing machines, Sears for dryers and washers, Data Color for spectrophotometers, and Tubular Textile LLC for compactors.
C. END USER ANALYSIS:

The textile industry is today based almost entirely in the private sector as the inefficiency of the public sector units has forced the GOP to privatize them. The three remaining textile units in the public sector are integrated units and are to be offered for privatization in the very near future.
Pakistan's textile spinning industry is presently in a crisis. As a result of poor cotton crops, the withdrawl of cotton subsidy and the export of raw cotton, the industry, whose feasibility has been based on the use of low-priced cotton, is no longer viable. The situation has been further exacerbated by the East Asia crisis, which has affected Pakistan's traditional buyers of yarn. Financing for machinery imports is no longer available. Old spinning are expected to close permanently, while newer mills must be strengthened for the development of downstream, value-added industries and in order to maintain foreign market share. Funding is available for the balancing, modernization and replacement of existing machinery. Financing, price, quality and after-sales service will continue to determine purchase. Given economic stability as well as the importance of the industry to Pakistan's economy, the spinning sector may be expected to grow by ten percent over the next three years.

According to trade estimates, Pakistan's weaving sector has an installed capacity of 14,130 looms in integrated weaving mills; 13,340 looms in shuttless weaving units ; and approximately 200,500 to 225,250 looms in the power loom sector. The looms installed in the integrated units are old and less than approximately 40 percent are working. The independent weaving units are a relatively new phenomenon in the Pakistan market, and have been created as a result of market demand, government incentives and the move towards higher quality products. Industrialists, too, display a preference for separate spinning and weaving units, based on tax and management considerations. These units use new and second-hand rapier, projectile or air jet looms, nearly 75 - 80 percent of which are working. They produce higher quality and higher value fabric mainly for export. The power looms sector has registered a phenomenal growth in the last two decades, due both to government policies and market demand. It produces comparativly low value-added grey cloth of inferior quality, but supplies 91 percent of the country's total cloth output. In recent years, market forces have encouraged a move towards higher technology. Weavers use domestically-manufactured automatic cop-change looms. Over 80 percent of the power looms are working. The problems of the power loom sector are based
largely on the non-availability of cotton yarn at reasonable prices, as well as on financing. Banks are generally reluctant to provide finance for working capital. In addition, these small units find it difficult to avail of credit offered on the usual terms. Both the shuttleless weaving sector and the power loom sector need to be strengthened to develop the value-added and garment industry. The power loom industry needs concessional financing for the purchase of local looms or of second-hand or reconditioned shuttleless looms. Given a favorable exchange rate for the rupee against the dollar and stable economic conditions, the weaving industry may be expected to grow by 10 percent per annum over the next three years. As in the spinning sector, financing, price, quality, and after-sales service will continue to determine import market shares for weaving machinery. Although financing is available to the weaving sector, it is on a selective basis for not more than five years.

Pakistan's finishing industry is comprised of approximately 670 units, the majority of which are independent units and complimentary to the weaving industry. Their installed capacity is old and needs replacement. The integrated units are reported to have a capacity utilization of only 35 percent of installed capacity as most of their machinery is also old and uses outdated technolgoy. The smaller units use mostly locally manufactured machinery. Approximately 80 percent of the country's total annual production of cotton and synthetic fabric, estimated at 4,781 million sq. meters, is processed. About 50 percent of the processing industry's capacity is over 15 years old and requires replacement. Declining demand for low count yarn and increasing export market demand for finished fabrics will force Pakistan's textile industry to diversify its textile base. The country will have to make considerable investments in bleaching, dyeing, printing and finishing machines. Quality and price are considered to be key factors in this sector.

Pakistan's knitting industry comprised of approximately 700 separate or vertically integrated units with approximately 15,000 machines, which are either locally-manufactured or have been imported. Nearly 98-99 percent of the country's entire production of knitwear, valued at nearly USD 670 million in PFY-97, is exported. The industry has been growing at 15-17 percent annually. Exports of knitwear rose from USD 425,113 million in PFY-92 to USD 698,313 million in PFY-96. Despite current economic conditions, the industry is expected to continue to grow at a similar rate through the expansion of existing units. As almost the entire industry's production is exported, buyers are expected to look towards quality and after-sales service in making purchase decisions.

