Industry.docx

INDUSTRY DEFINITION: Industry is the work and processes involved in collecting raw materials, and making them into products in factories. INTRODUCTION: Manufacturing is the fabricating of primary material into more useful products with the use of machines rather than merely tools and machines driven by power other than the power of human or animal muscles on a fairy large scale. Today the industrial development is essential for the rapid economic growth of a country. The countries that solely relied on agriculture have remained poor and under developed. Due to the industrial development overall economic development increases, GDP increases, per capita income increases and employment increases. In the field of industry Pakistan at the time of independence started almost from the scratch, very weak and meager conditions. Pakistan inherited only 34 small industrial units out of total 991 in the sub-continent. These largely pertained to cotton textile sugar, cigarettes, rice husking cotton ginning and flour milling. These together contributing only7, percent of GNP and employed over only 26000 persons in the country.

INDUSTRY OF PAKISTAN

Pakistan ranked as number 43-44 among the countries of the world in nominal GDP, 26th in GDP with purchasing power parity and number 55 in the world in factory output. Pakistan's industrial sector accounts for about 24% of GDP. Cotton textile production and apparel manufacturing are Pakistan's largest industries, accounting for about 66% of the merchandise exports and almost 40% of the employed labor force. Cotton and cotton-based products account for 61% of export earnings of Pakistan. The consumption of cotton increased by 5.7% over the past five years while the economic growth rate was 7%. By 2010 the spinning capacity increased to 15 million spindles and textile exports hit $15.5 billion. Other major industries include cement, fertilizer, edible oil, sugar, steel, tobacco, chemicals, machinery and food processing. The government is privatizing large-scale parasternal units, and the public sector accounts for a shrinking proportion of industrial output, while growth in overall industrial output (including the private sector) has accelerated. Government policies aim to diversify the country's industrial base and bolster export industries.

TEXTILE INDUSTORY OF PAKISTAN Textile sector of Pakistan plays a pivotal role in the country’s economy – its significance stemming mainly from its very large cotton production capacity. The country currently ranks as the 4th largest producer of cotton in the world and has duly capitalized on this capability by developing and promoting its textile sector. As a result, Pakistan now also has the third largest spinning capacity in all of Asia. The importance of the textile sector as an integral part of Pakistan’s economy is highlighted by the following facts: - It provides employment to over 40% of industrial labor force - It contributes 8.5% to GDP - It accounts for 40% of banking credit - It holds approximately 60% share in national exports

Pakistan is a sub-tropical country with mean temperature on the higher side which makes cotton an ideal clothing material for the prevalent climate. Owing to the ample supply of cotton, Pakistan has an innate opportunity to capitalize on this resource endowment as the fourth largest producer of the commodity. The country has the third largest spinning capacity which establishes a strong foothold for further value addition in the sector.

Minimal and low value-added products dominate exports, constituting over 50% of the exported value. Cotton cloth, cotton yarn, bed sheets and knitwear remain major export generators. Over the last five years, the composition has not undergone any major change except minimal improvement in the share of readymade garments at 18% in FY16 compared to 13% in FY11, leaving significant upside potential untapped.

History of Textile Industry in Pakistan The origin of the Indian textiles is thought to be the Indus Valley civilization, situated in modern Pakistan, where people used homespun cotton to weave garments. Historically, the Indus valley region engaged in significant trade with the rest of the world. The silk from the region, for example, is known to have been popular in Rome, Egypt, Britain, and Indonesia. In the 1950s, textile manufacturing emerged as a central part of Pakistan's industrialization, shortly following independence from the British rule in the South Asia. In 1974, the Pakistan government established the Cotton Export Corporation of Pakistan (CEC). The CEC served as a barrier to private manufacturers from participating in international trade. However, in the late 1980s, the role of the CEC diminished and by 1988-89, private manufacturers were able to buy cotton from ginners and sell in both domestic and foreign markets. Between 1947 and 2000, the number of textile mills in Pakistan

