NEGLECT OF BMR

From the Foregoing brief account of the crisis and boom periods through
which the textile industry especially the spinning sector and the ancillary
textile industries passed, it is possible to deduce factors due to which the
mill owners neglected balancing, modernisation and replace ment
programme for their existing units as follows:
 Nationalisation policies of the GOP in the Seventies, reckless
expansion of the public sector at the cost of the private sector and
consequent closure of 28% of the installed capacity of spindles,
25% of rotor and large number of looms in the mi11 sector.
 Adoption of industrial friendly policies by the GOP, the Eighties,
abolition of the condition of “No Objection Certificates” (NC)C) for
expansion and setting up of new textile units and economic boom in
the inter national market. The mill owners concentrated on expansion
of the existing units and installation of new units apprehending that the
condition of NOC may be reimposed again by the GOP and the
economic boom may peter out BMR programmes for the old units
were neither prepared nor imple mented.
 Cotton crisis since 1992-93, slump and recession in the
international market since mid-Nineties, high mark-up rates, high
cost of electric power, high escalation in cotton prices, high cost of
stores and spares etc. which made spinning operations unviable
resulting in loan default by many spinning mills and clo sure of
about 2.0 million spindles by the end of 1998. In consequence of the
neglect of BMR of the existing units by the mill owners for about 30
years, the textile industry and especially the spinning and the power
loom sectors are burdened with preponderance of old and obsolete
machinery. This state of affairs has also been confirmed by world
renowned textile consultants as follows.
 In their report entitled. "Development of a market b a s e d s t r a t e g y
for the Pakistan textile and garment industry submitted in July
2000. Gherzi Textile Organisation of Switzerland of observed
that invest- ments in new manufacturing capacities have been
ins ufficient during the las t few years along the textile c h a i n .
Consequently, machine parts are becoming increasingly
obsolete.

 In their report on the textile industry of Pakistan submitted in

July, 2000 M/s. Coopers and Lybrands, Lahore observed that
investment have been mainly in the spinning sector and that
also for expansion and not for the modernisation of the
installed capacity. Consequently the textile industry of Pakistan
has lost its competitiv e edge in the international market.

 In their report covering almost all sectors of the textile

industry of Pakistan submitted to A P T M A in June, 2000, the
Italian experts Dr. Bandanelli and Ing. Fabio Lancerotto
observed as f ollo ws :

“ O n the basis of year of installation about 60 %

of spind l e s are older than 28 years and
therefore obsolete. The remaining 40% of
spindles are less than 15 years old. In
comparison the spindles installed in the Italian
textile mills a r e n o t m o r e t h a n 1 0 y e a r s o l d .
The most important problem facing the
t e x t i l e i n d u s t r y of P ak is ta n i s th e ol d a nd
o bs o le te p o w e r l o o m s ec to r o pe r a t i n g a b o u t
250,000 looms and producing approximately
90% of the total grey cloth. Becaus e of this
s ector Pakistan has acquired the reputation of
being a cheap cloth producer o f l o w q u a l i t y i n
 the international market”.

I n c o n c l u s i o n , i t i s p o i n t e d o u t t h a t n e g l e c t o r m o d e r n i sation of the
production Facilitie s by the textile industry in general and the spinning
sector in particula r was mainly on a c c o u n t o f f a c t o r s b e y o n d t h e c o n t r o l
of t h e m i l l o w n e r ’ s uptil the year 2000. It was mainly due to the
nationalisation policies of the Government of Pakistan in the
Seventies, cotton crisis and slump in the international market in the
Nineties.