LAHORE, Pakistan — The textile industry here is primed to benefit in the new year from the Generalized System of Preferences Plus status granted to Pakistan by the European Union this month.
The deal gives 3,500 Pakistani products duty-free or preferential rate status for exports to the European market for three years beginning Wednesday, although it still faces competition from Asian neighbors.
The benefit covers 90 percent of Pakistan’s exports to 27 countries of the EU, with 67 percent of the products textile-related. The GSP Plus status will allow almost 20 percent of Pakistani exports to enter the EU market at zero tariff and 70 percent at low preferential rates. Pakistani textile exports to the EU now attract an average 11 percent duty. Apparel products from Pakistan, including denim jeans and knitwear, will enjoy a savings of 9.6 percent.
GSP Plus status was conditional to ratification and implementation of 27 conventions on human and labor rights; governance issues such as terrorism, narcotics and money laundering, and development issues like environmental concerns. Pakistan has ratified these conventions and falls under the EU’s stipulation that countries having a vulnerable trade profile benefit from this plan. It is reported that 50,000 Pakistanis have died in the 12-year war on terror. Finance Minister Ishaq Dar has put the financial cost to the nation at $100 billion.
“Every $1 billion of extra textile exports will create 100,000 jobs for the workforce,” said Chief Minister Punjab Shahbaz Sharif.
According to Pakistan Readymade Garments Association estimates, the increase in Pakistan’s textile exports will be $580 million to $700 million in the first year, with knitted and woven apparel to increase $280 million in the same period.
Mills are utilizing and converting idle capacities in anticipation of the added business opportunity. Bashir Ali Mohammad, chairman of one of the country’s largest composite mills, Gul Ahmed, based in Karachi, said that the capacity of woven apparel mills such as Gul Ahmed is already booked six months ahead.
Last year, Nishat Mills, another large composite mill, converted a home textile unit to woven apparel manufacturing.
Shahid Butt, director of Shahkam Industries, a Lahore knitwear mill producing 75,000 dozen garments monthly, said, “Mills will have to expand to cash in on this opportunity.”
The escalating cost of energy is another issue. “The price of gas has just been raised by 30 percent, and our electricity bill has also gone up this year,” he said.
Ijaz Nabi, adviser to the Punjab Chief Minister, said the government is going to fulfill the industry’s requirements by providing infrastructure support to maximize the benefits from GSP Plus status and ease constraints. Sharif said that Garment City, being developed on the outskirts of Lahore, will benefit small and medium-size enterprises, provide training programs for textile workers, expedite Customs procedures for the import of raw materials and provide other measures to help the textile and garment industry.
“Shahkam’s EU export is 10 percent currently, but I envision it increasing to more than 20 percent in the next three years,” he said. “Since the Europeans will save duty, they will offer us a better price, giving mills options. The price for U.S. importers will increase.”
Nabi said the enhanced trade status will help Pakistan better compete with countries in the region such as China, Bangladesh, Sri Lanka and India.
“Importers go to Bangladesh for the lower price. With GSP Plus, European importers will be diverted to Pakistan for a better garment product, such as finished denim, fancier knits, washes, prints and embroideries, and heavier knits like terry and fleece, as the price offered by the two countries will be closely matched,” said Azfar Hasan, president of Matrix Sourcing in Lahore, which also sources out of Bangladesh for major international brands.
Another advantage is lead time. Since Pakistan uses local fabric for apparel, it cuts lead time to only 45 days, versus 90 to 120 days in Bangladesh, where fabric is imported, said Hasan.
“Increased EU business will refresh the Pakistan industry,” Hasan said.
Utilizing idle capacity will absorb mill overheads, so product price and availability will remain the same for U.S. importers. Expansion of mills next year should bring product prices down for all importers. Moreover, mills will gain know-how by making better and more fashion-forward European products, which they can also supply to U.S. importers.
@fearofgod and @maxfieldla have teamed up on a pop-up installation. The store, located in the gallery space across from Maxfield’s Melrose Ave location, is the site of the brand’s House of God pop-up in which Fear of God founder @jerrylorenzo has created a church-inspired installation. A dozen vintage church pews sit in front of an LED screen playing 90s gospel singers in an effort to re-create an environment akin to a Southern Baptist Church, Lorenzo explained. Read more about the pop-up on WWD.com #wwdfashion (📷: Jennifer Johnson)
Known for his sleek, sophisticated American glamour, Norman Norell is the subject of an upcoming exhibition at @fitnyc. “Norell: Dean of American Fashion,” which runs from February 9 through April 14, will feature approximately 100 ensembles and accessories. His best work is exemplified by the designer’s glittering “mermaid” gowns frosted with thousands of hand-sewn sequins – like the one pictured. (📷: William Helburn) #wwdfashion
For pre-fall 2018, @balmain didn’t let go of the glitz. A crystal embroidered baseball jacket priced at around $40,000 hangs in the “couture” section of the brand’s first men’s pre-collection. Sporting the words “Balmain Army” across the back, the item took around two months to make. “When it was completed, it was like Christmas, it was like, ‘It’s done, it’s exactly what I wanted,’” said Balmain’s creative director @olivier_rousteing during a tour of the collection in a Paris showroom on Monday. #wwdfashion
Eighty degree temperatures and outdoor installations at the annual Art Basel Miami Beach called for bright, elevated beachwear. See more street style pictures on WWD.com. #theyarewearing #ABMB (📷: @lifeinreverie)
Following September’s emotional tribute to her brother Gianni, Donatella Versace wanted to bring the spring show’s deep sense of intimacy to her @versace_official pre-fall collection. Donatella found inspiration in Versace Palazzo in Milan and from Gianni’s opulent apartment. Archival patterns and new motifs were splashed on silk shirtdresses and fitted jersey frocks. See the rest of the photos on WWD.com. #wwdfashion
Demna Gvasalia continues to shake up the Paris fashion calendar — and experiment with new runway timetables for his @vetements_official brand. WWD has learned that Vetements plans to stage its next coed show for the fall 2018 season on January 19 during Men’s Fashion Week in the French capital. Details about the timing and venue have not been confirmed — stay tuned on WWD.com to catch the latest. #wwdnews (📷: @giovanni_giannoni_photo)
@zacposen's go-to holiday gift? Cookies! "I'll usually bake cookies and send them as a gift," said the designer, who recently released his cookbook "Cooking With Zac: Recipes from Rustic to Refined." Get the recipe for his Brown Butter-Chocolate Chip Cookies via link in bio 🍪🍪🍪 #wwdeye #cookingwithzac
For @monsemaison’s pre-fall 2018 collection, Fernando Garcia and Laura Kim honed in on the brand’s many signatures — men’s wear, which was tweaked and feminized through deconstruction, proportion play and lots of bare shoulders. See the rest of the photos on WWD.com #wwdfashion (📷: George Chinese)
On Friday night, @yohjiyamamotoofficial received the Design for Asia Lifetime Achievement Award in Hong Kong. The 75-year-old designer has been celebrated for many years and is best known for his dark and avant-garde tailoring. “In my long career, in design, architecture, [I’ve been to] so many parties, this is the very first time that I have such a warm feeling, I really appreciate this,” Yamamoto said. #wwdfashion (📷: @dominiquemaitre)