Pak entrepreneurs hint at investing $3.0b in textile, clothing industry

Pakistani entrepreneurs pledged Saturday to exploit preferential trading benefits that Bangladesh is enjoying in developed markets by investing billions of dollars in the country's vibrant textile and clothing industry.

A group of 10 top leaders of Pakistani textile and bed wear exporters are now visiting Bangladesh and is expected to form a business council and develop action plan to go for joint venture projects and direct foreign investment.

Pakistan grows quality cotton and Bangladesh has abundant labour force available at 'most competitive wages' and that both the countries could play complimentary roles in maximising their textile and clothing business.

The visiting entrepreneurs said that the Asian countries, China, Bangladesh and Pakistan together form the largest consumer market on the earth and the nations must raise intra-regional trade to sustain in the stiff global

competition, after quota on textile and clothing had disappeared early this year.
They said it was miserable that the SAARC countries' trade is only 5.0 per cent among themselves as against 65 per cent done by EU members.

"We are serious about making investment in Bangladesh. A three billion dollar seems to me as a moderate investment. We are ready to invest substantially here," said Shabir Ahmed, Chairman of Pakistan Bed-wear Exporters Association, in an interview with the Financial Express, Saturday.

Ahmed said Bangladesh's export to Pakistan stands at only US $ 60 million while Pakistan exports some US $ 225 million worth of products, mainly fabrics and yarn and cotton to Bangladesh.

Pakistan's bed-wear industry fetches US $ 1.30 billion in export revenue and had developed reputation in Europe and American markets. But its growth has been marred because of various anti-dumping measures and relatively high duty structures in the developed markets. For example, the bed wear industry, if set up in Bangladesh, could save 24 per cent expenses (in dollar terms) than that of Pakistani ones, estimated MA Matin, former BTMA president.

The Pakistani delegates enquired about port, bank interest, power and gas expenses and labour costs and labour laws and are scheduled to meet commerce and industry ministers, Board of Investment executive chairman, and foreign minister, during their four-day trip.

They will also take part in a dialogue on "Opportunity of Investment in Bangladesh's Textile Sector," to be held at Hotel Sonargaon today (Sunday).

"We have developed pretty nice marketing strategy in Europe and America. It will be a win-win situation for Bangladesh and Pakistan if we get united…" Shabir said.
Former BTMA chairman said Bangladesh enjoys tremendous potentialities in textile and clothing sector. He said from nowhere, this country has established some 4.5 million spindles in just a few years and the growth rate is very high.

He argued that Bangladesh's textile sector enjoys comparative advantage because of expanding market and consistent rate of growth. "Although we do not have cotton, but we have set up 4.5 million spindles and around 200,000 to 300,000 spindles would come under operation soon, " Matin said.

He said Bangladesh exported bed linen to EU market worth about 98 million Euros last year, showing a fabulous 100 per cent growth.

The Pakistani delegates asked if Bangladesh and Pakistan could jointly urge the EU to design a common Rules of Origin (ROO) and Generalised System of Preference (GSP) strategy, but Bangladesh said it wants to enjoy the Least Developed Country (LDC) status and still wants Pakistan to invest in Bangladesh to tap the duty-free, quota free benefits.

BTMA vice chairman Jahangir Alamin welcomed the Pakistani delegation and organised tête-à-tête between Bangladeshi and Pakistani entrepreneurs in the evening.

"We can tell you our power is the cheapest in the world…if you use gas-burn generators," declared Alamin who argued there were many others factors of production, which are much cheaper in Bangladesh.

"You (Pakistan) are facing some odds in the EU market, and, that is why, Bangladesh is the best place for you to invest," Alamin, the vice chairman, said.
A leading textile manufacturer in Bangladesh, Abdullah Al Mahmud, said, woven sub-sector is almost untouched in Bangladesh and that Pakistan could tap the potentialities here. He said Bangladesh produces fraction of total woven fabrics demand.

Bangladesh fetches more than US $ 6 billion in apparel exports and that the country has been experiencing a moderate of 23 per cent growth.