The ready-made garments sector is comprised of 4,000 small, medium and large scale units which together have 160,000 industrial and 450,000 domestic sewing machines. The sector is considered to be the highest value-added sector of the textile industry. Most sizeable buyers purchase machinery through suppliers who offer complete packages, or on the advise of consultants who show a bias in favor of machinery originating in their native land. Sewing machinery is often purchased from
Pffaf Singer in the United Kingdom who offers complete purchase packages for garments manufacture; and from Juki and Union Special from Japan, who offer lower prices for machinery and parts. Buttonhole and rivets machinery is purchased from the button/rivet manufacturer. U.S. machinery is largely unknown in this sector, except Eastman Export Corp. for cutting machines; and Braun for washing machines, for which this company appears to enjoy a monopoly. The sector is considered to be the highest value-added sector of the textile industry, and has exported over USD 617 million worth of garments from July 1997 to April 1998, a 3 percent increase in value over the corresponding period the previous year. Its growth rate, however, is lower than that of the knitwear sector. Lack of skilled labor, quality control and insufficently skilled managerial staff are the main problems faced by the industry. Although financing is available with a mark-up rate of 21 to 22 percent, the industry is not expected to grow over the next 2-3 years. Demand is cyclic, and manufacturers have concentrated their efforts in selling to a few buyers in the European market, resulting in stiff competition. Apart from a few well-established manufacturers, smaller units are expected to either close, or to change hands.

Pakistan's woollen industry is comprised of a total of 118 units with 157,317 spindles and 764 looms. Only 94 mills, however, are operational with 99,413 spindles and 544 looms. The spinning sector uses imported synethic fibers and some wool to manufacture yarn. The spinning sector is considered to be saturated and has shown little or no investment in the last five years. The woollen weaving sector produces fabric, shawls, woolen blankets and carpets. It is comprised largely of mills in the unorganized sector which use locally-manufactured machinery. In addition, there are five composite woollen mills in the country, using imported machinery from Japan, Switzerland, Belgium, Indonesia, Korea and India. This sector is not expected to grow over the next 2-3 years owing to the seasonal nature of demand and the availability of higher quality imported fabric at attractive prices. The woollen industry's knitting sector, which is comprised mainly of units in the unorganized sector, has, however, shown some growth, importing second-hand machines for Korea and Italy, and flat-bed knitting machines from Japan and China. These machines can now be manufactured locally.

Financing for this sector is unavailable. Opportunties for machinery sales will be limited to second-hand machinery.

Pakistan's synthetic textiles is comprised of a few sizeable, well-established units. Polyester, nylon and acetate filament yarn manufacturers together have an installed annual capacity of approximately 100,000 metric tons. Polyester filament yarn manufacture capacity alone is over 90,000 metric tons. The remaining requirements for viscose, acrylic and polyester fiber and yarn are met through imports. Synthetic or blended yarn production in PFY-97 was over 297,000 metric tons, or over 16 percent of the country's total yarn production. The artifical silk and synthetic weaving industry in mostly in the unorganized sector. There are approximately 90,000 looms, comprised of locally-manufactured automatic looms, second-hand water jet looms producred from the Far East, and second-hand shuttleless looms from Sulzer, Switzerland, procured from the U.S. and from Europe. Approximately 40,000 of the looms are domestically-manufactured automatic looms and about 7,000 are imported water jet and shuttless looms. Only an estimated 47,000 looms are currently in production owing to the limited availibity of credit, the downswing in export sales resulting from a reduction in the duty drawback, and the slump in the international market. According to trade sources, the export of synthetic textiles has fallen from USD 648,236 million in PFY 1994 to USD 496,259 million in PFY-97 as a result of high duties and taxes on the import of man-made fibers. In late 1996, however the GOP removed excise duty on polyester fiber and reduced regulatory duties on viscose and acrylic fibers. It also reduced the regulatory duty on polyester chips. These measures reportedly been partially successful. Given prevailing economic conditions, the industry is not expected to show growth over the next 2-3 years. Mills can be expected however, to move towards the purchase of machinery, particularly water jet looms, for balancing, modernization and replacement in an effort to increase efficiency and lower costs.
V. MARKET ACCESS

