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News Clips 06 November, 2013




[ EU grants free status to Pak textiles ]
[ Exporters demand surcharge withdrawal ]
[ Textile sector profitability rises ]
[ Textile sector grows 40% in Q1 FY14 ]
[ TDAP organises Pakistan Pavilion at Heimtextil ]
[ 222 exhibitors from Pakistan to participate in Heimtextil ]
[ Marks & Spencer clothing sales fall ]

EU grants free status to Pak textiles   [ top ]

The News, November 06, 2013
ISLAMABAD: The European Union (EU) has granted duty free market access to Pakistani made-ups under the Generalised System of Preference (GSP) Plus status with effect from January 1, 2014.

The EU’s Parliament granted approval of this facility by a majority vote as Islamabad will get the benefits by increasing its exports in a major way.The facility will provide duty free access to 3,500 products. There was duty of 11 percent on Pakistani textiles, which has been abolished with effect from Jan 1, 2014.

“This facility will boost Islamabad’s exports by $1 billion,” said the official sources while talking to The News here on Tuesday night.The EU block of 27 member countries granted this facility to the textile sector, including bed linen sector. These 13 textile products represent $231 million of Pakistani exports to the EU (9% of their dutiable imports).

Talking to this scribe, former adviser to PM on Textile, Mirza Ikhtiar Baig, thanked the Punjab governor who made hectic lobbying with the EU parliamentarians to win support for providing this facility to Pakistan.

Exporters demand surcharge withdrawal   [ top ]

Dawn, November 06, 2013
KARACHI, Nov 5: Exporters are demanding immediate withdrawal of Export Development Surcharge (EDS) which is being deducted by banks from export proceeds at the rate of 0.25 per cent and directly deposited in the treasury.

The major irritant over which exporters are seeking immediate withdrawal of EDS is government interference in allocation of funds from Export Development Fund (EDF) to sectors other than export.

Fawad Ijaz Khan, patron-in-chief of Pakistan Leather Garments Manufacturers and Exporters Association (Plgmea), stated that the surcharge is being levied on exports as per Export Development Fund Act 1998.

He said that as per act all funds collected on account of EDS are supposed to be credited to Ministry of Commerce (MoC) account on first day of each fiscal year (July 1). But unfortunately, he said for the last several years the Ministry of Finance (MoF) is not transferring the funds collected against EDS into MoC account.

Consequently since 2005, Rs19 billion of EDS liability is pending with MoF and as a result exporters, who are being directly taxed, are not benefiting from the fund because they are not available with the ministry.

Mr Fawad said that it was decided in a meeting of EDF board and also approved by the former prime minister that EDS collection should be credited in a separate account instead of depositing it into federal treasury.

However, he regretted that the decision was never implemented.

As a result of this, he said, sanctioned projects of export promotion worth Rs3.4 billion, including the one approved for Plgmea worth Rs501 million, are suffering due to delay in disbursement of EDS amount to MoC.

Similarly, Shabir Ahmed, patron-in-chief of Pakistan Bedwear Exporters Association (PBEA), said that in EDF board meeting held in July this year, a proposal made to pay Inland Freight Subsidy on export of sugar was rejected by the board members.

However, ECC, he said approved this subsidy and sanctioned Rs1bn.

The private sector EDF board members, Mr Shabir said, strongly opposed this proposal because this decision was being imposed by the ECC on the EDF board while several export promotion projects were delayed due to non-availability of funds.

Since the ministry, he said was not happy with the decision of EDF board and suggested to the ministry to constitute EDF Board which consists of president of FPCCI and five prominent chambers of all provinces as well as 12 members of leading export association, along with senior government officials.

He feared that if the present EDF board is changed, the new board will comprise small chambers and export associations and this move would not be acceptable to leading chambers and export associations.

Textile sector profitability rises   [ top ]

The News, November 06, 2013
KARACHI: Pakistan’s largest industry, textile, impressively started the current fiscal year by posting 40 percent rise in profitability in the first quarter ended September 30.

“This was due to improved demand and better yarn margins. Further boost to the profits was provided by depreciating rupee and cheaper financing rates,” Tahir Saeed at Topline Securities said. Favouring fortunes resulted in improved overall textile output in the first quarter of FY14, which can be gauged from 9.3 percent growth in textile exports to $3.6 billion.

The same is reflected from listed textile companies’ profits, which increased by 40 percent, or Rs2.6 billion, to Rs9.1 billion in the quarter under review as compared to Rs6.5 billion in the same period last fiscal year.

