The country's export-oriented apparel industry misses over one-billion dollar deals as it does not participate in the internationally floated tenders due to inconsistent government policies regarding revision of utilities' tariffs, industry sources told Business Recorder here on Wednesday.
They said that the apparel sector of the country is deprived of greater chunk export deals, as the system of the international tendering has been upgraded, according to which only one can participate who could ensure that the product supply at the same rate has been quoted in the tender document.
"We annually lose around $1.25 billion worth apparel orders, as we can not give assurance regarding the same price quoted in the tender document, because we don't know whether the tariffs and cost of different utilities will remain the same or go up even in the next three months," said Ijaz Khokhar, Central Chairman, Pakistan Readymade Garment Manufacturers and Exporters Association (Prgmea).
Exporters are always bound to export the consignment at any cost to meet the dateline irrespective of country's law and order situation, increasing cost of products, etc, he said.
The value-added garment sector receives only 3 percent to 5 percent of the total bids every year, while the rest is grabbed by the Indian, Bangladeshi and Chinese exporters in the world market, he added. He pointed out that during last two years Pakistan had missed about $4 billion in such tendering process due to high cost of production, leaving the industry almost prostate in the world market.
"The online tendering system internationally is new in the country according to which the lowest bidder qualifies while the higher and the highest ones respectively are disqualified automatically from the process, of which Pakistani exporters are amongst the prominent ones," Ijaz elaborated. This system was earlier utilised in the home textile sector worldly, however it is now overwhelmingly spreading in the world, he said. Adding that, "Local exporters mostly fail to attract the foreign buyers because of technical errors they commit during the online tendering process due to lack of know-how of this new system," he added.
Urging the government, Chairman Prgmea said that it should come forward to acquaint the local exporters with latest methodologies and techniques to apply in the international contest to grip maximum of the export contracts.
A minor mistake could lead to knock out of the entire process, he added.
"Trade Development Authority of Pakistan (TDAP) can play a vital role in making the exporters of all sectors enable to participate in the online tendering process free of errors," he said.
Ijaz said that advisory boards of the European, Far Eastern and US suggest to their citizens particularly to business communities not to travel Pakistan for various reasons including law and order situation making the local exporters constraint to travel various other region and countries to finalise export deals.
"Value-added garment exporters are continuously travelling to world's neutral venues acceptable for foreign buyers just to strike export deals, causing them million of rupees losses annually," Ijaz said.
High electricity and gas tariffs with uncertain prospects are the major hurdles for this sector in augmenting its exports besides manufacturing products on world class standards, he said and added that government should cap the utility tariffs at exiting levels at least for next three years. He said that the apparel sector with 60 percent employment share is on the verge of complete paralysis and if government did not heed on our genuine demands, it could almost come to a standstill.
Expressing disappointment over the government's policy making process, he pointed out that it had never consulted with the Small Medium Enterprises (SMEs) sector in evolution of policy, which had badly hit the ready-made manufacturing sector in the country.
Government has completely overlooked the value added garment sector in the federal budget 2007-08, as 60 percent of this sector is based on SME badly need its support to grow, he added.
Chairman Prgmea appealed to the government to formulate a long-term policy for the apparel sector so that it could at least sustain in the face high competitiveness in the world market. Government should also support the country's apparel industry to scale down the increasing export deficit by 30 percent, he added.