PAKISTAN ECONOMY

M.Rahim Ejaz
HASNAIN IRFAN COTTON AND GINNERS
History of Cotton
What is Cotton?
Cotton, belonging to a family that include hibicu and o!"a, #"oduce a
natu"al $egetable fibe" ued in the manufactu"e of cloth% Cotton #"oduce
&eet necta" that att"act a $a"iety of det"ucti$e inect #et, including
the boll &ee$il, boll&o"m, a"my&o"m, and the "ed #ide"% In addition to
inect #et, the"e i alo a $e"y det"ucti$e fungu, called the &ilt that
attac! the "oot ytem of the cotton #lant%
S!"i!s
A fe& #ecie a"e g"o&n comme"cially' thee "ange f"om a mall t"ee of
Aia, to the common Ame"ican (#land cotton, a lo&, multi b"anched h"ub
that i g"o&n a an annual% Anothe" #ecie include the long)fibe"
Egy#tian and Sea Iland cotton botanically de"i$ed f"om the Egy#tian
#ecie b"ought to the (nited State about *+,,% Sea Iland cotton th"i$e
in the uni-ue climate of the Sea Iland, located off the outheate"n
coat of the (nited State, and on the iland of the .et Indie uch a
/a"bado% A &ith Egy#tian cotton, the fibe" i &hite and lut"ou but it
fibe" length i longe" than that of any othe" ty#e of cotton, &hich #e"mit
the #inning of e0t"emely fine ya"n% 1ima, o"iginally called Ame"ican)
Egy#tian cotton, i a hyb"id ty#e% It i the only $a"iety of long)fibe" cotton
no& g"o&n in comme"cially ignificant -uantitie in the (nited State,
&he"e it i culti$ated unde" i""igation in the South&et%
#oot St!s
It i almot im#oible to dete"mine the o"iginal habitat of the $a"iou
#ecie of cotton% Scientit ha$e dete"mined fibe" and boll f"agment
f"om the Tehuac23n 4alley of 5e0ico to be about 6,,, yea" old% The
#lant ha ce"tainly been g"o&n and ued in India fo" at leat 7,,, yea"
and #"obably fo" much longe"% Cotton &a ued alo by the ancient
Chinee, Egy#tian, and No"th and South Ame"ican% It &a one of
the ea"liet c"o# g"o&n by Eu"o#ean ettle", ha$ing been #lanted at the
8ameto&n colony in *9,6%
Cotton &a the mot im#o"tant c"o# in South befo"e the Ame"ican Ci$il
.a" :*;9*)*;97<% Sla$e uually &o"!ed all day #ic!ing cotton fo" thei"
mate" &hile o$e"ee" &atched f"om thei" ho"e%
PAKISTAN ECONOMY
M.Rahim Ejaz
HASNAIN IRFAN COTTON AND GINNERS
England &a one of the South= la"get cotton cutome", many the"efo"e
Southe"ne" belie$ed England &ould ente" the &a" on thei" behalf to
1"ee"$e England> u##ly of cotton% The South &a confident thi &ould
au"e a &ift Confede"ate $icto"y%
Cotton &a !ing and ?ouiiana &a -ueen@ Ne& O"lean &a the maAo"
l+th)centu"y #o"t fo" cotton e0#o"t, and ?ouiiana= fe"tile $alley &e"e the
South= maAo" cotton #"oduce"% The Confede"ate go$e"nment "ealiBed
cotton &a a good a if not bette" than gold% Cotton= $alue ga$e
?ouiiana a maAo" financial "ole du"ing the &a"% Not only did the
Confede"acy ue the fo"eign e0change #aid to the South fo" the e0#o"ted
*;9, cotton c"o#, the Confede"ate go$e"nment #u"chaed cotton to ue
both a ecu"ity fo" Eu"o#ean loan and fo" e0#o"t%
Thi #lan &o"!ed until *;9C &hen the (nion a"my occu#ied Ne& O"lean
and /aton Rouge% Fede"al fo"ce "aided f"om 5o"gan City u# to
Ale0and"ia% 4ic!bu"g and 1o"t Hudon fell, gi$ing the (nion cont"ol of the
5iii##i Ri$e"%
A Confede"ate t"oo# "et"eated, they det"oyed a much of the cotton
c"o# a #oible, to #"e$ent thi DgoldD f"om falling into enemy hand%
