Nov. 13 (Bloomberg) -- Pakistan’s overseas sales of textiles are threatened by growing terror attacks, power outages and poor market access, said Umer Mansha, chief executive officer of Nishat Mills Ltd., the nation’s biggest exporter.

“Textile buyers like to come, see and feel the product,” Mansha said in an interview at his Lahore office yesterday. “The situation is such that buyers are simply not willing to come here. It’s very hard for us to get new clients.”

The textile industry, which accounts for two-thirds of Pakistan’s exports, has struggled to revive growth amid a global slowdown in demand, power shortages and rising interest rates. Nishat, which produces 400,000 garments a month for Levi Strauss & Co., Gap Inc. and other customers in the U.S., Europe and China, started selling to Russia for the first time this year.

“They have to look for new markets to remain competitive,” said Bilal Qamar, analyst at JS Capital Ltd. in Karachi. “Africa and China can be markets for them since their quality is good, they just have to market properly.”

Nishat’s shares rose 0.7 percent to 59.08 rupees as of 11 a.m. on the Karachi Stock Exchange today. The stock has more than doubled this year, compared with the benchmark KSE Index’s 45 percent gain.

Declining Exports

Textile exports fell 11 percent to $2.44 billion in the first three months of the fiscal year, according to the Federal Bureau of Statistics. The government plans to increase textile exports to $25 billion by 2014 from $9.78 billion in the 12 months ended June 30.

“The export target does not look achievable,” said Mansha, 36, who has worked with the family business since he graduated from Boston-based Babson College in 1995. “The U.S. does not look at us the same way they look at India and China. We have to bring to their attention what we have done as an ally in the war on terror and get favorable market access.”

Pakistan has been pressing for the so-called generalized system of preferences status from the European Union that will enable exports at reduced tariffs and market access to the U.S.

“Trade concessions from EU and U.S. will have a positive impact on textile exports from Pakistan, but the need to become more competitive vis-à-vis regional peers still remains,” Karachi-based Al Falah Securities Ltd. said in a Oct. 6 report.

A spate of suicide bombings and commando-style gun attacks in major cities has killed almost 350 people since October. A bomb today outside the headquarters of Pakistan’s spy agency in the city of Peshawar killed nine people.

After 9/11

“Earlier, when security worsened after 9/11 we used to take out a map and show our buyers where Afghanistan is,” Mansha said. “Now there are bombings even in Lahore and that makes buyers uncomfortable.”

In an offensive beginning Oct. 17, the army sent 28,000 soldiers in three columns into South Waziristan, near Pakistan’s border with Afghanistan, to target 10,000 Taliban fighters.

At least 100 textile spinning mills closed in the past two years and a million people lost their jobs because of power outages, according to the All-Pakistan Textile Mills Association. The industry employs a third of Pakistan’s workers.

Pakistan plans to add a total of 5,000 megawatts of electricity to the national grid by 2013 after violent demonstrations against power outages broke out in several cities in past two years. Pakistan has faced power shortages of as much as 4,500 megawatts a day, or 30 percent of capacity.

Major Products

The nation’s major textile exports are knitwear, bed linen, cotton cloth and cotton yarn and the U.S. and Europe are its major buyers. The industry’s profits fell 57 percent in the year ended June 30, according to an Oct. 14 report by JS Global.

Nishat’s net profit fell 27 percent to 513 million rupees in the three months ended Sept. 30 because of high cotton prices. Sales rose 3 percent to 6.39 billion rupees. The company generates 85 percent of its revenue from overseas sales.

Home textiles make up the majority of Nishat’s sales, Mansha said. About 35 percent of its products are bought by U.S. customers, he said.

Nishat Group is Pakistan’s biggest business conglomerate with nine listed companies in banking, cement, textiles, insurance and power.

To contact the reporter on this story: Farhan Sharif in Karachi at fsharif2@bloomberg.net.

Last Updated: November 13, 2009 01:09 EST