Pakistan does not restrict the import of textile machinery and equipment. Trade barriers including high tariffs, additional surcharges and a variety of excise duites and sales taxes with different applicability on domestic and foreign goods, distorted prices in the domestic market and encouraged smuggling. These tariffs have since been lowered and import and export procedures simplified. Maximum customs tariff rates, applicable on an ad valorem basis, have been reduced in a phased manner from 92 percent in June 1994 to 45 percent in March 1997. Customs duties for textile machinery now vary from 10 percent to 45 percent. Imports are further subject to a 12.5 percent sales tax payable on the duty-paid value of the imports. Other taxes include a five percent income tax adjustable against coporate tax, a two percent service clearing charge and nominal wharfage charges. Special exemptions further encourage industrial development: The GOP's Statutory Revisionary Order, SRO 962(I)90 exempts plant, machinery or spares thereof which are not manufactured locally and which are imported in order to establish a manufacturing unit or for the expansion or balancing, modernization and replacement of an exisiting unit, from the payment of customs duty, sales tax surcharge and iqra (educational tax)if established in bond under the Open Bond Manufacturing Scheme. The SRO applies to a wide number of industries, including the whole of the textile industry, but excluding cotton yarn. The GOP's SRO 582(I)/98
allows certain plant and machinery, other than generators, generatings sets, wire and cables, exemption from sales tax. The exempted machinery includes plant and machinery operated by power of any description, which is to be used for the manufacture of taxable goods; apparatus and appliances including metering and testing apparatus, and appliances specifically adapted for use in conjunction with machinery used for the manufacture of taxable goods; mechanical and electric control and trasmission gear adapted for use in conjunction with machinery qualified for exmeption from sales tax; and component parts for all machinery qualified for exemption from sales tax. Maintenance spares for current use for the exempted machinery will not be allowed the sales tax exemption.

The Import Policy Order for PFY-99 allows the import of machinery against cash resources for new units and for expansion of the existing units, including for balancing, modernization and replacement. It also allows the import of second-hand and reconditioned machinery allowed to industrial consumers and commercial importers. Commercial importers are to be subject to preshipment inspection to ensure that the machinery has reasonable useable life. The import of the following second-hand or reconditioned textile machinery is not allowed: HS 84483300: spindels, spindle flyers, spindle rings and ring travellers; and HS 84510000: drycleaning machines.

Customs duties are 10 percent for machines for extruding, drawing, texturing or cutting man-made textile materials; carding machines, combing machines, drawing or roving machines, and lap machines; textile doubling and twisting machines; power looms either old or used, or of a type not manufactured locally; flat and circular knitting machines, embroidery machines, machines for making tulle and lace, machines for covering buttons with textile threads and parts and accessories for these machines or for their auxiliary amchinery; dobbies and jacquards; card reducing, copying, punching or assembling machines; parts and accessories of weaving machines or of their auxiliary machinery; drying machines, pressing machines, washing, bleaching machines, and dyeing machines; machines for reeling, unreeling, folding, cutting or pinking textile fabrics, automatic and industrial sewing machines and parts for these machines. Customs duties are 25 percent ad valorem for textile spinning machines other than old, used or reconditioned machines; looms of a width not exceeding 30 cms., and for weaving fabrics of a width exeeding 30 cms., shuttle type; spindles, spindle flyers, spining rings, ring travellers and bolsters and parts of spindles; reeds for looms, healds and heald-frames; household type sewing machines not imported in a a CKS/SKD condition. Customs duties of 35 percent are charged on an ad valorem basis for the following: Power looms of a kind manufactured locally; and tops and flats for card clothing machines. Customs duties are 45 percent ad valorem for the following: washing machines of a capacity not exceeding 10 kgs., including machines which both wash and dry; washing machines of a dry linen capacity exceeding 10 kgs; and parts for these machines.

Pakistan does not impose safety standards for textile machinery and equipment. The country does not have a uniform or universal system for the imposition of labeling and marking requirements. Individual industries such as the pharmaceutical industry are subject to the regulations imposed by specific bodies such as the Ministry of Health. Document requirements for textile machinery as for other imports are: certificate of the country of origin; bills of lading; invoices; packing lists; copies of letters of credit; and
insurance certificates. Imports against cash are permissible from all countries of the world except Israel, nor does Pakistan allow the import of goods originating from Israel.

Although end-users well-acquainted with machinery manufacturers appropriate to their requirements sometimes prefer to import directly, the usual and most effective channel for sales of machinery, equipment and spares is through a reliable agent. Foreign firms appoint local agents for the Pakistan market to provide them with market intelligence and to follow-up on sales. The most popular and possibly the most effective distributorship arrangement in Pakistan is the exclusive agency agreement. The exclusive agent receives commmission on all sales of the product within the country, regardless of the channels through which they were ordered. The agent often imports and stocks spares which are regularly required by end-users. He may also provide after-sales service.

