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Outcome of activities intended by the association during the upcoming three years period

 
 
 
 

Outcome of activities intended by the association during the upcoming three years period

 
 
 
 
Plan & Activities

 

THREE YEAR PLAN OF ACTIVITIES

The Pakistan Denim Manufacturers & Exporters Association was incorporated as a company limited by guarantee not having share capital under certificate of incorporation bearing No. 12758/20060507 issued at Karachi on 31st May, 2006 under section 42 of the Companies Ordinance, 1984. The Association has been granted license No. 156 under the Trade Organizations Ordinance, 1961 by the Ministry of Commerce, Government of Pakistan. The association has also obtained a fresh license No. 049 under the Trade Organizations Ordinance, 2007 on July 08, 2008. The registered office of the Association is situated at 208-A, 2nd Floor, Clifton Centre, Clifton, Karachi. The Association is engaged in the encouragement of friendly feelings and unanimity amongst all the denim fabric manufacturing units.

Pakistan has become Denim Hub in the region in less than a decade and is considered as one of the leading suppliers of quality denim fabric to the world's known brands for the garments. The fancy denim in our country is second to none. The denim industry is contributing substantially towards exports, creating job opportunities and has invested about Rs. 40 billion in the denim sector. A medium size denim mill costs about Rs.3 billion. Exports of denim fabric and garments have reached US$ 1billion per annum during the last 10 years, a commendable performance of denim sector of Pakistan.

The three years future plan and activities of the Association are summarized as under:-

SHORT TERM:

  1. PDMEA has worked hard with the minister of Textile & Commerce in getting GSP+ status from EU allowing duty free export to 27 EU countries from 1st Jan 2014 till 1st Jan 2024. Before denim fabric was subject to 10-12% duty from EU countries.

  2. PDMEA is also taking up the matter through ministry of Commerce for Prefancial Trade Agreement (PTA) with Turkey with the inclusion of textile products which will automatically eliminate the local protective duties imposed @ 18% on export on denim fabric to Turkey, Iran & Pakistan.

  3. The Association is taken up the matter with the ministry of Finance & FBR for release of sales tax refunds of the denim exporters.

  4. PDMEA is taken up the matter with State Bank of Pakistan of reduction of export refinance mark-up.

  5. The Association is taken up the matter with FBR and FRB has reduced sales tax on local sale of the fabric from 5% to 3%.

  6. The Association had taken matter with the Ministry of Textile Industry to establish accredited testing laboratories in Karachi, Lahore and Faisalabad including Okotex certification facility for testing of denim fabric. The matter was considered by the ministry and the same has been announced in the textile policy. Reimbursement of the said certification has also been announced by the Government vide Letter # TDPA – 20 (108)/FAC/09 dated 09-10-2009. The Association is following-up the matter for proper implementation and payment of subsidy for certification fee as announced in Trade Policy 2009-14.

  7. With the tireless efforts of the Association through the Ministry of Commerce & Textile, Govt. of Pakistan, European Union has allowed duty free export to EU of 65 textile products including Ladies Denim Jeans with effect from 1-1-2013.

  8. The Association has taken up the matter with the High Court to obtain stay order for 17% increase in Gas tariff for Captive Power Generating units on account of being inefficient whereas actually our Captive Power units are operating on more than 60% efficiency.

  9. Our Association has taken up the matter with the Ministry of Petroleum and SSGC/SNGP to reduce Gas Infrastructure Development Cess from Rs.100 to Rs.50 per MMBTU for our industry.

  10. During the year under review, the Association assisted their number un resolving their issues with the Ministry of Finance, Commerce, State Bank, TDAP and FBR regarding payment of their claims and dues. PDMEA is acting as a bridge between the business community and the government functionaries.

  11. The Association has also taken up the matter to allow actual duty drawback to denim/fabric garment and pleased to inform that the revised enhanced duty drawback is already approved which is to be notified.

  12. To negotiate with the organizer of the International Trade Fairs to allocate good location at good rate to the Members of PDMEA for a better presentation display of their products at the international exhibitions. The TDAP has agreed to sponsor Trade Fairs at Tex World Paris.

