Faisalabad industry faces a major crisis as over 100 textile factories, including Sitara Textile Mills, shut down due to increased energy tariffs and costs.
Chaudhry Salamat Ali, Group Leader of the Pakistan Hosiery Manufacturers & Exporters Association, highlighted the dire situation, noting that unless urgent governmental intervention occurs, the industry faces further shutdowns next month. Escalating production costs due to higher energy tariffs and mark-up rates have closed Sitara Textile Mills.
The sector once thrived on global demand and decreased production capacity, with some mills slashing output by as much as 40%. The recent shutdown of another unit of Sitara Textile alone has resulted in the layoff of an additional 900 workers, contributing to the rising unemployment figures in the city, which Salamat estimates to be between 150,000 and 200,000.
Khurram Mukhtar, Patron Chief of the Pakistan Textile Exporters Association, emphasized the paradox of the current global market conditions, which are theoretically favourable for boosting exports. He pointed out that many American and European brands are diverting their orders from China and Bangladesh, potentially influencing Pakistani exports. However, the benefits are yet unrealized due to domestic fiscal policies.
Mukhtar called on the government to reduce electricity and gas costs and lower single-digit rates to help the textile sector capitalize on these international opportunities. He suggested that reducing mark-up rates to at least 14% could be a significant first step towards revitalizing the industry and securing the employment of thousands. He warned that even the currently operational mills might find it unsustainable to continue without these changes and other economic and social repercussions for the region.
