Textile industry in Pakistan to reach USD 17.066 B by 2025

The Textile Industry in Pakistan is valued at USD 8.6 billion in 2019 and is estimated to reach USD 9.68 billion by the year 2020.

It is expected to grow at the CAGR of 12.8% within the time horizon of 2020-2025 because of huge spinning capacity of Pakistan, government Incentives for textile industry and availability of raw cotton .

Its market value will reach USD17.06 billion by end of the year 2025.

Definition / Scope
Market Overview
Market Risks
Top Market Opportunities
Market Trends
Industry Challenges
Technology Trends
Pricing Trends
Regulatory Trends
Market Size and Forecast
Market Outlook
Technology Roadmap
Distribution Chain Analysis
Competitive Factors
Key Market Players
Strategic Conclusion
References
Appendix

Definition / Scope

Textiles are the flexible materials, which are formed from weaving, knitting, tatting and braiding of fibers, filaments, threads and yarn.

The major sources of these textile materials are animal (wool, silk), plant (cotton, jute, bamboo), mineral (asbestos, glass fiber) and synthetic (nylon, rayon, acrylic).

The textile industry is concerned with the production, design, manufacture, and distribution of clothing, seatbelts, blankets, carpets, and roofing shingles.

In the context of the Pakistan, the popular textile products produced from wood are woollen, acrylic, fabrics, shawls, blankets and carpets. The major types of the filament yarn are acetate rayon, polyester filament, and nylon filament yarn.

Victory tees is one of the popular high quality, branded T-shirt priced at lower price with multiple variety of colors and designs based on the demand of the customer, which is particularly designed for the population of age group 15-32 years old.

This product contributes to the market share of 1-2% of the textile industry in Pakistan. The textile industry in Pakistan holds the 8^th position in terms of the textile materials exports in Asia and is the 4^th largest producer of cotton worldwide.

The major exports markets for textile materials are USA (17%), China (8%), United Kingdom (8%), Afghanistan (6%), Germany (6%), etc. There are 1,221 ginning units, 442 spinning units, 124 large spinning units and 425 small units in Pakistan.

The major exports markets for textile materials are USA (17%), China (8%), United Kingdom (8%), Afghanistan (6%), Germany (6%), etc.

On the basis of the materials type

The textile industry in Pakistan is categorized into following segments:

Cotton materials
Woollen materials
Synthetic materials

Market Overview

The textile industry is the largest manufacturing industry in the context of Pakistan as it contributes to 21% of total large scale industries in Pakistan. It contributes to almost 57% of the total exports of Pakistan and about 8.5% of the total GDP of the country. It accounts for the market share of 2.2% of the global textile industry.

The total market size of the textile industry in Pakistan is valued at USD 8.64 billion in 2019 and is expected to reach USD 9.68 billion by the end of the year 2020.

Its market value is estimated to grow at the CAGR of 12.8% within the forecasted time horizon of 2020-2025. The market value of the textile industry in Pakistan is expected to reach USD 17.06 billion by the year 2025.

On the basis of the materials type, the cotton materials segment is leading the textile market in Pakistan. This segment accounts for the market share of almost 96% of the total export of the textile industry of Pakistan.

The market size of this segment is valued at USD 8.3 billion in 2019. Huge spinning capacity in Pakistan, government Incentives for textile industry and availability of raw cotton are the major factors driving the growth and development of the textile industry in Pakistan.

However, large-scale energy crisis and rising cotton prices might restrain the growth of this market. The key market players engaged in this textile industry are Nishaat Mills Limited, Yunus textile mills limited, Gul Ahmed textiles mills limited, Kohinoor mills Limited, AI Abid silk Mills Limited, etc.

Market Risks

Large scale energy crisis and daily power cut off

In the context of Pakistan, the demand for the power is about 14,680 MW. However, the supply of power is just 10,200 MW experiencing the power supply shortage of 4480 MW.

Because of this, the small villages are the facing the issue of power cut off and interruption in power supply for almost 21 hours per day and larger cities are facing the power cut off for at least half of the day.

This level of energy crisis is creating the risk for the growth and development of the textile industries as it requires the continuous power supply for the optimal functioning and operation of this textile industry in Pakistan.

Top Market Opportunities

Availability of cheap labor

Globally, Pakistan has one of the largest labour and holds the ninth position in terms of the largest available work force. There is about 57.2 million workforce in the country.

Among these, 20.3% of the total human workforce of Pakistan is involved in the industrial sector such as textile industry. On average the wages of the worker is about USD 159.3 per month.

Pakistan is ranked at the 71st position with the lowest minimum salary in terms of the ranking of the countries with the minimum wages.