  13. Formulation of proposal and recommendation for the National Budget and Trade Policy through Ministry of Commerce, Ministry of Textile and Central Board of Revenue. Most of the recommendations that the PDMEA has made are announced in last year budget 2013 and Trade Policy 2009-14.

  14. To share information with the members regarding defaulters/buyers and suppliers with particular emphasis on some foreign buyers who has black-mailing practice to get their high discount for the release of goods shipped to them.

  15. To attend queries on Customs, State Bank of Pakistan, Ministry of Textile and other concerned organizations regarding R&D claims of PDMEA.

  16. Association is following up the subsidiary scheme announced in Trade Policy for:
    - Research & Development Support Fund (R & D)
    - Drawback of Local Taxes & Levies
    - Export Finance Markup Subsidy
LONG TERM:
  1. Establishment of Research & Development Cell.

  2. To bench mark their product cost and the impact of incentive of denim fabric produced in Pakistan vis-à-vis competing countries. Working with M/s. Gherzi regarding conversion cost of denim fabric.

  3. Skill development / training programme and in-house and foreign training of the technical staff particularly in dying process in collaboration with suppliers of the denim plant and machinery.

  4. To include jeans trousers / bottom for duty free export to USA from ROZs in Pakistan to be announced by USA government shortly.

  5. Composition of delegations for visit to foreign countries to introduce our products.

  6. To establish Pakistan as the denim hub in South East Asia as the reliable source and suppliers of world class quality denim fabric to the buyers.
OVERALL SHORT TERM & LONG TERM PLAN
  1. To take up the matter with Ministry of Textile and Ministry of Finance to provide us level field by reducing mark up, ensure uninterrupted supply of gas and power, to continue R&D support, to improve supply chain to ensure good quality contaminated free cotton at competitive rates to the denim industry and to take up necessary measures for reducing cost of doing business in the denim sector which will not only increase the exports but would create new job opportunities through industrialization which has presently become standstill.

OUTCOME OF ACTIVITIES INTENDED BY THE ASSOCIATION DURING THE UPCOMING THREE YEARS PERIOD:
  1. As per study conducted by R&D Department of the Association that on successfully completion of Gherzi International Textile Perspective Plan of Denim Sector for Technology Upgradation recommended by Ministry of Textile Industry Government of Pakistan, not only the efficiency of the member mills will increase by 10% to 12% but also due to adhering international standards of quality to produce high quality products in order to fetch better unit price from the buyers. It will eventually increase the exports from 10% to 20% by next three (3) years.

  2. The Association is also considering bulk sourcing of raw material particularly dyes and chemicals in order to negotiate better prices. After getting duty free market access to EU, we anticipate an increase of US$210 million per annum of our exports of denim fabric.

SOURCE OF INCOME OF THE ASSOCIATION AND ITS UTILIZATION

The source of income of the Association shall largely depend on Membership, Annual Subscription Fee from Member Mills/Units and Sponsorship. The funds shall be utilized for promotion and attainment of objects of the Association.

ANNUAL PERFORMANCE REVIEW

  1. PDMEA on a regular basis taking up matter with the ministry of Petroleum for consistence supply of gas to the denim mills particularly in Punjab.

  2. PDMEA lauded government efforts in getting GSP+ status from EU for 10 years and hosted a dinner reception in honour of Governor Punjab Chaudhary Muhammad Sarwar for his contribution in this regard on 27th December 2013 at Pearl Continental Hotel Karachi.

  3. The Association has worked hard for implementation of subsidy scheme in Trade Policy 2009-14 and was also successful in getting allocation of funds from Ministry of Finance.

  4. The Association has arranged through TDAP participation of the denim member mills in local and international Trade Fairs & Exhibitions like EXPO Pakistan and TEXWORLD, Paris and New York.

    Date: 31st March, 2014

    Signature: ________________________________
    Name: Dr. Mirza Ikhtiar Baig
    Designation: Chairman

 
 

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