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LAHORE, Feb 14 (APP):All Pakistan Textile Mills Association (APTMA-North) Chairman Kamran Arshad has opposed the proposed increase in gas price for Export-Oriented Units (EOUs), terming it disastrous for textile industry.
Addressing a press conference along with APTMA Senior Vice Chairman (SVC) Asad Shafi, former chairmen Adil Bashir and Rahim Nasir, and Secretary General Raza Baqir here at APTMA House on Wednesday, he said that the gas tariff was Rs1,100 per MMBTU in January last year which was increased to Rs 2,400 per MMBTU in November 2023 and is now expected to be raised up to Rs. 2,950 per MMBTU from the current month, while the country’s export industry was already losing its share in global market due to frequent rise in energy tariff. Export capacity of US $ 600 million per month in the country remains unutilized, particularly due to the high energy cost, he claimed.
According to him, only a rapid increase in exports could be a remedy to meet US $ 2 billion per annum of gross external financing requirements otherwise the balance of payment would worsen ahead and job losses and unemployment would increase manifold. “With these energy prices, APTMA estimates 60 to 70 percent of industry will shut down within a few months, as uncompetitive energy tariffs hinder export growth as well as foreign and domestic investment in the export sector,” he added.
In the textile sector, he said, the component of energy costs account for roughly 18 percent of final product value, citing that textile industry operates on very slim margin of 3 to 4 percent, and the present increase in gas tariff for the industry would render it uncompetitive and unserviceable not only globally but also in the local market, thus leading to a large scale closure of mills and joblessness of labourers.
Kamran Arshad mentioned that the industry has made huge investments over the last one decade in machinery for capacity enhancement and this has resulted in an increase in exports so far. The industry is also planning to set up 100 new plants to create at least 500,000 new jobs.
The SVC Asad Shafi said that an increase in gas price would lead to jeopardize the sustainability of textile business in Punjab, adding that reliance on electricity at over Rs 40 per unit would make the textile industry uncompetitive in the international and local markets and this would result in shifting of the available export orders to other countries.