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Sunday, October 18, 2009, Shawwal 28, 1730

Textile profits down 57pc due to power shortage

Multan—Khawaja Jalaluddin Roomi, former Punjab Minister for Industry and Ex-President of the MCCI has said textile sector’s profits plunged by 57 percent as it went through a tough time during the last year with exports declining by eight percent owing to international financial crisis and domestic energy shortages. Talking to newsmen here the other day, he said the losses based on listed textile firms’ financial results depicted a bleak picture of this key sector, which had been passing through a difficult time for quite some time. Though, there were textile companies that were out of the loop of stock market, the financial results of listed firms broadly represented the sector as the composite sector represented 88 percent spinning, and 60 percent weaving sectors.

Roomi said the government announced the Textile Policy in August this year and gave a bailout package of billions of rupees to various sectors to boost their exports. However the critical issues related to power and high financing cost remained unattended.

According to analysts production suffered due to domestic issues badly impacted the export performance of the textile industry. Pakistan’s textile exports were hit hard by intense competition from the regional countries in last fiscal and this, alongside rising interest rates and prolonged power cuts proved to be a hindrance to earnings of the textile industry.

The global financial crisis, which hit the developed countries last year has wreaked havoc with their economies. As a result the purchasing power of the consumers took a hit and demand for textiles and apparels plummeted.—Agencies
 

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