Financing is the key to sales to the Pakistan market. Sales to Pakistan's government organizations are curtailed due to extremely limited foreign exchange reserves. Excessive borrowings by the GOP has left very little funds for the private sector. The textile industry has become unhealthy owing to the increasing costs of inputs such as cotton, unprofessional management, unethical trade practices such as overinvoicing of imports, as well as high power tariffs and mark-up rates. Financing is, however, available for balancing, modernization and replacement of exisiting units, and at concessionary mark-up rates on loans to finance the export of blended polyester and cotton yarn. It is also available on a selective basis to weaving units at mark-up rates varying from 18 to 24 percent for a period not exceeding five years. The preferred means for payment of imports into Pakistan is against a confirmed and irrevocable letter of credit. Industry sources suggest a deferred letter of credit basis on a deferred basis for 180 to 720 days. Japan has sold textile machinery to Pakistan against supplier's credit, and Switzerland against tied loans. However, it is recommended that U.S. firms use an irrevocable/confirmed Letter of Credit.

Trade Promotion: There are no trade fairs of textile machinery manufacturers in Pakistan. Most end-users and agents visit the International Textile Machinery and Accessories fair which is held in Europe every four years; or the Osaka Textile Machinery Exhibition which is held every four years in autumn in Osaka, Japan. Visitors claim both events have little or no U.S. representation. Trade events such as catalog shows, video catalog exhibitons, trade missions and seminar missions organized
by either state, the industry or the U.S. Department of Commerce, can help to effectively introduce new products, generate sales leads and locate suitable overseas agents or distributors and joint venture partners. Single company exhibitions coupled together with technical seminars can also be successful in attracting potential buyers. Two factors exert a major influence on buyers and enhance the attractiveness of their products: a company's perceived professional and personal commitment in assisting and supporting a client; and the company's demonstrated support and corporate commitment to its local representative. Although U.S. goods are usually regarded as being expensive in comparison to those of its competitors, they are generally believed to be of a higher quality. Buyers uniformally believe that U.S. firms do not exert enough time and
effort to develop their presence in this market. In addition, U.S. suppliers have not offered credit and terms as were offered prior to the imposition of sanctions by their competitors. U.S. firms may consider establishing joint ventures with local partners by providing them financing and technical-know how. They must consider wider and more active participation in trade fairs frequented by Pakistani end-users as well.

KEY CONTACTS

Government
Ministry of Commerce, Goverment of Pakistan
Block A, Pakistan Secretariat
Islamabad, Pakistan
Contact: M. Iqbal Farid, Secretary
Tel: 92-51-9210277
FAX: 92-51-9205241

Ministry of Industries and Investment
Goverment of Pakistan
Block A. Pakistan Secretariat
Islamabad, Pakistan
Contact: Aftab Ahmad Khan, Secretary
Tel: 92-51-9211709 & 9210192
FAX: 92-51-9205130

Board of Investment
Government of Pakistan
Ataturk Avenue, Sector G-5/1
Islamabad, Pakistan
Contact: Yusuf Abdullah Secretary
Tel: 92-51-9218267 & 9202845
FAX: 92-51-9217665 & 9215554

Textile Commissioner's Organization
2nd Floor, Kandawala Building
M.A. Jinnah Road
Karachi, Pakistan
Contact: M. Idrees Ahmad, Textile Commissioner
Tel: 92-21-7222742 & 7222741
FAX: 92-21-7222741

Machinery Manufacturers - Public Sector

Pakistan Engineering Co. Ltd.
Shahrah-e-Quaid-e-Azam
Lahore, Pakistan
Contact: Javaid Sahibzada, Managing Director
Tel: 92-42-7356292; 7324338; 7320225-6
FAX: 92-42-7323108

Loom Manufacturers - Private Sector

Siddiq Brothers Engineering Works
Bea WAODA Steam Power Station
Sheikhupura Road
Faisalabad, Pakistan
Contact: Abdul Waheed, Chief Executive
Tel: 92-41-750594; 754668
FAX: 92-41-754921; 754669

Mumtaz Foundry and Engineering Works
(Pvt.) Ltd.
Nishatabad, Sheikhupura Road
Faisalabad, Pakistan
Contact: Maqsood Ahmed, Managing Director
Tel: 92-41-754141; 751111
FAX: 92-41-751119

