The year 2013 was a blessing for Pakistan’s textile industry, especially for the spinners. The country’s spinners made the most out of their competitiveness over India, courtesy good production of short staple fibre. Din Textile Mills, a part of the Din Group, is on cloud nine with double-digit growth in turnover and profits despite the factors like high inflation and power outages hitting country’s industrial performance.
The company recorded a growth of 74 per cent in Profit after Tax during the first quarter ended September 30, 2013 at Rs 129.71 million versus Rs 74.63 million in the corresponding quarter of previous fiscal. Sales also improved 17 per cent to Rs 2,237.6 million from Rs 1,910.32 million in the year ago period.
Factors which contributed to the company’s success also include rupee depreciation and the monsoon which did little damage to the standing cotton crop in Sindh and Punjab.
However, the road ahead looks tough for the spinners like Din Textiles amid uncertainty over China’s cotton procurement policy which has so far prompted Chinese mills to buy large amounts of cotton and yarn from countries like Pakistan. Chinese import of cotton yarn doubled between 2008 and 2011. In 2013 too, through the month of August, Chinese mills had imported 1.37 million tons of yarn and that demand also looked set to increase further.
But now, with the rising possibility of China selling off some of its cotton stockpiles, the dark clouds have emerged over sustainability of growth momentum recorded by Pakistan’s spinners in past year. Recently released November export numbers support this speculation as it showed yarn dispatches fell sharply by 22.8 percent month on month. Pakistani spinners, who had the best of the time with Chinese cotton procurement policy, are now most vulnerable also to the same policy.
