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Country can ill-afford a major political crisis

KARACHI: Trade Development Authority of Pakistan’s (TDAP) Chief Executive SM Muneer has said that Pakistan is going through a troublesome phase and cannot afford a major political crisis.

 

He also urged all the leading political parties to stop all kind of confrontations that may lead to political unrest at a time when the country is already facing grave security challenges.

“The present government is on the right track to revive the economy,” said Muneer at the Eid Milan reception held in honour of the leading businessmen of Karachi.

He said that he will meet the prime minister to discuss hurdles being faced by exporters to find ways and means to overcome them and boost exports.

Bashir Jan Mohammad was of the view that most of the recommendations of the business community were ignored in the federal budget. He argued that the Federation of Pakistan Chambers of Commerce and Industry’s (FPCCI) research could have provided true facts and figures to the people sitting at the helm of affairs and made them accept their demands.

“The voice of the business community falls on deaf ears, it needs to be heard at the high echelons of the government,” said Mohammad. “It is imperative that businessmen be united and take benefit of Muneer’s judgment.”

Meanwhile, senator Abdul Haseeb Khan said the potential of businesswomen could not be ignored and their help should be sought in resolving issues being faced by the business community.

FPCCI’s Acting President Shaukat Ahmed said that in order to control expenses, the present leadership of the body has refused to use the resources of the body in official visits.

He further said that his office will soon reveal the names of those who were involved in misappropriation of funds in construction of the FPCCI building in Islamabad, he added.

On another note, Khalid Tawwab pointed out that the country needs to overcome the load-shedding crisis in order to revive industrial activity.

Senator Khan, Sardar Yaseen Malik, Mian Zahid Hussain, Tawwab and Arif Habib also spoke at the occasion. Syed Farukh Mazhar, Gulzar Firoz, Dawood Usman Jakura, Manazer Nasir, Sultan Chawala, Abdus Sami Khan, Yayha Polani, Munir Sultan and Rashid Siddiqui were present at the reception.

Pakistan’s top taxpayers fight to save business

KARACHI: For Mohammad Naeem Mukhtar having three members of his immediate family including himself in the list of top five taxpayers in Pakistan offers neither consolation nor pride. His key business continues to suffer and all government officials conveniently look the other way.

Mukhtar, Chief Executive Officer of Ibrahim Fibres, the country’s largest maker of man-made fibres, has been fighting a losing battle against Chinese exporters who have flooded local markets with cheaper products under the cover of free trade.

“We are no longer a textile country,” he told The Express Tribune in a recent interview over telephone.

“It is near impossible to export polyester staple fibre and textile made-ups to India. China and Bangladesh have made it equally difficult to import textiles like woven garments. But we have opened ourselves completely for everyone.”

In the nine months to March 2014, Ibrahim Fibres saw its net profit slide 75% to Rs1.1 billion. Excluding the income from its associate company – Allied Bank Limited – the artificial fibre maker actually suffered a loss of Rs493 million.

More than once, Ibrahim Fibres along with other polyester staple fibre producers have taken their case to the National Tariff Commission (NTC) and won. But after a few months, the dumping of foreign products starts again.

However, the embattled government caught up in political agitation from the opposition and the war on terror seems to be giving little attention to industrial issues.

“The NTC cannot proceed on our requests for anti-dumping investigations because the officials, who have to take the decision, are missing. I don’t know when the appointments will be made,” he said.

According to the Federal Board of Revenue (FBR), Naeem Mukhtar, Waseem Mukhtar and Sheikh Mukhtar Ahmed together paid Rs465 million in taxes as salaried individuals, ranking them as second, third and fifth respectively among top taxpayers.

Naeem says it is high time for the policymakers to give serious attention to the industry. His position as a main sponsor in one of the largest Pakistani banks gives him an opportunity to see what’s going wrong.

“Look at the fertiliser sector. Many plants remain shut most of the time because there is no gas. In six to seven years, the gas reserves will deplete further. Imported LNG will cost around $20 per mmbtu. That’s basically Rs2,000 per mmbtu. Do you think our fertiliser makers would be able to compete?”

Unfortunately, the sore point in the debate about giving protection to domestic businesses has been the intra-industry contradictions.

The All Pakistan Textile Mills Association (Aptma), the powerful body that represents textile spinners, had long argued in favour of import of synthetic fibres.

On the other hand, when it came to its own interest, the association put pressure and succeeded in making the government slap 9% duty on import of cotton yarn after foreigners started to eat into their margins.

Naeem says Ibrahim Fibres was able to remain in business despite running on just 60% capacity because of the company’s good debt profile. “Our cash flow is not negative. We generate around Rs2 to Rs2.5 billion (a year) but that should have been Rs8 billion.”

The latest round of synthetic fibre dumping in Pakistan started from January 2013, which has now reached around 10,000 tons a month. That’s primarily because of slower demand in China.

“It’s a 12 to 24-month-long cycle and we expect demand to go back up in China. Things will improve for us too,” says Naeem.

Pakistan govt to revive closed textile mills: Minister

The Government of Pakistan is planning to revive the closed textile units, so as the increase the country’s annual exports by US$ 1 billion and create about 100,000 new jobs in the process, Commerce Minister Khuram Dastagir Khan has said.

 
During a meeting with representatives of the Faisalabad Chamber of Commerce and Industry (FCCI) in Islamabad, Mr. Khan said the Government would persuade the State Bank of Pakistan and other financial institutions to restructure debts of the sick textile units so that they can be made operational.
 
Mr. Khan asked the FCCI delegation to prepare a list of all the closed textile units and the number of employees who became unemployed due to their closure, as it would help the Ministry to frame appropriate policies to solve the problems of those textile mills and they be made re-operational.
 
The delegation told the Minister that the revival of the closed textile units would be able to generate employment opportunities for about 100,000 persons, with 25-30 percent of them being women. Such a step would also help Pakistani textile industry to increase their share in global markets.
 
On the occasion, the Minister also spoke about the necessity for Pakistan to add value to its textiles. He told the delegation that the country’s textiles currently earn only about US$ 4-5 per kg of cotton, and the Government intends to increase this value to over $15 per kg.
 
The exports of textiles and garments from Pakistan increased by 5.96 percent year-on-year to US$ 12.626 billion in the first eleven months of fiscal year 2013-14, according to the latest data released by the Pakistan Bureau of Statistics. Of this, garments accounted for only $3.82 billion.

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