A leading Pakistani textile manufacturer, Bashir Ali Mohammad, said, Bangladesh should reach transport agreement with India so that a truckload of fabrics or yarn could come to Bangladesh only in four days from Karachi or Lahore.

As China and the USA developed strains on clothing business, the American buyers now got crazy to look for alternative countries for their apparel-sourcing, said Alamin, the BTMA vice chairman.

You would think Pakistani entrepreneurs would invest $3.0Bn in Pakistan but that would only benefit Pakistan is too much of a good idea so lets invest in a poorer sh1t country like BD and get our work done cheaper.

Pakistan needs to subsidize Pakistani companies so they stay in Pakistan.

Yesterday EU gave pakistan a special status currently enjoyed by Tusanami hit countries but cutting down 20% in duties on its product so it will also help boast the export growth which should be able to touch $ 23 billion in 2006-2007.

Their investment in textile in pakistan wont do much if they cant export it. Bangladash is a right place because BD doent not have anti dumping duties like Pak. think outside the box.

I do not think, pakistan attracts anti dumping duties.

They wan't to invest in B-desh becase the labour is cheaper over there.

Any smart businessman will want to profit, welcome to the wonderful world of capitalism. If the government tells them not to invest in Bangladesh, then we will become more of a control economy, and then you'll call Pakistan a dictatorship.

Make up your mind...do you want to be democratic and free market, or do you want to be controlled and regulated? This is a world where you cannot have it in the middle, because that is where corruption is at its height...it can only work in the middle if the people want to work for it.

Pakistan is not exactly at the position of US where it has hundreds pf multinational firms outsourcing work to save costs. Pakistan is no where near the stage that its companies can decide we are going to move our plants to BD cause they are cheaper, Why not move them to Afghanistan it will be even cheaper?

This is total BS, Free-market economy stops being fun when your own investors are running to other countries let alone the forgien people themselves.

Not to mention why doesnt BD take back millions of its illegals living in Karachi with that $3bn? Perhaps it can create some jobs for them as it seems there is a shortage of employment in that particular community of Karachi

Dont get me wrong I have no problems with free-market, infact I think its the best option, What I'm saying is it really necessary for these people to run to BD? If its because its cheaper then they should go to Afghanistan where it will be even cheaper!

Whats all the fuss about?

Pakistani businesses should be encouraged to invest abroad. I am sure that would fetch more money for Pakistanis in the long term.

Guys its ok to Invest money outside the Pkaistan. Any way the profits will come to Pakistan. Bangladesh is our Muslim Brother Country and if we can invest some money there it will be ok as Political Point as well .

The question we must ask us, why are our pakisani industrialists wanting to invest in B-desh in stead of Pakistan???

The governemt should sit down with the industrialists and create the desired environment for them.

As a developing country, we desperately need to increase investment in Pakistan.

Bangladesh recently have been able to attract lot of "Foreign direct Investment". Indian company Tata has agreed to invest 3 billion dollars in the steel and power plant. This all bodes well for Bangladesh as this will attract bigger investment from other countries and thus fastening the economic progress.

As for the Pakistani investment, the investment is little over 1 billion not 3 billion as posted here..

http://news.xinhuanet.com/english/2005-11/...ent_3812127.htm

This is beneficial for both the countries as the Pakistani companies can benefit from the special privileges Bangladesh gets in European union while it means more employment for Bangladesh.

But this is not a one sided deal. Bangladeshi pharmaceutical companies like Beximco, Square have invested heavily in Pakistan.

Recently, Beximco co has also expressed eagerness to invest in Pakistani textile sector:


http://www.jang.com.pk/thenews/oct2004-dai...usiness/b23.htm

Akimatsuri,

There's nothing wrong with Bengalis living in Pakistan. It helps create a better multi-cultural community. What about all those illegal Pakistanis in the West ? Bengalis are humans after all, and if a few million choose to reside in Pakistan, then so be it.

Quite few Indian companies have shown desire to Invest in Pakistan as well. In sectors like, telecom, IT, Chemicals, Pharma and motor.