The actual profit growth of the entire textile industry, including unlisted sector will be much more than Rs9.1 billion.

Upward trajectory of profits is mainly attributed to higher volumetric sales and improved margins. Strong cotton yarn and grey cloth demand from China and neighboring countries has contributed to higher unit sales, while margins increased due to stable cotton prices and around six percent rupee depreciation against the dollar, Saeed said.

In the quarter, local cotton prices remained in the range of Rs6,752 to Rs7,770 per 40kg as compared to Rs5,573 to Rs6,645 in the first quarter of FY13, depicting less volatility this time.

Export volumes of yarn, bedwear and towels rose by 39 percent, 32 percent and 13 percent, respectively.

“The rupee depreciation, continuation of China cotton policy and relatively better energy situation in the country will keep on supporting the textile sector in making profits, we believe,” Saeed said.

“Expected GSP Plus status from EU Parliament will further augment positive effects, especially for composite units. On the other hand, potential revision of China cotton policy, recent increase in energy prices and higher inflation forecast for FY14 are expected to impact the sector’s profitability, going forward.”

Textile sector grows 40% in Q1 FY14   [ top ]

Daily Times, November 06, 2013
KARACHI: The textile sector posted 40 percent rise in profitability in the first quarter of fiscal year 2013-14 (Q1 FY14) due to improved demand and better yarn margins.

The textile people said on Tuesday further boost to the profits was provided by depreciating rupee and cheaper financing rates.

Profits of the sector’s listed textile firms increased by 40 percent on yearly basis to Rs 9.1 billion in the Q1 FY14.

The same was also reflected at the local bourse as shares of listed textile firms have shown price performance of 12 percent versus Karachi Stock Exchange 100-share index’s return of just 2.2 percent in Q1 FY14.

In the textile sector, Nishat Mills (NML) had a target price of Rs 111 per share, which most brokers advised to ‘buy’.

Favouring fortunes resulted in improved overall textile output in Q1 FY14, which could be gauged from 9.3 percent yearly growth in textile exports to $3.6 billion. In terms of rupee, overall textile exports went up 19 percent on yearly basis to Rs 368 billion. The same is reflected from listed textile companies’ profits, which increased by Rs 2.6 billion (40 percent on yearly basis) to Rs 9.1 billion in Q1 FY14 as compared to Rs 6.5 billion in the same period last year.

The experts said this analysis was based on selected textile firms (61 companies) including spinners, weavers and composites.

The sector includes all textile units having a minimum Rs 250 million market capitalisation at KSE. However for the sake of comparability, they have omitted Azgard Nine and Amtex Limited due to their abnormal and volatile bottomline. Though the sample covers 85 percent of textile sector market cap, it was very small as compared to total Pakistan textile industry. So the actual profit growth of the textile industry would be much more than Rs 9.1 billion.

They believe upward trajectory of profits was mainly attributed to higher volumetric sales and improved margins. Strong cotton yarn and grey cloth demand from China and neighbouring countries has contributed to higher units sales while margins increased due to stable cotton prices and around 6.0 percent rupee depreciation against the dollar.

In Q1 FY14, local cotton prices remained in the range of Rs 6,752 to Rs 7,770 per 40 kilogrammes as compared to Rs 5,573 to Rs 6,645 in Q1 FY13, depicting less volatility this time.

Textile sector performed well in Q1 FY14 versus Q4 FY13 as shown by Pakistan textile exports, which increased by 3.6 percent on quarterly basis to $3.58 billion versus $3.45 billion in Q4 FY13. Export volumes of yarn, bed wear and towels rose by 39 percent, 32 percent and 13 percent, respectively.

This coupled with rupee depreciation against dollar in Q1 FY14 boded positive impact on the profitability of sector.

Rupee depreciation, continuation of China cotton policy and relatively better energy situation in the country will keep on supporting the textile sector in making profits.

Expected Generalised System of Preferences plus status from European Union Parliament will further augment positive effects especially for composite units.

On the other hand, potential revision of China cotton policy, recent increase in energy prices and higher inflation forecast for FY14 are expected to impact sector’s profitability, going forward.

TDAP organises Pakistan Pavilion at Heimtextil   [ top ]

The News, November 06, 2013
KARACHI: Pakistan has become one of the largest participants in the world’s biggest home textiles fair – Heimtextil 2014 with a big contingent of 222 exhibitors, a statement said.

Heimtextil, Frankfurt is the biggest international trade fair for home, towel and contract textiles and the global benchmark for quality design textiles of innovative functionality.

