Pakistan Textile Export Speed Up

Pakistan's largest textile exporter reported that after the European Union (EU) and the United States lifted the blockade, the country resumed and received new orders, mainly for socks and other products, but its denim part has not yet got rid of the pressure of new crown pneumonia.

"The ILP (interloop Limited) sock Division currently operates at more than 100% utilization, while the denim division operates at only 50% utilization," group chief financial officer Maqsood Muhammad told a BMA capital webinar

Interloop is a listed company on the Pakistan Stock Exchange (psx). It produces products for well-known brands such as Adidas and Nike. The denim division of the company was seriously affected by the new crown pneumonia outbreak, because the company once lost more than half of its orders. On the other hand, according to brokers, the sock sector lost 15% of its orders and was thus least affected.

Pakistan's exports are facing contraction due to the decline in international demand caused by the new crown pneumonia. However, after the gradual recovery of the European Union and the US economy, exports began to pick up again.

The main export revenue of interloop comes from the European Union (60%), and the rest mainly comes from the United States. The textile sector is Pakistan's largest export earner. According to the Statistics Bureau of Pakistan (PBS), the country's share of total exports (US $21.39 billion) in the fiscal year 2019-20 is about 60% (US $12.53 billion).

However, textile exports fell by 6% this year, mainly due to the outbreak of new crown pneumonia, compared with us $13.33 billion the previous year (fiscal year 19). With the exception of two sectors, almost all textile sectors reported a decline in exports.

According to the data of PBS, there was a glimmer of hope in June, with textile exports rebounding in recent June compared with the same period last year.

"Importers are diversifying their textile orders from China to the South Asian market, which provides a good opportunity for our exporters," said ILP group CFO He said the price of export products had not been affected and the company had not yet passed on the benefits of the depreciation of the rupee to the importer. However, buyers are asking for the same. "In addition to the depreciation of the rupee, higher sales and lower yarn prices are likely to keep profits up," he said

"The company has received orders from three new customers for the sock department and is also trying to attract new customers into its Denim Market, one of the good brands is to place orders at attractive prices," the report quoted the company's chief financial officer as saying

ILP's Denim business is currently at a loss, but is expected to start contributing to profits from next year, according to the brokerage.

Interloop is one of the world's largest knitwear manufacturers and the sixth largest exporter of Pakistan. The company has two manufacturing units in Pakistan and Bangladesh, a subsidiary in Sri Lanka and services in the United States, the Netherlands, China and Japan. Annual production of 700 million pairs of socks, accounting for more than 90% of the total revenue. According to brokers, other notable industries include yarn, denim and knitwear.