Because of the organization from the international countries prefer to invest and establish their company in Pakistan. It will provide the significant opportunity for the development of the textile industry in Pakistan.

Raw cotton production and availability

Cotton is the basic cash and industrial crop of Pakistan as it is cultivated in the 15% of total cultivable land of Pakistan. It is the fourth largest cotton producer and third largest exporter of raw cotton and third largest consumer of the cotton.

In 2019, almost 1.35 million bales of the cotton are produced in Pakistan. Its production is expected to reach 8 million 480 Ib bales by the end of the year 2020.

The total production of the raw cotton is increasing at the CAGR of 1.4% annually since 2018. This rising production of the raw cotton is creating the favorable environment for the development of the textile industry in Pakistan.

Market Trends

Huge spinning capacity

In the context of Asian countries, Pakistan holds the third in terms of the ranking of largest spinning capacity of the country. It accounts for spinning capacity of almost 5% of the total global spinning capacity.

There are almost 1,221 ginning units, 442 spinning units, 124 large spinning units and 425 small units in Pakistan. Along with this, there are major six producers of the synthetic fibers with the capacity of the production of the fibers such as nylon, polyester of about 636,000 tons per year.

There are almost 90,000 looms, which are used for the production of the fabric by waving yarn and thread. This huge capacity of the textile industries in terms of spinning are driving the growth and development of the textile market in the context of Pakistan.

Government support incentives for the textile industry

In the context of Pakistan, the chamber of commerce has reduced the import duty on the textile machinery and parts to 5%, on the ginning presses to 5%, reduced the turn over tax on retailers to 1% and reduction of sales tax to 2% from 15%.

Along with this, it has established textile city at Karachi and Garment cities at Karachi, Lahore and Faisalabad. These incentives program provided by the governmental authorities are driving the growth and development of the textile industry in the context of Pakistan.

Rising cotton prices

The price of the cotton as the most exported textile materials is in increasing trend. The price of cotton has been increased from USD 0.97 per kg in 2015 to USD 1.64 per kg in 2019.

Within the time horizon of five years, its price has been increased by almost 69.26%. It might be due to the disturbances caused by the extreme weather conditions such as heavy rain.

This increasing price for the raw cotton will influence the export and demand for the cotton products, which will ultimately restrain the growth and development of the textile industry in Pakistan.

Insufficient efficiency of spindles and looms

Within the time horizon of five years, the number of the spindles installed is in increasing trend as it has been increased from 10,998,890 to 12,338,000 spindles in Pakistan.

However, the efficiency of the installed spindles is about 85%. Along with this, the efficiency of the installed looms is just 70%. This level of inefficiency will influence the production of textile products, which will ultimately risk for the growth and development of the textile industry in Pakistan.

Industry Challenges

Dominance of low and middle income class consumers

About 80% of the consumers of the textile industry are the lower and lower-middle class people with the per capita income of USD 1051. Because of this, they are less attracted towards the established brands because of the high prices of the top branded clothes.

As a result, it is quite challenging for the market players to introduce the innovative fashionable products at the affordable prices.

Technology Trends

Advancement in the technological approaches are favoring the innovative efficient use of the technology for the production of the textile products. Some of the key technological changes in this textile industry are discussed as follows:

Laser Printing: This technology is used to design the images on the clothes. It is considered to be one of the useful and efficient technology for designing the textile materials as it transfer the designed patterns and materials more quickly and precisely.

Nano technology: This technology is used in the textile industry for the production of the scientific clothing. The textile prepared by adopting this technique is fire-repellent, self-cleaning, water-repellent, etc. at the lower energy thresholds.

Wood fiber yarn technology: It allows to produce the yarn from the wood by avoiding the complex chemical processes. It consumes almost 99% less water and 80% less energy than cotton. So, it is considered to be environmental friendly technology causing less impact on the environment.

Tech infused wearables: These type of the clothes are infused with the heating technology in order to maintain the garment aesthetic value.

Unspun: It is the machinery device which manufacturers the jeans on demand after calculating the measurement of the wearer in 3D.

Pricing Trends

The price of the textile products in the context of Pakistan depends upon the type of materials, design, manufacturing technology, quantity and quality of product, availability of the raw materials and brand name.

For instance, the price of the wholesaler chenille yarn ranges from USD 0.3 to USD 0.7 per piece while the price of the acrylic wool blended yarn ranges from USD 0.34 to USD 0.36 per piece.

The price of the polyester yarn ranges from USD 1.42 to USD 1.8 per kilogram. The price of the denim fabric ranges from USD 1.3 to USD 2 per meter while the price of the polyester fabric ranges from USD 3 to USD 5 per kilogram.

