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Energy crisis diverts $1bn export orders from Pakistan

Textile industry saw helplessly export orders worth $1 billion diverted to other destinations like Bangladesh and Sri Lanka as it lost more than one third of its production capacity during December and January due to power and energy crisis.

A number of Christmas orders for bed wear could not be executed due to unforeseen power disruption for 10 days in December, said Ali Asghar, former chairman of Pakistan Textile Exporters Association. He said the gas shortages were envisaged but never before was there a complete power shutdown for 10 days.

Chairman Pakistan Hosiery Manufacturers Association Adil Butt said that past two months have been devastating for the value added exporters. He said impact on exports because of worst ever power shortage would be visible in the export statistic for the month of February and March. “There is no dearth of export orders as Pakistan remains the cheapest source of knitwear but we accept orders after discounting for energy shortage,” he said.

He said Pakistani exporters do not want to default on confirmed order that is why they refuse orders that are beyond their available capacity. This time around unfortunately we were forced to default because of skewed government priorities that denied power to exporting industries. He said the industry got gas for five days in past 54 days. He said there was no electricity from December 21-31 and after that electricity is being provided for 12 to 16 hours a day.

Leading spinner and value added exporter M I Khurram said that 80 percent of the spinning capacities of the country are in Punjab. He said due to reduced capacities the availability of yarn is becoming suspicious even for industries in Sindh where there is no shortage of energy. He said in past five weeks the yarn rates have increased by 6 to 7 percent.

Chairman All Pakistan Textile Mills Association (Aptma) said the power sector is being managed by non-professionals that take decision on whims to ensure supplies to the domestic consumers. He said supplies to major industries with independent feeders and gas generators were completely suspended for 10 days. He said the secretary ministry of water and power assumed that these industries would be able to generate power from alternate fuel from their gas generators. Referring to the secretary, he said had she done her home work properly she would have known that gas was not available and only 20 mills could produce power from their gas generators using furnace oil as alternate fuel. He said another 30 have the facility to change to diesel as alternate fuel to gas. He said rest of 170 mills has no alternate arrangement if the gas supply is suspended.

“Export losses cannot be recouped but further losses could be averted if the industry is ensured 24 hours electricity and 5 days a week gas from February 1, as promised by the president of Pakistan,” said Gohar Ejaz group leader Aptma. He said he is leading a high level Aptma delegation to Islamabad on January 28 to ensure that the promised power and gas are restored.

He said the delegation would meet the minister for water and power Ahmad Mukhtar and advisor to the prime minister on petroleum Dr Asim Hussain and make sure that the promise made by the president is honored. He said the Aptma delegates would remain stationed in Islamabad till the power and energy supplies are fully restored.

Gohar said Pakistan would not need IMF assistance if full power and energy is assured to the textile industry. He said fortunately Pakistan enjoys competitive advantage over its competing economies. He said everything produced by this industry can be easily exported. He said with full power and gas supplies and full capacity utilisation the textile exports could touch $18 billion.

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