History of Cotton $innin%
The cotton gin, in$ented in *6+E by Eli .hitney, &a deigned to e#a"ate
"a& cotton fibe" f"om eed and othe" fo"eign mate"ial #"io" to baling
and ma"!eting% The deign &a o efficient that it "emain $i"tually
unchanged to the #"eent day%
Ame"ican Eli .hitney in$ent the cotton gin, a de$ice that "a#idly and
effecti$ely "emo$e eed f"om cotton fibe"% Thi ta! had #"e$iouly been
done by hand, ma!ing fibe" #"oceing lo& and e0#eni$e% The in$ention
&ill hel# #u" e0#anion of the cotton indut"y in the outhe"n (nited
State% The South a booming cotton economy in tu"n &ill inc"eae the
"eliance on la$e, o&ing to the labo")inteni$e cha"acte" of cotton
ha"$eting%
Although the in$ention of the cotton gin changed hito"y, it in$ento", Eli
.hitney, did not "ea# much of a #"ofit% The gin made cotton cleaning o
PAKISTAN ECONOMY
M.Rahim Ejaz
HASNAIN IRFAN COTTON AND GINNERS
efficient that the c"o# became a #"ima"y ente"#"ie fo" the South%
Ho&e$e", #atent di#ute and u##ly #"oblem !e#t .hitney f"om
uccefully #"oducing the cotton gin% Hi late" $entu"e into a"m
manufactu"ing &a mo"e f"uitful, and .hitney became a t"ong #"omote"
of ma #"oduction and inte"changeable #a"t%
The "ole of the cotton gin ha changed d"amatically in the lat 7, yea" to
!ee# u# &ith technological and #"oduction change in the cotton indut"y%
At one time, the gin= only function &a to "emo$e cottoneed f"om the
fibe"% Today, gin mut not only e#a"ate the eed f"om the fibe",
they mut alo d"y and clean the fibe" and #ac!age it into bale befo"e it
"eache the te0tile mill%
All gin diffe" in ome a#ect of the ginning #"oce% In the South&et, fo"
intance, gin a"e e-ui##ed &ith both a& and "olle" ginF a& gin fo"
ginning (#land cotton, and "olle" gin fo" ginning 1ima cotton, a cotton
g"o&n almot e0clui$ely in thi "egion of the Cotton /elt% Ele&he"e in
the Cotton /elt, gin ue only a& gin in thei" o#e"ation%

Ro&! of "otton in Pa'istan
1a!itan i the fifth la"get #"oduce" of cotton in the &o"ld, the thi"d
la"get e0#o"te" of "a& cotton, the fou"th la"get conume" of cotton, and
the la"get e0#o"te" of cotton ya"n% *%E million Fa"me" :out of a total of 7
million< culti$ate cotton o$e" E million hecta"e, co$e"ing *7 #e" cent of
the culti$able a"ea in the count"y% Cotton and cotton #"oduct cont"ibute
about *, #e" cent to GD1 and 77 #e" cent to the fo"eign e0change
ea"ning of the count"y% Ta!en a a &hole, bet&een E, and G, #e" cent of
the cotton end u# a dometic conum#tion of final #"oduct% The
"emaining i e0#o"ted a "a& cotton, ya"n, cloth, and ga"ment%
Cotton #"oduction u##o"t 1a!itan> la"get indut"ial ecto", com#"iing
ome G,, te0tile mill, 6 million #indle, C6,,,, loom in the mill ecto"
:including *7,,,, huttle le loom<, o$e" C7,,,,, loom in the non)mill
ecto", 6,, !nit&ea" unit, G,,,, ga"ment unit :&ith C,,,,,, e&ing
machine<, 97, dyeing and finihing unit :&ith finihing ca#acity of *,*7,
million -ua"e mete" #e" yea"<, nea"ly *,,,, ginne"ie, E,, oil e0#elle",
and *7,,,, to C,,,,, indigenou, mall cale oil e0#elle" :!ohl u<% It i
by any meau"e 1a!itan> mot im#o"tant economic ecto"% Not
u"#"iingly, go$e"nment #olicy ha gene"ally been ued to maintain a
table and often "elati$ely lo& dometic #"ice of cotton, e#ecially ince
