Muhammad Saleem

The thread manufacturing sector of Faisalabad, known as “the Manchester of Pakistan,” faces a downturn, leading to factory closures and layoffs, reports WealthPK.

Qamar Islam, a thread manufacturer, is deeply concerned about the situation like scores of others. Owing to this downturn, Qamar is left with no option but to shut down his factory, refusing jobs to more than one dozen employees. Talking to WealthPK, he said, “I was running a successful business but the situation has changed altogether now, as customers from other districts hesitate to invest.”

He said local fabric dealers were also holding back their investments in garments, leading to a sharp decline in bulk orders for the thread manufacturers. “The ongoing tension between Pakistan and Afghanistan has also contributed to the situation. Earlier, we would sell large quantities of thread to our customers from Afghanistan.

Now, they are not placing orders even through the traders plying their trade in Lahore, Peshawar, Mardan, Mansehra and other regions,” he said. “I did my best to persuade my Afghan clients through their local contacts to place orders and receive the supplies through the traders based in Peshawar but was told that they don't know when they would be able to get their products into Afghanistan,” the thread manufacturer said.

Qamar said the pricey electricity and raw material were also making it difficult for them to fight against the odds. Local thread manufacturers are finding it hard to sustain their operations, needing government assistance, he added. Talking to WealthPK, Qaiser Hafeez, a local shirt manufacturer, pointed out that local thread makers were still using outdated machinery at high rates. This situation makes it difficult for them to survive the surging competition in the market.

On the contrary, Qamar mentioned that they were sourcing good quality thread at affordable rates. He said the local manufacturers should improve their capacity and quality, and reduce prices to support the local industry. Discussing another challenge, Qaiser said high energy costs were hitting their business hard, leaving them with no immediate alternatives.

The soaring rates of electricity have caused unexpected problems, nearly doubling the manufacturing costs, forcing them to cut the costs to keep their products affordable. “We lack funds to install wind or solar-powered systems for energy production; we can cut costs by purchasing affordable supplies like threads, buttons, zips and fabric. Affordable supplies, particularly fabric and threads, reduce our expenses. The quality and rates of imported threads are within the reach of local shirt manufacturers.

The local thread manufacturers want to keep their prices low, but they lack resources to obtain or produce cheap electricity.” He said it's true that many factories were relying on old technology, but their production was good. Only cheap electricity and raw materials are the immediate solution to our issues. He said the issues of both sectors – thread manufacturers and shirt makers – will resolve with the government’s support.

It has been observed that the government departments are collecting taxes from the local industry, but these units lack adequate government support. Whenever the government announced incentives, they were for the mega industrial units. He suggested that all sectors must be treated equally, as they all contribute to strengthen the national economy.

Credit: INP-WealthPk