Lahore: The Footwear industry of Pakistan is looking for a space where it can intensify their foot prints in global markets to grab greater share of exports from its competitors.
Their urge is growing, especially after the establishment of Italy-Pakistan Footwear Technological Center last year. The greater access of technology, which the industry under the banner of Pakistan Footwear Manufacturers Association has attained, is one of the primary reasons why the stake holders are now asking the government to formulate a policy for this important and ancient industry.
As per PFMA, there are about 80,000 plus shoe making factories in Pakistan. However, the country has only 10 mechanized medium units, which produces more than 5000 pairs per day. Apart of that there are 150 mechanized small units, producing 2000-5000 pairs per day and 5000 semi mechanized units which are producing up to 2000 pairs per day.
Rest of manufacturers i.e. 75,000, came under the cottage industry, which shows a huge need of mechanization in this industry to increase production volumes.
These figures suggested that merely 20% footwear industry is operating under the organized sector in Pakistan. The cottage industry caters the domestic demand whereas organized industry has the potential to explore global markets. PFMA said that currently Pakistan is producing 411 million pairs and is consuming the same quantity.
Currently 24 million pairs of shoes are being imported every year while 11 million pairs are being exported to leading European countries.
AS per APICCAPS, a Portugal base association, Pakistan was ranked at number 7 in footwear producing countries in the word. Pakistan is currently exporting 2.6% of its production and has a share of only 0.1% in global footwear export market which currently stands at $142 billion.
Since Pakistan is one of the biggest leather producing country in the world, the sector believes that this could be a source of inspiration to further boost the quality footwear productions for both local and export markets, nevertheless it now cannot be done without governments consent.
PFMA said that the industry requires government support in many aspects. For instance, formulating footwear policy to promote SME’s and create employment opportunities. Financial support to conduct exhibitions for local manufacturers and SME’s with the purpose of extending their market and recognition at local and international level. Improvement and development of skills which may be done through courses and trainings for the labor and designers.
Moreover, the footwear industry needs recognition as an independent sector. High cost in footwear production is a major hindrance for manufacturers and also for the products to generate more revenues.
It also makes products less competitive in the global markets, therefore the federal government needs to intervene.
PFMA said that the customs and regulatory duty on import of raw materials for production of shoes should be reduced. Also withdrawal of additional custom duties on imported raw materials used in production of export oriented products by this industry would be a very accommodating step.
PFMA said that other supportive decisions by the government could be on providing a special discount on electricity, zero sales tax on purchase of footwear machinery along with an export rebate enhancement facility.
These steps would eventually boost up footwear exports and generate more foreign exchange for Pakistan, it will create a win-win situation by creating more employment opportunities for locals and an increase in the industry’s share in global footwear export markets, PFMA added.