Pakistan Textile Exports May Be Hurt by Gas Shortage, Group Says

Pakistan’s textile shipments, which contribute 60 percent to the country’s total export earnings, may miss an industry target by 25 percent because of an energy crisis that has shut factories, a textile group said.

“There will be negative growth,” Shahzad Ali Khan, chairman of the Standing Committee for Energy at the All Pakistan Textile Mills Association, said in a telephone interview. “The gas issue is sinking the industry.”

Exports of textiles may be $12 billion in the financial year that began in July, compared with the group’s target of $16 billion, Khan said yesterday. Shipments rose 35 percent to $13.8 billion the previous year. Pakistan’s total exports fell 10 percent from a year earlier last month, a report showed today.

Pakistan is preparing for a gas shortfall of 1.05 billion cubic feet a day by February, Petroleum Minister Asim Hussain said Nov. 13. The nation’s energy shortage has caused daily power outages and riots and caused factories to shut down.

Sui Northern Gas Pipelines Ltd., which serves more than 3.9 million consumers in the country’s north and central parts, said on its website factories won’t receive gas from Dec. 8 to Dec. 15. Some 80 percent of the textile industry is dependent on gas plants, the association has said.

Factory Shutdowns

“Already, 20 percent of our members have shut down their factories here,” Anis-ul-Haq, secretary of the group’s Punjab office, said by telephone. “This is because of gas shortages, and also because of other related problems like expensive furnace oil and no electricity. It may swell to 40 percent if things do not improve.”

Almost 75 percent of the textile group’s 400 members are based in Punjab, which is Pakistan’s largest province in terms of population. The textile industry provides employment to 38 percent of the country’s manufacturing labor force.

Some 20 percent of the country’s textile workers are out of jobs already and the number could swell by another 20 percent “if things are not controlled,” Haq said. The industry has experienced 150 days of shutdowns since January, he said.

Pakistan policy makers are struggling to boost economic growth from 2.4 percent in the year ended June, one of the lowest expansions in the past decade. Terror attacks have killed at least 35,000 people since 2006, according to government estimates. Floods in August forced more than one million people from their homes and damaged crops in parts of southern Pakistan still recovering from last year’s worst ever monsoon inundations that devastated the region.

To contact the reporter on this story: Khurrum Anis in Karachi, Pakistan at kkhan14@bloomberg.net

To contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net

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