Pak textiles relocating to Bangladesh: The News

Industrialists lured by duty free access to EU, 40pc cheaper electricity in BD

Thursday, July 16, 2009
By Salman Siddiqui

KARACHI: A number of Pakistani textile houses are relocating their businesses to Bangladesh due to continuous hardship here, The News learnt on Wednesday.

Around four major Pakistani textile giants are in Bangladesh these days to shift their business so that they could furbish their exports orders in time, said one textile exporter of Pakistan on phone from Bangladesh.

“Towellers, a leading name in Pakistan’s home textile industry, is about to shift its business to Bangladesh,” informed Farrukh Maqbool, Chairman of Towel Manufacturers’ Association of Pakistan (TMAP) in a press statement and added that Towellers COO Pervaiz Kazi is travelling to Dhaka this week to meet with the Bangladesh Board of Investment (BoI) officials and finalise the company’s relocation strategy.”

Textile exporters had already warned the Pakistani authorities that they would move their businesses to Bangladesh when they were highlighting the anomalies in budget 2009-10 at PHMA House last month. These businessmen were included S M Obaid and Rafiq Habib Godil.

The reasons behind shifting their business to their competitor country i.e. Bangladesh are that the cost of doing business is continuously rising in Pakistan while country’s bureaucracy was formulating unnecessary regulations, said Syed Usman Ali, Former Chairman of TMAP.

He maintained that the law & order situation, on the other hand, was not allowing them to do their business tension free here. Owing to this law & order situation, the buyers did not come to Pakistan and they have to go to the buyers’ country or any other third country.

So that travelling to buyers’ country was an additional burden on our balance sheets, he added.

The frequent protest strikes, electricity outage and red tape and law and order altogether did not allow exporters to ship orders in time to the buyers, he elaborated. On the contrary, the Bangladesh was offering a number of incentives to its textile-exporting sector. According to rough estimates, doing textile business in Bangladesh is about 30-50 per cent cheaper than Pakistan, it was learnt.

Under the label of Least Developed Country (LDC), the Bangladesh enjoys zero rated exports to European Union, Australia and Canada, while Pakistan pays these levies range from 11-20 per cent, said Former Chairman of TMAP.

He compared that the electricity in Bangladesh was 40 per cent cheaper than Pakistan and 60 per cent cheaper in India as compared with Pakistan, he added. He maintained that the labour in Bangladesh was also available on low salaries. The maximum salary over there is 3,600 taka, while they in Pakistan have to pay Rs6,000/- plus 15 per cent salaries here.

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