increased from 3 to 600. In the same time period, spindles increased from 177,000 to 805 million. Distribution Location of Cotton Textile Industry After independence (1947) of Pakistan, first cotton textile mill named Valika Cotton Textile Mill was established at Karachi in 1948. After establishment of first mill, it emerged as the largest cotton textile center of Pakistan this was, because all economic, social, infrastructural, export, and import factors, except raw material were localized in Karachi. Although, to take advantage of the nearness of raw cotton and market and in pursuance of government policy, new textile centers have been developed in Pakistan. However, Karachi continues to be the largest center. After Karachi, there was shift to up country centers within the cotton belt. Faisalabad is now second largest cotton textile manufacturing center in Pakistan. It has advantage of raw cotton availability labor force and local market facilities and in course of time and excellent infrastructure facilities has been built up. Hyderabad is third largest cotton textile manufacturing center in Pakistan. It is within the cotton belt and enjoys easily accessible local market and it is not very for from the port and economic capital (Karachi) of Pakistan. Apart from these big cotton textile manufacturing cities, cotton mills have been established in almost all cities of Pakistan, especially cotton growing areas to tape the raw material and to serve the local market and to develop infrastructure in backward areas to attract investment for other industries. Besides, textile mills, power looms (non-mill weaving) have made remarkable progress and our more than 80% cloth production conies from power looms. Power looms are thus playing a vital role in the cotton textile industry of Pakistan. They deserve full encouragement and are located almost in every city of Pakistan. Towels, Hosiery and Canvas are important products of power looms. The power looms are manufacturing a large variety of these products. This industry is also located at Karachi, Multan, Hyderabad, Faisalabad, Lahore, Jhang, and many other cities.

MINING INDUSTRY Mining is an important industry in Pakistan. Pakistan has deposits of several minerals including coal, copper, gold, chromite, mineral salt, bauxite and several other minerals. There are also a variety of precious and semi-precious minerals that are also mined. These include peridot, aquamarine, topaz, ruby, emerald, rare-earth minerals bastnaesite and xenotime, sphene, tourmaline, and

many varieties and types of quartz. The Pakistan Mineral Development Corporation is the responsible authority for the support and development of the mining industry. Gemstones Corporation of Pakistan looks after the interests of stake holders in gemstone mining and polishing as an official entity. Baluchistan province is the richest in mineral resources available in Pakistan. While recently Sindh discovered coal deposits in Thar. Khyber Pakhtoonkhwa is rich in gems. Most of the mineral gems found in Pakistan exist here. Apart from oil, gas and some mineral used in nuclear energy purposes which comes directly under federal control mining of other minerals is provincial issue. Currently around 52 minerals, are mined and processed in Pakistan. Khewara Salt Mines are the world’s 2nd largest salt mines.

INDUSTRIAL BACKWARDNESS IN PAKISTAN INTRODUCTION: Although Government of Pakistan since 1947 is trying hard to develop industries and infrastructure facilities for the growth of industrial sectors, yet it has not achieved success to the desired extent. In the last three decades the contribution of industrial sector to GDP is only 7.1 percent which by any standard is not satisfactory, while during 2015-16 it becomes 13.2 percent.

The causes of industrial backwardness in Pakistan are varied and complex. The main obstacles are:    

Historical causes Economic causes Political causes Social and Geographical causes.

Historical causes The industrial revolution in Europe introduced power loams for textile production. The British collected raw material for their industries from the subcontinent and they captured the market for their products in the sub-continent and started establishing industries in this area. The Muslim majority areas were kept backward deliberately to favor the Hindus. The few industries which were set up in India were allocated at the coastal cities of Kolkata, Chennai, and Mumbai which were far away from Pakistan’s territory. Economic Causes  Lack of capital Lack of capital is one of the major hurdle of industrialization of heavy industries in Pakistan.  Lack of infrastructure The transport and communication are not well established in Pakistan, to faster the mobility of labor capital raw material and energy resources. Gas and electricity are short of requirement.  Lack of foreign exchange Pakistan imports industrial machinery and industrial raw material from abroad, which requires heavy foreign exchange. But Pakistan lacks in foreign exchange due to debut trade.  Small size of internal market Pakistan 63 percent population lives in rural areas and their earning and savings are very limited. Their purchasing power is very small. So this is also a great hurdle for development and expansion of industrial sector. The consumption of industrial products are very small.  Lack of energy resources The frequent breakdown of electricity is adversely affecting the industrial production in the country.

Political causes  Unstable political system The political system of Pakistan has remained unstable since partition. Frequent changes in the government have been taking place until now. Due to this the investors remain hesitate to invest in industrial sector.  Kashmir issue Due to Kashmir issue Pakistan has faced two main wars with India. There for Pakistan has forced to invest for arms and ammunition. Due to this the public sector cannot make any heavy investment in industrial sector. Social and Geographical issues  Lack of education The capital intensive industries requires technical and professional Knowledge along with trained and skilled labor for better and sophisticated products while our labor is still untrained.  Labor problems The laborers in Pakistan create problems in the production process through strikes and force to close down the factories.  Climate and weather The climate and weather conditions are very harsh in Pakistan. Uncertain heavy rains floods drought and heat waves are also main hurdles in industrial development.