PAKISTAN ECONOMY
M.Rahim Ejaz
HASNAIN IRFAN COTTON AND GINNERS
*+;9);6 th"ough the im#oition of e0#o"t dutie, in o"de" to u##o"t
dometic indut"y%
#irst (T Cotton $ro)n in Pa'istan
Cotton i an im#o"tant cah c"o# fo" 1a!itan !no&n a H&hite goldI% It
account fo" ;%C #e"cent of the $alue added in ag"icultu"e and about E%C
#e"cent to GD1' a"ound t&o thi"d of the count"y> e0#o"t ea"ning a"e
f"om the cotton made)u# and te0tile &hich add o$e" JC%7 billion to the
national economy' &hile hund"ed of ginning facto"ie and te0tile mill in
the count"y hea$ily de#end u#on cotton% ?ife of million of fa"me" i
de#endent on thi c"o#, in addition to million of #eo#le em#loyed along
the enti"e cotton $alue chain, f"om &ea$ing to te0tile and ga"ment
e0#o"t The a"ea unde" the culti$ation of cotton c"o# ha been inc"eaed
ignificantly in the lat E, yea" ) a"ound 6%;7 million ac"e in C,,7),9 a
com#a"ed to 6%C million ac"e in C,,C),E% /eide being the &o"ld> fou"th)
la"get cotton #"oduce" and the thi"d la"get e0#o"te" of "a& cotton and a
leading e0#o"te" of ya"n in the &o"ld ou" yield #e" ac"e "an! *Eth in the
&o"ld' a a "eult 1a!itan annually im#o"t a"ound *%7)C%,, million bale
of cotton to meet g"o&ing demand f"om local te0tile mill' the"efo"e it ha
become $ital fo" 1a!itan to inc"eae it yield #e" ac"e%
If &e loo! at the 1a!itan cena"io, t&o maAo" ty#e of #et a"e damaging
ou" cotton c"o# K uc!ing and che&ing' to ce"tain e0tent it i eaie" to
cont"ol uc!ing #et by t"ong #eticide but i $e"y challenging to cont"ol
che&ing #et ) /oll&o"m !no&n a HSundieI K Ame"ican, A"my, 1in!
and S#otted ) caue maAo" de$atation in the cotton c"o# field' a a
"eult of thi, o$e"all both -uality of lint and #"oduction of cotton ha$e
declined ubtantially% 5o"eo$e", "ecent diate" "eulting f"om the cotton
leaf cu"l $i"u :C?C4< #"ead in 1unAab and Sind #uhed ou" intitute li!e
1a!itan Atomic Ene"gy Commiion :1AEC<, National Intitute fo"
/iotechnology and Genetic Enginee"ing :NI/GE< and Nuclea" Intitute of
Ag"icultu"e and /iology :NIA/< in Faialabad, and National cente" of
E0cellence in 5olecula" /iology :NCE5/< at 1unAab (ni$e"ity ?aho"e to
co#e &ith uch #"oblem' ignificant amount of financial "eou"ce and
man#o&e" ha$e been committed by the Go$e"nment of 1a!itan fo"
de$elo#ing genetically modified :G5< local cotton $a"ietie%
Fa"me", &ho culti$ated thee /t cotton $a"ietie at hea"t of cotton
PAKISTAN ECONOMY
M.Rahim Ejaz
HASNAIN IRFAN COTTON AND GINNERS
g"o&ing "egion in 1unAab ) /aha&al#u", 5ultan, 5uBaffe" Ga"h and La"o"
1a!!a' obe"$ed and e$aluated inde#endently it "eitance and
uce#tibility to diffe"ent #et including facto" li!e a biotic t"e and
yield than com#a"ed it &ith non /t cotton $a"ietie g"o&n in the ame
location% A la"ge numbe" of fa"me" ha$e $iited thee field, and
become a&a"e of the benefit of the locally de$elo#ed /T cotton%
Today, all maAo" cotton #"oducing count"ie a"e benefiting f"om the
culti$ation of /t Cotton% In the lat eaon 7G #e"cent of cotton c"o#
g"o&n in (SA, 69 #e"cent in China and ;, #e"cent in Aut"alia &e"e &ith
HingleI o" HdoubleI /T gene technology% India, the &o"ld> thi"d)la"get
cotton)g"o&e" ha culti$ated *%E9 million ac"e of /T cotton c"o#% It i