As the first trade fair of the year, Heimtextil, which is held on four fair days in January, is a platform for manufacturers, retailers and designers, it said.

International exhibitors will display their products to trade visitors will be from January 8 to 11, 2014. Last year, the fair showcased 2,658 exhibitors from 62 countries and 66,000 visitors from 129 countries.

From Pakistan 222 exhibitors will take part in the German fair, which will make it the fourth largest country at the fair, Messe Frankfurt’s country representative and director fairs and exhibitions, Omar Salahuddin, said, adding that it is the largest participation of exhibitors in any exhibition and Pakistan will have direct exhibitors and a national pavilion organised by the Trade Development Authority of Pakistan.

TDAP will participate with 45 exhibitors in Hall 10.0 C29, D23, D40 and 10.3 D31, the statement said.

Pakistani companies are located in four levels of Hall 10 with the premium exhibitors such as Gul Ahmed, Sitara, Younus located in Hall 10.2. Joint stand organised by the TDAP in Hall 10.0 and 10.3 and the joint stand organised by the Fairs and Exhibition Service in Hall 10.0.

Salahuddin said: “The exhibition is completely sold out and there is a waiting list from Pakistan. The quality of products and stand presentation from Pakistan is increasing every year and we are expecting a very successful fair for Pakistan.”

A large number of the buyers are interested in carpets, too. “Holistic textile furnishing concepts also, of course, include the carpet – that is why we are particularly pleased that Copa is presenting this initiative for the sector for the first time at a trade fair,” Olaf Schmidt, vice president of Textiles & Textile Technologies at Messe Frankfurt, said.

222 exhibitors from Pakistan to participate in Heimtextil   [ top ]

Daily Times, November 06, 2013
KARACHI: Pakistan has become one of the largest participants in world’s biggest home textiles fair – Heimtextil 2014 - with a big contingent of 222 exhibitors.

Heimtextil, Frankfurt is the biggest international trade fair for home, towel and contract textiles and the global benchmark for quality design textiles of innovative functionality.

As the first trade fair of the year, Heimtextil, which is held on four fair days in January, is a platform for manufacturers, retailers and designers. The next time international exhibitors will be showing off their product to trade visitors will be from January 8 to 11, 2014. Last year fair showcased 2,658 exhibitors from 62 countries and 66,000 visitors from 129 countries. From Pakistan 222 exhibitors will take part in Germany which will make it the 4th largest country at the fair, says Messe Frankfurt’s country representative and Director Fairs and Exhibitions Omar Salahuddin. It is the largest participation of exhibitors in any exhibition and Pakistan will have direct exhibitors and a national pavilion organised by Trade Development Authority of Pakistan (TDAP). TDAP will be participating with 45 exhibitors in Hall 10.0 C29, D23, D40 and 10.3 D31.

Pakistani companies are located in four levels of Hall 10 with the premium exhibitors such as Gul Ahmed, Sitara, Younus located in hall 10.2. Joint stand organised by TDAP in Hall 10.0 and 10.3 and the joint stand organised by Fairs and Exhibition Service in Hall 10.0

According to Omer Salahuddin, “The exhibition is completely sold out and there is a waiting list from Pakistan. The quality of products and stand presentation from Pakistan is increasing every year and we are expecting a very successful fair for Pakistan.”

A large number of the buyers are interested in carpets, too. “Holistic textile furnishing concepts also, of course, include the carpet – that is why we are particularly pleased that Copa is presenting this initiative for the sector for the first time at a trade fair,” says Messe Frankfurt’s Textiles and Textile Technologies Vice President Olaf Schmidt.

Marks & Spencer clothing sales fall   [ top ]

The News, November 06, 2013
LONDON: British retailer Marks & Spencer reported a ninth consecutive quarterly fall in underlying sales of general merchandise, with its much vaunted new season clothing ranges only managing to slightly slow the rate of decline.

The 129-year-old group, which serves 21 million customers a week from nearly 770 British stores, also posted on Tuesday a nine percent fall in first-half profit - down for a third year running, though in line with expectations.

M&S said its overall expectations for the 2013-14 year were unchanged even though it remained cautious about the outlook given continued pressure on consumers’ disposable incomes.

Britain’s biggest clothing retailer, which also sells homewares and food, said sales of non-food products, spanning clothing, footwear and homewares, at stores open over a year fell 1.3 percent in the 13 weeks to Sept. 28, its fiscal second quarter.

That compared with analyst forecasts of down 0.4-2.5 percent and a first quarter decline of 1.6 percent.