By  on February 5, 2008

LAHORE, Pakistan — Pakistani mills, operating in a country in crisis, are trying to convey a sense of stability to foreign buyers.

The mills are emphasizing their ability to maintain competitive prices and timely delivery, even if it means manufacturing in facilities they own outside Pakistan.

Although violence and strikes have subsided since the assassination of opposition political leader Benazir Bhutto last month, more unrest is expected leading up to the Feb. 18 general elections. The mills have been able to fulfill most orders, but there have been labor shortages and production disruptions, and meetings with foreign buyers have had to shift outside the country because of security concerns.

"We think the political situation in the country is going to have a greater long-term than short-term effect," said Imran Iqbal, general marketing manager for Active Apparel International here.

Active Apparel produces knit tops and bottoms for retailers and brands such as Sears, J.C. Penney, Nautica and Modern Culture. From now through mid-February, U.S. importers will confirm orders for the fall season, the biggest buying period that includes back-to-school, Iqbal said.

"We expect them to confirm 80 to 90 percent of their order projections as it is too late in the day for them to change all their orders, despite any nervousness they may feel at the moment confirming their orders with Pakistani mills," he said. "Since more turmoil is expected around election time, U.S. importers will also be nervous that we will not be able to deliver the goods in time. Also, even though buyers that have been working with us for 10 to 15 years feel it is secure enough for them to visit, their travel insurance becomes prohibitively high due to the security concerns."

That's why the company seeks to maintain competitive prices and a quality product, he said. The company has factories in Jordan, Egypt and Dubai, so if there is a problem in Pakistan that prohibits manufacturing or shipping goods, "we will take the entire responsibility of timely delivery of goods and get them produced in any of our other factories abroad," Iqbal said.

The power and gas shortages in Lahore will be over by the end of this month and all the bigger mills have their own power generation capacity for backup, he said.At Karachi-based J&M Clothing Co., which works with companies such as J.C. Penney, Calvin Klein and Aéropostale, marketing manager Zafar Iqbal (no relation to Imran Iqbal) said the firm specializes in trendy styles like multipocket cargo pants, dresses and blazers. These are mostly in cotton, twill, canvas, satins and dobbys, with different textures, such as herringbone.

J&M Clothing has three factories in the Karachi Export Processing Zone, but, he said, "employees still have to travel through the city to access the zone." Three more plants are in the Korangi industrial area of Karachi. Like Active Apparel, J&M also has factories located abroad, one in the Export Processing Zone in Dubai and three in Colombo, Sri Lanka.

"Our mill has a 15-day cushion, which we use up under such circumstances, so that clients don't get affected by any production problems we face here," he said. "We have a 90-day lead for products made of local fabric and a 120-day lead time for products that are made of imported, mostly Chinese, fabric. In this way, we are struggling, but managing to cope. In the last six weeks, one negative impact has been the beginning of the season meetings we have with our clients. They have refused to meet us here, so we have had to schedule these meetings in Bangladesh, India and Dubai."

Syed Imtiaz Abbas, general manager of finance at Artistic Apparel in Karachi, which produces denim garments for U.S. brands such as Levi's and Nitex, said to some extent the violence and strikes after Bhutto's assassination have stopped.

"Naturally, time targets have been affected, but we are managing," Abbas said. "We have kept our clients in the loop and are continually keeping them informed. This has been an unusual situation. Our clients understand that and are cooperating with us."

Najeeb Malik, managing director of Master Textiles in Lahore, said, "The port was closed for three days earlier and delays were only for a couple of days. Things have now gone back to normal. Our main problem is that clients don't want to visit due to security concerns."Active Apparel's Iqbal said, "There have been closures of many economically inviable knitwear mills in Pakistan in the recent past, but the big export houses, the serious businesses, have the financial muscle allowing them to wait for the good times. We are biding our time. In the meanwhile, we offer attractive prices and backup plans to guarantee timely delivery."

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