Bashir Engineering Works
Jinnah Road
Gujranwala, Pakistan
Contact: Muhammad Bashir, Managing Director
Tel: 92-431-214758; 216196
FAX: 92-431-222893
AGENTS/IMPORTERS

Al-Murtaza Machinery Co.Shaheeh View
Shaheen View, A-18, Block 6, P.E.C.H.S.
Shahrah-e-Faisal
Karachi, Pakistan
Contact: Asif Ali Rashid, Managing Director
Tel: 92-21-4543060-65; 4547688
FAX: 021-4546555 and 4540558

R&R Corporation (Pvt.) Ltd.
105 Queens Center
Maulvi Tamizuddin Khan Road
Karachi, Pakistan
Contact: Mahboob Hasan Rana, Managing Director
Tel: 92-21-5687136; 5687124; & 5687126
FAX: 92-21-5682501 & 5683209

Acmatex Corporation (Pvt.) Ltd.
10-J Block-6, P.E.C.H.S.
Karachi 75400, Pakistan
Contact: Yousaf Rehmani, Managing Director
Tel: 92-21-4540775-7 & 4538261
FAX: 92-21-4538262

Associated Textile Consultants (Pvt.) Ltd.
12/CL-6 Claremont Road
Civil Lines
P.O.Box 4182
Karachi-75530, Pakistan
Contact: Zahid Majeed, Managing Director
Tel: 92-21-5662687 & 5670540
FAX: 92-21-5684870 & 5671225S

SIMAG (Pvt.) Limited
505-506 Al-Ameera Center
Shahrah-e-Iraq, Saddar
P.O. Box 8733
Karachi, Pakistan
Contact: Aziz Bhatti, Chairman
Tel: 92-21-5670757 & 5685470
FAX: 92-21-5670756

Singer Pakistan (Pvt.) Limited
Alharoon Building, Sadar
Karachi
Contact: Ms. Adison Singer, Managing Director
Tel: 92-21-7725460-5
Fax: 92-21-7772017

Rex Machinery Corporation
Rex Market, 6-Allama Iqbal Road
Lahore
Contact: Hafiz Sultan Mehmood Khan, Chief Executive
Tel: 6375521; 6375522; 6375524
Fax: 6375525

Texmac Services (Pvt.) Ltd.
4th Floor, Shaheen Complex
M.R. Kayani Road
Karachi, Pakistan
Contact: Mr. Kamio, Country General Manager
Tel: 92-21-2630371-9
FAX: 92-21-2631580

Unitex Corp.
224-225 Sunny Plaza, 2nd Floor
Hasrat Mohani Road
GPO Box 107
Karachi-74200, Pakistan
Contact: Ahmed Khatri, Managing Director
Tel: 92-21-218313 & 213506
FAX: 92-21-2637448

Madhani Associates
Suite 2-A, Falcon Arcade, BC-3, Block 7
Kehkashan, Clifton
Karachi-75600, Pakistan
Contact: Aziz Madhani, Managing Director
Tel: 92-21-5864662 & 5864665
FAX: 92-21-5864490

The Mechanica (Pvt.) Ltd.
F/445, S.I.T.E.
Karachi-75700, Pakistan
Contact: Taher Punjwani, Chief Executive
Tel: 92-21-2564774 & 2564480
FAX: 92-21-2564714 & 4942731

Rajwani Trading Co.
One Amber Price
13-A Block 6, P.E.C.H.S.
Shahrah-e-Faisal
Karachi, Pakistan
Contact: Habib Rejwani, Chief Executive
Tel: 92-21-4520111 & 4520112
FAX: 92-21-4547857

Abbas Apparel Machinery Co.
Ground Floor, Anum Pride
A/22 Block 7 and 8
KCHSU
Shaheed-e-Millat Road
Karachi, Pakistan
Cntact: Mohsin Rashid, Managing Director
Tel: 92-21-4535112, 4535125
FAX: 92-21-4535108

END USERS

Fateh Textile Mills Ltd.
Hali Road
Hyderabad, Pakistan
Contact: Inayat Ullah Barkat Bhai, Chief Exeucutive
Tel: 92-221-880463-65 & 41071-4 FAX: 92-221-880342 & 880514

Sapphire Textile Mills Ltd.
149 Cotton Exchange Bulding
I.I. Chundrigar Road
Karachi, Pakistan
Contact: Mohammad Abdullah, Chairman
Tel: 92-21-232627 & 235469
FAX: 92-21-416705