e0#ected that &ithin t&o yea" mo"e than half the &o"ld> cotton may be
g"o&n f"om genetically modified c"o#%
C"o# "e$ie& ca""ied out by $a"iou inde#endent ou"ce illut"ate that
un"eco"ded o&ing of ne& /t cotton $a"ietie alo #layed it "ole in
inc"eaing cotton #"oducti$ity, &ith unofficial etimate uggeting E to 7
#e"cent of the a"ea in 1unAab and *, to *7 #e"cent of the a"ea in Sind may
ha$e been #lanted in t"angenic cotton%
PAKISTAN ECONOMY
M.Rahim Ejaz
HASNAIN IRFAN COTTON AND GINNERS
HASNAIN
IR#AN
COTTON AN*
$INNERS
PAKISTAN ECONOMY
M.Rahim Ejaz
HASNAIN IRFAN COTTON AND GINNERS
Hasnain Irfan Cotton an+ $inn!rs
Intro+,"tion
Hanain I"fan Cotton and Ginne" i one of the oldet and famou
o"ganiBation in the D%G%Lhan a"ea% It i located at 8am#u" "oad D%G%Lhan%
It i a #a"tne"hi# o"ganiBation% They a"e engaged in thi field fo" mo"e
than C, yea"% They a"e famou fo" thei" good&ill and "e#utation in the
local a &ell a count"y&ide ma"!et% It i thei" family buine% No& they
a"e e0#anding thei" buine% They "ecently #lanted ne& machine"y fo"
the cotton eed% They ta"ted thei" buine &ith only one cotton ginning
facto"y, no& they ha$e t&o cotton ginning facto"ie and alo ha$e ha"e
in othe" buinee%
Nat,r! of (,sin!ss
It i not an eay Aob to #e"fo"m by the manage" and o&ne" of the
o"ganiBation% A manage" face many difficultie du"ing #e"fo"ming it
Aob% At local le$el #"ice fluctuate at daily bai% It i $e"y difficult to
#"edict the #"ice of ne0t day% Ne0t day &hat ha##en, no body !no&
about it% The "ate of "a& cotton i "elated to the "ate of a bale of cotton
lint% If an o"ganiBation buy "a& cotton and high #"ice and ne0t day #"ice
fall then the o"ganiBation u"ely face the deficit in that buying and if thi
t"end goe th"oughout the eaon then the o"ganiBation mut face the
condition of total lo% The"e a"e many e0am#le #"eent in the D%G%Lhan
a"ea% They become ban! defaulte"' ome of them old thei" buine to
"e#ay thei" loan% Thu thi i the buine of high "i! and high "etu"n%
Or%anization Wor'in%
The natu"e of o"ganiBation &o"!ing i to buy "a& cotton, #"oduce cotton
lint, oil and oil ca!e and ell the #"oduction fo" #"ofit gene"ating #u"#oe%
PAKISTAN ECONOMY
M.Rahim Ejaz
HASNAIN IRFAN COTTON AND GINNERS
In,ts
In the cotton indut"y only "a& cotton i ued a an in#ut fo" the
#"oduction #"oce%
In,t S,&i!r
Thei" u##lie" i an inte"media"y #e"on bet&een them and fa"me"% He
buy the "a& cotton f"om the fa"me" and they #u"chae it f"om him% In
anothe" &o"d he i doing buine of buying and elling of "a& cotton%
O,t,ts
Afte" the com#letion of #"oduction #"oce, "a& cotton #"oduce
*% Cotton lint
C% Cotton eed
No& fu"the" cotton eed i #"oceed and they #"oduce
*% Ra& Oil
C% Refined Oil
E% Oil ca!e
O,t,t S,&i!r
No& thei" out#ut become in#ut fo" othe" indut"ie% They ell cotton lint
to te0tile mill &he"e it become th"ead and cloth% Anothe" out#ut i
cotton eed' it i fu"the" #"oceed and it #"o$ide oil and oil ca!e% Oil
become in#ut of Ghee indut"y and oil ca!e become the in#ut of
li$etoc! and of oa# indut"y% Oil ca!e i alo old to toc!e" fo" #"ofit
gene"ating #u"#oe%
(,yin% an+ S!&&in% Pro"!ss
1a!itan cotton ginne" aociation :1CGA< #lay an im#o"tant "ole in
buying and elling #"oce% 1CGA i di"ectly lin!ed &ith the Ne& Mo"!
