Two Chinese companies to establish textile plants in Pakistan under SIFC agreement to boost technological advancement in the industry.
Two major Chinese companies have revealed plans to establish manufacturing plants in Pakistan to produce raw materials for the textile industry, with the support of the Special Investment Facilitation Council (SIFC).
China’s Rainbow Industries Ltd. will collaborate with Shaoxing Chemical Industry in a joint venture aimed at revitalizing Pakistan’s textile sector, as reported by Express News. This initiative is expected to bring millions of dollars in investment to produce affordable raw materials for local textile manufacturers.
Although challenges such as high energy tariffs and external investment difficulties persist, the Pakistani government is working on strategies to address these issues and support the sector’s growth.
The importance of revitalizing the textile industry was underscored during a two-day expo organized by Rainbow Group and the Punjab Dyes and Chemical Merchants Association. The “Nine Color & Chem Expo” saw participation from over 300 exhibitors from countries like China, Malaysia, Türkiye, and Iran, bringing together key stakeholders to discuss improvements in the sector.
To further support foreign investment, the federal government has introduced a 10-year duty-free scheme for importing machinery and establishing units in special economic zones. With SIFC’s backing, Chinese investments are expected to bring advanced technology to boost the growth of Pakistan’s textile industry.
Leaders from the All Pakistan Textile Mills Association (Aptma) Central and Southern Zones recently presented a charter of demands to ensure the smooth operation of the industry. These include reducing interest rates from 19.5% to 6-7%, lowering electricity costs to 8-9 cents per kilowatt-hour, and removing unnecessary taxes on imports and exports.
Aptma Southern Zone Chairman Zahid Mazhar and other leaders also highlighted the severe challenges faced by Sindh and Balochistan’s export-oriented textile industries due to inconsistent gas and electricity supplies.
Textiles and energy are critical to Pakistan’s economy, with textiles contributing 60% of exports and energy making up 30% of imports. While studies project an export potential of $50 billion by 2030, the textile sector only achieved $16.5 billion in FY 2022-23, with the historical peak being $22.1 billion in FY22.
Experts suggest the potential could reach $100 billion, which would significantly address Pakistan’s balance of payments deficit. The textile sector employs about 45% of the manufacturing labor force and is heavily reliant on cotton, making fluctuations in cotton crop production a major factor in the industry’s performance. Cotton yields have stagnated at 617 kg per hectare, in contrast to China’s significant yield growth over the past 30 years.
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