Because of political reasons, we must control the level of Indian investments. It is not in our best interest to see, too much of paksitani economic activity, in Indian hands.

Im in favor of It and other service companies to form joint ventures. But we must not allow entry into Telecom, Petrolium, Power and Heavy industry sectors.

for you fags who dont get the concept, and speak out of your asses:

If Pakistani investors invest that $3 Billion in the Pakistani textile industry, they wont make much in returns. Pakistan has limited market share and access, and that share is probably saturated, as it is. So, investing in an industry that wont be exporting a lot more than it already is doesnt make sense [dont get me wrong, Pakistan is doing its best to increase that market share, and no doubt, it will increase, but it takes time]. Now, on the other hand, Bangladesh enjoys concessions from developed countries, such as greater market access for its textiles.
You have to know the difference between GNP and GDP to understand this easily.

GDP = output from the territorial bounds of a nation
GNP = output from the nationals of a country, regardless of where it might have been produced.

this technically doesnt help our GDP, but the profits from the investment are those of Pakistani nationals, so its an increase in GNP.

Actually, Pakistani firms have been doing this for a while now.

http://nation.ittefaq.com/artman/publish/article_25702.shtml


Pakistan textile units to be relocated to Bangladesh

By BDNEWS, Dhaka
Sat, 18 Feb 2006, 10:47:00

Entrepreneurs of more than a dozen of Pakistani textile industries have decided to relocate their units to Bangladesh to slash their production cost by almost 50 percent, source said.

"Some home textile manufacturers from Panjab have expressed their interest to relocate industries to Bangladesh," Mir Nasir Hossain, President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), told BDNEWS, briefing on his recent visit to Pakistan.

The Karachi based Daily Times newspaper quoted a Pakistani industrialist as saying that about 20 units of bedlinen, readymade garments and knitwear have finalised their plans to shift to Bangladesh shortly.

"The plans were discussed with the Bangladeshi consul-general in Karachi and with senior officials of Bangladesh during Prime Minister Khaleda Zia's latest visit to Pakistan," the Daily Times quoted him without mentioning his name. He said Pakistani textile industry owners have also visited Bangladesh recently to study the cost-effectiveness of the planned relocations.

He did not give the exact number or category of units, which had decided to move to Bangladesh. However, he said home textile and readymade garment manufacturers were among those planning to move to Bangladesh.

"The Pakistani textile millers are very serious about investing in Bangladesh. They have unofficially informed us of relocating some of their units to Bangladesh," MA Awal, President of the Bangladesh Textile Mills Association President (BTMA), told BDNEWS.

He said Pakistani textile millers are eager to take the advantage of the Generalised System of Preference (GSP) to access the European Union (EU) markets. "The production cost is also lower in Bangladesh than in Pakistan," he said.

"Actually the exporters and manufacturers are really disappointed by the way our government handled the matters of anti-dumping duty with the EU and the issue of market access with the US," the Pakistani industrialist was quoted as saying by the newspaper.

He said the "failed" strategy led to imposition of non-tariff barriers by the EU. The EU had not only imposed anti-dumping duty on bed wear exports, but had also withdrawn GSP facility for Pakistan.

The Pakistani bedwear, one of the five major export items, is witnessing a sharp fall in orders from European countries after the EU in March 2004 imposed a 13.1 anti-dumping duty on imports from Pakistan.

What is all that fuss about, it is good that Pakistanis will make more money by exporting stuff from Bangladesh and they will surely invest in some other stuff like engineering which is the future. Anyway in few years as electricity get cheaper Pakistan's production cost will go down.


There are only few people leaving but there is huge flow of investment coming into the textile sector in Pakistan and exports are becoming larger and larger, while engineering sector is showing rapid progress which is very good. And not to mention all that FTA that will become active shortly would attract more persons in the exports field.

Well, good luck to them if they success.

But a word of caution, if any future government of Awami League nationalize/take over those factories/industries as compenation for 71 war debt.

Sometime Pakistanis try to play over smart and caught with their pants down...


I am not pessimist just cautious...