Kohinoor Textile Mills Ltd.
42 Lawrence Road
Lahore, Pakistan
Contact: Mian Tariq Sayeed Saigol, Chairman
Tel: 92-42-6368835 6301684-5
FAX: 92-42-6368721
Gul Ahmed Textile Mills Ltd.
Sattar Chambers, 29 West Wharf Road
Karachi-74000, Pakistan
Contact: Bashir Ali Mohammad, Managing Director
Tel: 92-21-202704-8
FAX: 92-21-2415936

Burewala Textile Mills Ltd.
35-A Empress Road
Lahore, Pakistan
Contact: M. Hussain Dawood, Chief Executive
Tel: 92-42-6301601-7
FAX: 92-42-6361709

Ammar Textiles (Pvt.) Ltd
18 Kms., Multan Road
Lahore
Contact: Bilal Ahamd, Managing Director
Tel: 92-42-7510302-09
FAX: 92-42-7510308

Nishat Mills Ltd.
53-A Lawrence Road
Lahore, Pakistan
Contact: Mansha Yahya, Chairman
Tel: 92-42-6367812-8 & 6311526
FAX: 92-42-6279194

ASSOCIATIONS

All Pakistan Textile Mills Association
44-A Lazar, Off Moulvi Tamizuddin Khan Road
Karachi-74000, Pakistan
Contact: Tel: 92-21-5610191; 92-21-111-700-000
FAX: 92-21-5611305

Pakistan Cotton Fashion Apparel Manufacrers and Exporters Association
2nd Floor, Amber Court
Shaheed-e-Millat Road
Karachi, Pakistan
Contact: Sohail Aziz,Executive Director
Tel: 92-21-4533936 & 4543183
FAX: 92-21-4546711
Pakistan Readymade Garments Manufacturers and Exporters Association
First Floor, Suite 114
Latif Center, 99 Ferozepur Road
Lahore, Pakistan
Contact: Syed Azhar Mahmood, Secretary
Tel: 92-42-75962997
FAX: 92-42-7586101

Pakistan Hosiery Manufacturers Association
Amber Estate, First Floor, Room 103-104
Shahrah-e-Faisal
Karachi, Pakistan
Contact: Younus Ayub,Secretary
Tel: 92-21-4545683 & 4522685
FAX: 92-21-4543774

All Pakistan Cotton Power Looms Associaton
P-107/5 Montgomery Bazaar
Street No.5
Faisalabad, Pakistan
Contact: Rana Ikhlaq Ahmed, Chairman
Tel: 92-41-612929 & 639383
FAX: 92-41-613636

All Pakistan Textile Processing Mills Association
213 Main Soosan Road, Madina Town
Faisalabad, Pakistan Contact: Zafar Iqbal Khawaja, Director
Tel: 92-41-721013-4
FAX: 92-41-718982

Pakistan Woolen Mills Association
Republic Motors Building
87 Shahrah-e-Quaid-e-Azam (Second Floor)
Lahore, Pakistan
Contact: Muhammad Yaseen, Secretary
Tel: 92-42-6306879
FAX: 92-42-6306879

Pakistan Silk and Rayon Mills Association
48-49 5th Flor
Textile Plaza, M.A. Jinnah Road
Karachi, Pakistan
Contact: Akhtar Ali Awan, Secretary
Tel: 92-42-2415261 & 2410288
FAX: 92-42-2415261

TRADE PUBLICATIONS

Pakistan Textile Journal
D-16 KDA Scheme No.1
Karachi, Pakistan
Contact: Mazhar Yousaf, Editor
Tel: 92-21-4522189 & 4533911
FAX: 92-21-4533911

Textile Today
Fourth Floor, Dada Chambers
Hussaini Market, M.A. Jinnah Road
Karachi, Pakistan
Contact:
Tel: 92-21-2419751
FAX: 92-21-2419751 & 2427483

DISCLAIMER
Information in this report relies on sources including Government Publications, Opinions of industry experts and other public sources. Infomat can accept no responsibility for the accuracy or completeness of such information or for loss or damage caused by any use thereof. All prices subject to change without notice.

$3500 USD
For the 2008 Edition

Published: 2006 August
Market: Mens Womens Childrens
Region: Pakistan
Industry: Textiles
Pages: 45
Delivery: 7-12 Business Days
SKU: infre0000329