Pakistan’s decision to ease COVID-19 restrictions early on paved the way for its textile sector to secure orders from international brands such as Hugo Boss, Guess?, Target and Hanesbrands.
According to a Bloomberg report, Pakistan’s outbound shipments recently grew at a faster pace than Bangladesh and India, with the textile sector leading the economic recovery. In September, the country saw shipments grow by 7% compared to India's 6% and Bangladesh's 3.5%.
Quoting an anonymous source, the publication said companies including Guess? Inc., Hugo Boss AG, Target Corp, and Hanesbrands Inc had turned to Islamabad after it reopened industries.
“Pakistan has seen orders shifting from multiple nations, including China, India and Bangladesh,” All Pakistan Textile Mills Association Secretary-General Shahid Sattar told Bloomberg. “Garment manufacturers are operating near-maximum capacity and many can’t take any orders for the next six months.”
Hugo Boss told Bloomberg it focuses on long-term supplier partnerships for “additional or new procurement channels” while Hanesbrands said it sources from many countries, including China and Pakistan, to supplement production from company-owned facilities.
When COVID-19 disrupted trade in India and Bangladesh in the months of April and May, Pakistan was making face masks and protective gear for export. The country also gained some orders from companies looking to diversify their supply chains amid the trade war between the US and China.
“This war between two giants has given us new opportunities in polyester-cotton products,” Nishat Mills Ltd’s Khalid Mehmood told Bloomberg. “So there is a six-month slot for Pakistan now to capture the maximum number of customers that were China-based.”
The publication reported executives from Nishat Mills and Interloop Ltd seeing orders being diverted from China to them, while Gadoon Textile Mills Ltd said it received orders redirected from Bangladesh and India.
The Chief Financial Officer at Gadoon said diversion of orders compensated for the orders they previously received from Europe and US.
Despite the early start, however, there are risks on the horizon that may impact Pakistan’s growth prospects.
“Despite a relatively rapid recovery of exports, following the ease of the lockdown imposed by the Covid-19 pandemic, a long-term view reveals stagnation,” Wolrd Bank senior economist Gonzalo Varela told Bloomberg.
“Pakistan needs an across the board tariff rationalization to encourage manufacturers to export and the nation to compete with other nations.”