Footwear industry can boost exports to $ 1 billion by 2027: PFMA chief – Business & Finance
LAHORE: The Pakistani shoe industry is in a position to increase its exports to $ 1 billion by 2027, said Zahid Hussain, president of the Pakistan Shoe Manufacturers Association (PFMA).
He said that a real-proportion exchange rate would be helpful in reaching the target of $ 1 billion by 2027. He pointed out that industry was probably the only sector to have significantly reduced its share of imports in the country. over the past three years.
In an interview with Business Recorder, Hussain pointed out that the sector’s domestic production has grown by 50% over the past three years, mainly due to import substitution.
He pointed out that footwear imports fell to just 1.6 million pairs, from 26 million pairs four years ago.
“The goal of exports worth $ 1 billion is not uncontrollable and is quite feasible, given the growth of the footwear industry in recent years,” he said.
“We hope to achieve this goal by 2027, adding more export markets like China,” he said.
The industry’s exports are currently around $ 130 million (16 million pairs) and its main markets are the United States, United Kingdom, European Union and Australia. Due to the increasing demand in global markets, “we are considering the Asia-Pacific market and will probably start exporting to China by 2025,” he said. âPakistan currently manufactures around 300 million pairs per year. Hussain revealed that some large groups were setting up new manufacturing units to export their products.
The government has realized the potential of the footwear sector and provided incentives by reducing import duties on nearly 40 raw materials and intermediate goods, he said.
“The ‘Make-in-Pakistan’ policy has started to show results,” he said. Giving an example, Hussain said the smartphone and footwear sectors have reduced their imports due to domestic manufacturing.
âTheir exports have also started to increase,â he said.
âWe have everything in our supply chain, including the workforce,â he said, adding that raw materials were the only area where the industry needed government support.
âThe government has responded positively and Pakistani manufacturers are increasing their exports,â he said. The reduction in import tariffs enabled importers of raw materials to effectively establish their supply chains, which supported import substitution over the next three to four years, he explained.
âThe shift has now turned to manufacturing in Pakistan. Speaking of the past, Hussain lamented that the industry has missed out on some opportunities in the past as the sector has not been able to align with previous governments on issues related to exports. âThings are on a different track now. Still, there were some issues that needed to be resolved, he added. Hussain argued that the government should give valid reasons before imposing certain taxes.
The government wants to collect taxes which “are now more than the income of a business”. âIt can’t work,â he exclaimed. “If the government wants to collect taxes aggressively, then it must show that it is better or equal in terms of competitiveness with the countries of the region,” he stressed.
Zahid said that the footwear manufacturing industry is one of the old and major industries in Pakistan which produces high quality finished products and has great potential for growth. Pakistan exports footwear to more than 60 countries on the five continents of the world. Pakistani footwear exports have registered a high growth rate in recent years.
Footwear segment revenue is expected to reach 358 million US $ in 2021. The revenue is expected to show an annual growth rate (CAGR 2021-2025) of 6.7%, which will translate into a projected market volume of 464 million of US dollars by 2025. User penetration will be 9.7% in 2021 and is expected to reach 14.0% by 2025.
However, with annual exports of just $ 110 million, Pakistan’s share in world footwear exports is only 0.001 percent. All the other countries in the region export much more. These include India, Bangladesh and Sri Lanka.
Speaking of the association, Zahid said that since its establishment in 1983, PFMA has been an association dedicated to promoting and enhancing the growth and development of the footwear industry in Pakistan. He also said that the main objective of the association is to facilitate liaison between association members and government bodies to improve productivity and skills development.
Copyright Business Recorder, 2021