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Businesses look for alternative energy sources

Realising that power and gas supply continues to remain uncertain at least in the medium term, apparel sector is tapping into alternative sources of energy, revealed an interaction with various knitwear and garment exporters.

They are trying to generate energy from different fuels which suit them most both in terms of recurring cost and upfront investment. Some are burning coal directly to generate steam from their existing boilers; others have replaced low pressure with higher pressure boilers. Some entrepreneurs are using wood and a few agricultural wastes.

“We are facing acute shortage of electricity and natural gas,” said Adil Butt, chairman of Pakistan Hosiery Manufacturers Association. He said textile value added sector is aware of some very lucrative opportunities coming Pakistan’s way in coming years. He said GSP Plus (generalised system of preferences) status that is likely to be granted by European Union in 2014 would be a huge opening. “The sector would have to be fully prepared to accept that chance,” he said adding that technically the sector is ready but its productivity is badly hampered by power and energy shortages.

“We cannot let this opportunity go and are planning self-generation even if cost is higher than power and gas supplied by public sector,” he said adding that his company is producing gas from coal gasification plant that has recently been installed. This has enabled us to run our processing plants that run on gas only, he further added.

Former chairman Pakistan Readymade Garments Manufacturers and Exporters Association said his company generates power from diesel generators that produce expensive electricity but foreign buyers do compensate nominal increase in production cost. He said the garmenting sector consumes far less electricity than basic textile sector.

He said the global demand for Pakistani garments is on the rise. “The industry would have to overcome all deficiencies before 2014 to benefit from expected unlimited access to European Union. He said for socially compliant garment producers inflation is a larger worry than power shortages. “We have to keep the wages in line with the inflation and our workers get almost double the minimum wage set by the government.

A leading knitwear exporter M I Khurram said that he has replaced his low pressure boiler with a high pressure container at an additional cost of Rs100 million. “Now instead of gas I am using coal to generate steam that operates my turbines,” he said adding that coal gasification plant is very expensive and its efficiency is very low.

“There is no dearth of orders,” he said adding that prudent entrepreneurs accepted orders keeping in view the ongoing power and energy crisis. He said any default by Pakistani exporters on export shipments because of energy shortages bring bad name for the country and huge losses to the exporters. He said it would be unwise to go after orders until the enterprises develop alternate energy production capacities.

Former chairman PHMA Shahzad Azam Khan said that it is unfortunate that there is no public institution to guide entrepreneurs in acquiring most suitable alternate energy technology.

“The companies tried different technologies from liquefied petroleum gas (LPG) to wood or rice husk to produce power and energy before settling for one that suits them most,” he added. He said survival of value added sector is extremely crucial for industry and country; as there is likelihood of opening of US and EU markets for Pakistani textiles in coming years.

Khan advised apparel exporters not to depend on single buyer. “It looks convenient to work with one company but it is risky in the long run,” he said adding that all small and even large apparel sector companies that closed in past four years were supplying to a single brand only. When they withheld their orders these companies crumbled, he added. He said all companies doing business with four or more brands have survived in most adverse circumstances.

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