energy crisis & the textile sector

8/8/2019 Energy Crisis & the Textile Sector

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WAQAR SAJID

SAHRISH KAUSAR

BUSHRA KHALID

ZARA ZUBAIR

ROMANA MEHMOOD



Importance of energy

Current scenario of Pakistan¶s energy crises



Exhaustion of water in dams

Fluctuations of oil prices

Silting processAging of equipments

Inability of WAPDA and KESC

Monopoly in the business

Faulty distribution system



Pakistan textile industry and clothing sector is

a major contributor to the foreign exchange

earner It contributes about 55% to the total export

Cotton is the cash crop of Pakistan. The quality

of cotton and it's related products of Pakistan

are unmatched in the international market



8th textile Asia International Textile &

Garments Machinery show, the

officials quoted that the exportsof textile and textile products of

Pakistan have increased in recent

years.

The government has offered various incentives

for the industry to upgrade and modernize.



The Textile Industry is dominated by Punjab.

1.5 million people from N.W.F.P are employed in the

industry

3% of United States imports regarding clothing andother form of Textiles is covered by Pakistan.

In 1999, textile exports were $5.2 billion which

increased to $10.5 billion by 2007

The share of textile exports in the total exports of Pakistan has declined from 67% in 1997 to 55% in

2008, as exports of non textile sector grew



The Economist reports that Pakistan is the: 4th largest producer of cotton in the world

6th largest importer of raw cotton

3rd largest consumer of cotton

1st largest exporter of cotton yarn

over 1.3 million farmers, out of total of 5 million are

involved in cultivation of this crop



Pakistan textile industry contributes more than 60% to

the country's total exports which is around $9.6 billion

The industry of textile contributes approximately 46%

to the total output produced in the country In Asia, Pakistan is the 8th largest exporter of textile

products. It's contribution to total GDP is 8.5%

It provides employment to 38% of the workforce in

the country



According to the economist intelligence report

of August 2003 for Pakistan the following

observations have been made: Despite government effort to diversify exports and

widen the industrial base, the industrial sector remains

dominated by the textile industry. Textile sector still

represents 46% of total manufacturing and provides

68% of Pakistan export receipts.



This strong performance stemmed from two

factors: Increase in import quotas especially by U.S.A, EU &

Turkey.

Textile industry has invested over $1.5 billion in new

technologies and modernization in the last three years

Efficiency and innovation in textile is the only hope toget the country out of economic problem.



The two major types of energies used in

textile sector are:

Thermal energy (required per meter of cloth is 4,500-

5,500 Kcal)

Electrical energy (required per meter of cloth is 0.45-0.55 kwh)



Water

Electricity

Natural Gas

Steam



ResourceConsumption

(per Kg of Fabric Processed)

Optimum

Consumption

Saving Potential

%

Water 100-400 liter 70-100 30-75

Electricity 0.5-2.0 kWh 0.5-1.0 Up to 50%

Natural Gas 0.5-2.0 m3 0.5-1.0 Up to 50%

Steam 5-15 kg 5-8 Up to 47%



Water Usa e I Textile Mills

r se erce t water se

C tt textile Sy thetic textile

Stea generati n 5.3 8.2

C ling water 6.4 --

ater f r s ecific

ur se

7.8 30.6

Pr cess water 72.3 28.3

Sanitary use 7.6 4.9

Miscellane us and fire

fighting

0.6 28.0



The level of energy consumption by the

textile industry was around 1500MW inAugust, 2008.



INFLOW OF FOREIGN DIRECT INVESTMENT

0

10

20

30

40

50

60

70

2 004 -200 5 2 0 0 5-2 0 0 6 200 6-20 07 2 00 7-2 00 8

Column3

Column2

Column1



Loss of production and export orders

Reduced up to 30%

60 to 70 % Industrial effect Contribution decreased to 11 Billion US Dollars

Increased cost of production

Instant increase in electricity tariff Increased use of diesel generators

Increased Gas tariff

Daily loss of 1 Billion US dollars



Impact on the employment level of Pakistan

Job insecurity

Increased unemployment

Reduction in wages

Massive financial losses Direct impact on workers with daily wages



Layoffs Laid off shifts to reduce cost

Shift contributes 500-700 workers

Higher criminal rate in society

Reduction in Research & Development

R&D program abolished since July 2008 Low quality production

Unable to sustain Cotton Vision 2015



Value added production exports

0

200

400

60 0

800

1000

1200

1400

1600

2006-2007 2007-2008 2008-2009

Ready Made Garments Growth Rate (-18.22)

Synthetic Fibrics Growth Rate (-39.67)

Cotton yarn(-5.72)



Raw Cotton Exports

0

50

100

150

200

Value (M.$)

Qty. (M. Kg)



Textile Units to shift abroad

Owners are shifting their businesses to countries like

Bangladesh

15% of total industry are in a process of shifting

Subsidies provided in Bangladesh for industries

energy crisis & the textile sector

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