Pakistan Textile Journal

“Pakistan is poised to meet the post quota challenges of 2005”
A. Razzak Dawood former Minister of Commerce & Industry

Mr. A. Razzaq Dawood, former Minister of Commerce, Industry and Production, is one of the most dynamic personalities in Pakistan’s business and economic scene. Son of the renowned industrial tycoon, Mr. Suleman Dawood, he has worked as Managing Director of Lawrencepur Woollen and Textile Mills as well as Dawood Hercules Chemicals Limited. At present he is Managing Director of Descon Engineering Limited and six other private companies, including Dawchem Pvt Ltd, manufacturers of chemicals for textiles and other industries. During last IGATEX, Mr. A Razzak Dawood gave an exclusive interview to Pakistan Textile Journal.

In your opinion is Pakistan prepared for the post-quota scenario in 2005?
"The main objective of the Textile Vision was to prepare the textile and garment sector of Pakistan to meet the post-2005 quota phase out challenges. The question we have to ask now is how far, have we come along on that journey and if we have achieved what we expected. I am happy to say that the present Government has carried the work we had started and have followed same policies and incentives in order to meet the challenges posed by 2005".
Razzak Dawood added, “Our push towards value addition is working as you have seen in the case of bed linen and home textiles, which is now a one billion dollar industry, next to hosiery and garments. These three value-added sectors now form a significant part of our exchequer” .
In which areas do you see a need for improvement and what are the key pressing issues faced by the industry?
“The failure on our part is that we are unable to sustain our momentum and the desirable impetus over certain issues, such as cotton contamination.
Today cotton and lint contamination is the major hurdle in textile chain and our exports price and value suffer due to this impediment. The Sales Tax Refund is second major issue which hampers the smooth working capital and liquidity of textile mills in Pakistan. Although, big investments have been made in the textile sector, issues like anti dumping duty on bed linen levied by the European Union will obviously have a negative effect on our profitability as well as on our ability to invest any further.
Do you see any silver lining in this context?
Certainly, the good news is that US market is quite big and their textile and apparel manufacturing plants are closing down which enables Pakistan to gain their market share. In this context, many plants are now shifting their production bases in other countries of Asia. Many plants may now shift to Pakistan from North Carolina, whereas the main advantage is plant and machinery at reasonable cost with additional market share in terms of textiles and garments.
What are some specific steps our industry should take to meet the challenges of the future?
"Pakistan should go and buy textile brands and we shall be able to capture the shelf space in mega stores in addition to high street fashion brands. The Pakistani executives can also acquire National and Regional brands. We have a new set of incentives for acquiring different brands and the State Bank has amended the rules for foreign exchange for buying and amortizing brands.
Have the policies you initiated as Commerce Minister continued by the present Government?
Although the present Government has followed the same policies, they should put more emphasis on cotton contamination and implement cotton classification, standardisation and grading. Secondly, the government should ensure that growers get a fair price for their cotton.
In case of meeting the parameters of contamination-free cotton, they should get a premium price in order to encourage and augment the supply of premium cotton. For example, Balochistan has a potential to grow one million bales of cotton and with proper grading & standardization, this sector will bring more prosperity to growers as well as other sectors. We loose around US $ 300 million per annum due to contaminated cotton and lint in our various products. If we manage to deal with these problems successfully there is no reason why we cannot be one of the global leaders in textiles.