Executive report is structured? The report is divided

Executive Summary

The
purpose of this report is to do a current SWOT analysis of Hosiery Industry of
Pakistan. This report aims to represent the current problems, opportunities,
weaknesses, strengths and threats to the industry. For this report we have taken
help from online resources, previous reports and interviewed business owners
and managers to get a more current insight on the currently prevailing
situation of this industry. This report is targeted toward business owners,
managers, industry professionals and other stake holders to provide them an
insight on current state of industry, reasons of its decline and what steps can
be taken to recover from this decline. This report also provides an
introduction and significance of hosiery exports to academia: students and
instructors so that they have a basic idea of job market in this industry and
the skills they should obtain if they intend to work for hosiery industry in
future. We are thankful to Mr. Salman Mir from R&D department SCCI and Mr.
Aneeb Ahmad CEO of Straps Intl. a firm exporting and providing local
manufacturers with patterned, logo and text based laces.

 

Table of Contents
Executive Summary. 1
Table of Contents. 2
Introduction. 3
What is the purpose of
this report?. 3
Who are the readers of
this report?. 3
What are the report’s
main messages?. 3
How this report is
structured?. 3
Hosiery Industry of
Pakistan. 4
SWOT Analysis. 5
Strengths. 5
Weaknesses. 5
Opportunities. 5
Threats. 5
Conclusion. 6
Recommendations. 7
References. 9
 

 

Introduction

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What is the purpose of this report?

This report is a part of ESP. This
is our final project report .The purpose of this report is to do a current SWOT
analysis of Hosiery Industry of Pakistan. This report aims to represent the current
problems, opportunities, weaknesses, strengths and threats to the industry

Who are the readers of this report?

The target audience of this report
is students and teachers related to business education, business owners,
managers, industry professionals and other stake holders.

What are the report’s main messages?

The report aims to provide an
insight into reasons of ongoing decline of hosiery exports. Which seem to be
the lack of R&D and Technology infrastructure.

How this report is structured?

The report is divided into three
parts, Introduction which consists of this page: the introduction of report,
executive summary: stating the purpose and need for this report, and finally
general introduction of the industry. The second part of this report is SWOT
analysis and the third part contains conclusions and recommendations for the
industry. The references to the sources used are at the end of this report.

 

Hosiery Industry of Pakistan

This
report aims to describe SWOT Analysis of hosiery industry of Pakistan. Hosiery
industry of Pakistan consists of manufacturing, sales and export of products
such as Shirts / T-Shirts, Hooded Jackets / blazers, Trouser, Knitted Bed
Sheets, Knitted Fabrics, Socks & other garments. The products are
manufactured with imported machinery and materials e.g. yarn.

Pakistan
Hosiery Manufacturers Association is the central body that represents the
stakeholders of the industry. The hosiery manufacturers are registered members
of this association. A list of all members can be found on the website of the
Association referenced at the end of this report. (Pakistan
Hosiery Manufacturers Association)

Pakistan Hosiery Manufacturers Association’s  central office is centrally located in ideal
surroundings at PHMA house off. Shahrah-e-fasial in P.E.C.H.S., block-6 just a
kilometer away from Export Promotion Bureau office. For year 2017-2018, Dr Khurram Anwar Khawaja was elected as new central chairman of Pakistan
Hosiery Manufacturers Association has elected while Shahid Rafi and Naeem Ahmed were elected as senior vice chairman and zonal chairman (North)  (The Nation)

 

 

SWOT Analysis

SWOT
is short for Strengths, Weaknesses, and Opportunities in Threats. In this
report we carry out the SWOT analysis of Hosiery industry of Pakistan and point
out the reasons that may contribute to its rise or decline.

Strengths

·        
Availability of
cheap labor

·        
Self-sufficiency
in availability of cotton based raw material

·        
Tax free export
promotion zones setup by government

Weaknesses

·        
Low R is
the biggest weakness which also leads to other weaknesses listed below

·        
Local
unavailability of plastic and polyester based raw materials

·        
Reliance on
imported machinery

·        
Lack of
trained, specialized skill labor

·        
High cost due
to lack of systematic production and administration

Opportunities

·        
Low barriers of
entry

·        
New Designs and
Materials

·        
Local Sales as
demand for hosiery products has increased locally

Threats

·        
Competition
from India, China, Bangladesh countries

·        
Diminishing
exports due to international economic slowdown

 

Conclusion

From the above analysis we have reached the
following conclusions:

The main reason of decline of hosiery
industry exports is foreign competition. China, India, Bangladesh and other
competing countries are able to produce better products at cheaper prices. They
can produce it at cheaper prices because they have spent resources on research
and development. These countries are producing their own machinery while in
Pakistan we are reliant on importing machinery from China. They have developed sophisticated
manufacturing processes by incorporating industrial engineers in the field so
they can produce products and introduce features that we can’t integrate in our
products without significant expenditure that small industry owners aren’t able
to afford. By achieving economies of scales these countries have reduced their
overall cost. Also strict standards regarding materials used and stringent
labor law standards set by brands, and foreign governments such as European
Union are hard to fulfill by small manufacturers here. Because many kinds of
materials is imported in lots, it is difficult for local manufacturers to
provide consistent quality.

The foreign competition has also worked on
their supply chain strategies. They are able to reduce cost and ensure high
quality standards.

Last but not least, there is two kinds of
competition going on here in this industry, first is the foreign competition
being faced by industry in Pakistan that has reduced profits and second the
local competition here is so fierce that profits margins are low to pennies per
unit. This reduces the overall export revenue and volume.

Due to lack of government incentives and
support, and unstable economic conditions, manufacturers avoid spending on any
technology or research and development due to high risk whether their
investment will reap reward or not and keep expenditure to a bare minimum, just
administration cost and expenses needed to keep manufacturing units running.

Recommendations

Our first recommendation for the betterment of hosiery
industry would be to to government. Government should provide incentives for
hosiery and textile industry in form of relief on tax and custom duties for
importing new machinery and technology. Government can also help the
manufacturers by setting up a research and development department specifically
for this industry so that it can benefit all instead of just a few wealthy
organizations bearing the cost of R and keeping the benefits to
themselves.

Manufacturers should keep themselves informed and updated
with latest standards required by their export markets and take steps to
incorporate them gradually so that they don’t have to spend resources suddenly
when their customers start to require these standards on a strict basis.

Government should make policies to ensure economic stability.
Economic stability can only be achieved if exports are less dependent on
imports for which government should promote manufacturers of materials and
machinery, to incorporate benefits from engineering into industry and make more
jobs for engineering grads. Academia stakeholders should make the criteria of
final projects such that they are practical and implementable in local
industry. This step can ensure a huge boost toward the technological setback in
all industries of Pakistan.

Another recommendation toward state bank would be to make
policies such that banks that provide services to businesses can give priority
based services as centralization of banks has led to a decline in quality of
services provided to businesses. As small branches can’t provide most business
services without authorization from headquarters which is a time consuming and
cumbersome process i.e. for getting approval of a business loan for a year, a
businessman is engaged negotiating with all the hierarchy levels located in
multiple branches for each step from lien to insurance to approval.

Last we’d like to appreciate the work of Chambers of
Commerce all over Pakistan but particularly Sialkot chamber of commerce for the
support the industry and the help provided by Mr. Salman Mir (R&D officer)
from Sialkot Chamber of commerce toward making the concepts about hosiery
industry’s current position in Pakistan clear to our project group.