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 Pakistans 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
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
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
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.