The price of the cotton woven fabric is about USD 65 per meter. The average cost of the graphic design shirt ranges from USD 0.65 to USD 3.25 per unit while the price of the artwork category ranges from USD 0.98 to USD 4.56 per unit.

Regulatory Trends

The government of Pakistan has the textile industry division, which is responsible for the sustainability of the growth of textile sector.

The Pakistan Textile Mills Association is the national trade association of the textile spinning, weaving, and composite mills. Some of the regulations related to the textile industry in the context of Pakistan are discussed as follows:

Textile policy 2020-2025: This policy is drafted to increase the output of the textile product and improve the global competitiveness in the textile industry.

It has sets out the target to increase the exports of the textile products by 40% and assist in the creation of the 3,5 million new jobs for the population in Pakistan.

It aims to reach the export value of the textile products to USD 25.3 billion by the year 2025 and USD 50 billion by the end of the year 2030.

Cotton Cess Act: This act has been developed for the creation of the fund required for the development and enhancement of the cultivation, production, and marketing of cotton. For the implementation of this act, the federal government has developed the committee.

Market Size and Forecast

In Pakistan, the textile industry is the largest manufacturing industry contributing to 21% of total large-scale industries and almost 57% of the total exports of the country.

It accounts for the market share of 2.2% of the global textile industry and holds about 8.5% of the total GDP of the country.

The total market size of the textile industry in Pakistan is valued at USD 8.64 billion in 2019 and is expected to reach USD 9.68 billion by the end of the year 2020.

On the basis of the materials type

The cotton materials segment is dominating the textile market in Pakistan. This segment accounts for the market share of almost 96% of the total export of the textile industry of Pakistan. The market size of this segment is valued at USD 8.3 billion in 2019.
The wool segment accounts for the market share of 3% of total textile industry in Pakistan. The market size of this segment is valued at USD 0.25 billion in 2019.
The synthetic fibres segment accounts for the market share of about 1% of total textile industry in Pakistan. The market size of this segment is valued at USD 0.086 billion in 2019.

Market Outlook

The textile industry in Pakistan market is expected to grow at the CAGR of 12.8% within the forecasted time period of 2020-2025 because of huge spinning capacity of Pakistan, government Incentives for textile industry and availability of raw cotton in the country.

The market value of the textile industry in Pakistan is expected to reach USD 17.066 billion by the end of the year 2025.

Technology Roadmap

Adoption of the advanced manufacturing and processing technology are creating the favorable environment for the improvement of the quality of the product at the low energy consumption.

For instance, the use of nanotechnology and laser printing in the textile industry are highly efficient and precise in comparison to the conventional methods of printing.

However, some of the textile industries in Pakistan are still reliant on the conventional methods. So, the market players should be focused on the optimal use of the emerging technological approaches in order to bring the expected growth and development of the textile industry in Pakistan.

Distribution Chain Analysis

The key steps involved in the production of the textile are spinning, weaving, processing, printing, garment manufacturing and filament yarn manufacturing. At first the farmer cultivates the cotton on the fields, which are supplied to textile industries for processing.

Once the raw cotton is processed out, they are printed with the color and designs and weaved out to manufacture fibers and yarns. The manufactured textile products are available in the on trade and off trade market in the forms of the clothes, carpets, etc.

Competitive Factors

The key market players engaged in this textile industry are competing for the creation of the novel designs in the textile products, and price of the apparels.

They are focused on the development of the highly fashionable up dated textile products to attract the teenagers towards the fashion and textile industry.

Key Market Players

The short profile of the key market players in the textile Industry of Pakistan are discussed as follows:

Crescent textile mills limited: It is the largest textile company of Pakistan as the hub for the textile manufacturers. It manufacturers yarn, processed fabrics, home textiles and institutional garments.

Gul Ahmed Textile mills limited: It is one of the leading textile industry in Pakistan with the capacity of more than 51,840 spindles, 300 weaving machines. And most modern yarn dyeing units.

Husein industries limited: It is one of the leading manufacturer and exporter of the textile globally since 1951. It exports the quality textile products such as yarns, apparel, etc.

Kohinoor textile mills limited: This company is concerned with the manufacturing of the textile, dyeing, finishing and weaving of the textile products with its headquarter in Lahore, Pakistan.

Nishat Mills Limited: It is one of the largest textile company with almost 227,640 spindles and 805 air jet looms. The total export of the textile products produced by this company is about USD 344.744 million.

Strategic Conclusion

The textile industry in Pakistan is growing at the rate of 12.8% because of the country’s huge spinning capacity, availability of raw cotton and governmental incentives program for the promotion of the textile industry.

However, continuous power cut off and rising prices of the cotton might restrain the growth of its market.

References

Appendix

GDP= Gross Domestic Product
USD= United States Dollar
CAGR= Compound Annual Growth Rate