Pakistan’s footwear sector demands incentives
LAHORE: The footwear industry of Pakistan is looking for space to strengthen its footprint in global markets to grab a greater share of exports from its competitors.
Their demand is increasing, especially after the establishment of the Italy-Pakistan Footwear Technological Centre last year.
Greater access to technology, which the industry under the Pakistan Footwear Manufacturers Association (PFMA) banner has attained, is one of the primary reasons why the stakeholders are now urging the government to formulate a policy for this industry.
According to PFMA, there are about 80,000 plus shoemaking factories in Pakistan. However, the country only has 10 mechanized medium units, which produce more than 5,000 pairs per day.
There are 150 mechanised small units, producing 2,000-5,000 pairs per day and 5000 semi-mechanized units producing up to 2,000 pairs per day. The rest of the manufacturers, around 75,000, come under the cottage industry, which highlights the need for mechanization in this industry to increase production volumes. These figures suggest that 20% of the footwear industry is operating under the organized sector in Pakistan. The cottage industry caters to the domestic demand, whereas the organized industry can explore global markets.
According to APICCAPS:
PFMA stated That currently, Pakistan is producing 411 million pairs of shoes and is consuming the same quantity. Currently, 24 million pairs of shoes are being imported every year. In comparison, 11 million pairs are exported to leading European countries. a Portugal-based association, Pakistan ranks at number seven in footwear-producing countries globally. Pakistan is currently exporting 2.6% of its production and has a share of only 0.1% in the global footwear export market, which currently stands at $142 billion.
Since Pakistan is one of the biggest leather-producing countries globally, the sector believes that this could be a source of inspiration to boost quality. Footwear productions for both local and export markets; nevertheless, it cannot be done without government consent.
PFMA said:
That the industry requires government support in many aspects. For instance, formulating footwear policy to promote SMEs and creating employment opportunities. Financial support to conduct exhibitions for local manufacturers. SMEs to extend their market and recognition at local and international levels.
There is also a need for improvement and development of skills. This may be done through courses and training of the labour and designers.
Moreover, the footwear industry needs recognition as an independent sector. High cost in footwear production is a major hindrance for manufacturers and the products to generate more revenues.
It also makes products less competitive in the global market; hence the federal government needs to intervene.
The local footwear body added that customs and regulatory duty on importing raw materials. For the production of shoes should be reduced.
Moreover, withdrawal of additional customs duties on imported raw materials used in the production. The export-oriented products by this industry would be an accommodating step.
PFMA stated that other supportive decisions by the government could be related to a special discount on electricity. Zero sales tax on the purchase of footwear machinery, along with an export rebate enhancement facility.
“These steps would eventually boost footwear exports and generate more foreign exchange for Pakistan; it will create a win-win situation by creating more employment opportunities. For locals and increase the industry’s share in global footwear export markets,” PFMA added.