t"ade coo#e"ation% It et "ate of "a& cotton #e" G, !g and cotton lint #e" *
bale of cotton% Thee a"e "e$ied afte" e$e"y *7 day% E$e"y o"ganiBation
PAKISTAN ECONOMY
M.Rahim Ejaz
HASNAIN IRFAN COTTON AND GINNERS
in the cotton indut"y follo& the "ate fi0ed by the 1CGA% The buying and
elling #"oce of "a& cotton and bale of cotton i totally baed on 1CGA%
Pro+,"tion Pro"!ss of Ra) Cotton
Ra& cotton i #laced on the g"ound' fi"tly it -uality i chec!ed than
th"ough #i#e it end to the ginning machine% /ig fan a"e #laced that
#ull the "a& cotton f"om #i#e and th"o& it to #"oduction chambe"% In thi
chambe" "a& cotton i "efined and e#a"ated into cotton lint and cotton
eed% On the othe" ide out#ut a"e "ecei$ed% Then manually cotton lint i
con$e"ted into a bale of cotton% No& the #"oduction #"oce i com#leted
and bale of cotton a"e "eady fo" ale%
Pro+,"tion Pro"!ss of Cotton S!!+
In thi tage cotton eed i fu"the" #"oceed in the cotton eed
machine"y% Thi #lant e#a"ate "a& oil and oil ca!e in the #"oduction
#"oce% On one ide oil ca!e i collected and on the othe" ide "a& oil i
collected in la"ge bain% Thi Ra& oil i fu"the" #"oceed to con$e"t it
into it "efined fo"m%
P!a' Tim! of (,sin!ss
1ea! time of thei" buine i No$embe")Decembe" in lo&e" 1unAab and
Se#tembe")Octobe" in u##e" 1unAab%
#inan"ia& Information
O"ganiBation &a not &illing to ho& me thei" financial "e#o"t, balance
heet, income tatement and othe" info"mation becaue they belie$e
that it i confidential and cannot be ho&n to othe" than o"ganiBation>
#e"onal% Ho&e$e" they ga$e u light info"mation about thei" aet and
in$etment%
Ass!ts
Thei" total amount of aet a"e etimated *7 million to C, million% It
include land, building, office u##lie and machine"y%
In-!stm!nt
PAKISTAN ECONOMY
M.Rahim Ejaz
HASNAIN IRFAN COTTON AND GINNERS
Thei" in$etment in the buine i R% C, million fo" the cu""ent eaon%
In thi natu"e of buine ma0imum to ma0imum amount i not a
gua"anty of fulfilling the dei"ed "e-ui"ement% 5any o"ganiBation
bo""o&ed loan f"om the ban! and afte" the eaon they "etu"n the loan%
Profit an+ .oss In+i"ators
In thi natu"e of buine the"e a"e no #ecific indicato" fo" "ecogniBing
#"ofit and lo ituation% The only &ay to a$oid f"om the lo i to buy bet
-uality "a& cotton a #oible% The "eaon i the bet -uality cotton
#"oduce mo"e cotton lint afte" ginning, o it ea"n "e$enue mo"e and $ice
$e"a% In many cae o"ganiBation "ealiBe thei" financial #oition at the
end of yea"% It i difficult to dete"mine #"ofit and lo du"ing the "unning
eaon% O"ganiBation come to !no& thei" financial #oition at end of
eaon%

Em&oy!!s
The"e a"e 77 em#loyee &o"!ing in the o"ganiBation% In &hich *,
em#loyee a"e on #e"manent bai and "et a"e on tem#o"a"y and daily
&age bai%
Pro/&!ms
In thi indut"y o"ganiBation faced many #"oblem% It ha##en fo" many
time that o"ganiBation doe not get "a& cotton acco"ding to thei"
e0#ectation% Anothe" #"oblem i inc"eaing numbe" of cotton facto"ie in
the local a"ea% The amount of "a& cotton i not inc"eaing a com#a"ed to
inc"eaing numbe" of cotton facto"ie% In thi &ay they t"ied to natch
ha"e of each othe"% They t"ied to buy mo"e "a& cotton o they #ay mo"e
than the fi0 #"ice and thi i ala"ming ituation% Go$e"nment mut fi0 the
numbe" of cotton facto"ie in the #ecific local a"ea acco"ding to the
u##ly of "a& cotton% Anothe" #"oblem i that go$e"nment doe not #lay a
"ole a a econd buye"% ?i!e &heat, go$e"nment hould fi0 the
#u"chaing #"ice of "a& cotton and #lay a "ole a a econd buye"%
PAKISTAN ECONOMY
M.Rahim Ejaz
HASNAIN IRFAN COTTON AND GINNERS