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Saif Textile Mills achieves 19.77% growth in the turnover
07 May '08
4 min read
The entire domestic manufacturing sector, not just the textile sector is heading towards a downturn. The primary driver of this downturn is the escalating cost of borrowing, which is fuelled by the inability of the government to reduce the fiscal deficit.
Unfortunately, so long as the government fails to curtail its own expenditure and the consequent inflation, the State Bank will continue to impose a restrictive monetary policy.
If the government fails to arrest this trend, the result could be crippling for the textile manufacturing industry.
The electricity deficit is also at an all time high, resulting in frequent power shutdowns causing lower efficiencies and machinery breakdowns.
These occur during peak as well as off-peak hours. Increasingly, the supply of natural gas to industrial units is also prone to shutdowns especially in the winter season.
The result is that even gas fueled captive power plants cannot provide the standby economic benefits that they were installed for.
At the same time, the 33% rise in electricity tariff, followed by a 20% hike in the petroleum prices are causing rapid erosion in Pakistan's cost competitiveness.
There is strong expectation that the ocean freight will also be increased by US $ 600 per container in coming future. Saif Textile Mills Limited Third Quarterly Report 2007-2008.
This operationally challenging environment has come at the same time as the energy crisis, and has had a telling effect on the operating cost and efficiency of the textiles manufacturing sector.
This sector is in crisis and requires support from the regulatory authorities in helping it to regain cost effectiveness and international market share.
Instead, the government has increased the mandatory minimum wage at a time when the textiles manufacturing sector is determined to control costs in order to survive in these difficult times.
Prices of cotton have also risen unjustifiably considering that the quality of the crop is below par. With an estimated shortage of 2 million bales, it is likely that cotton prices will continue to rise without any commensurate increase in the quality of the bales.
In this operating environment, the mission facing your Company's management is an extremely challenging one. Our goal is to operate in a dedicated and efficient manner as much as possible and by doing so, to minimize the adverse impact of the depressed market and economic conditions.
In the absence of any positive change in government economic policies & developments during the next quarter, our operating results are unlikely to improve beyond their current levels.
The Board places on record its appreciation for the support of our bankers and our valued customers. We would also like to highlight the hard work put in by the members of our corporate family.
Unfortunately, so long as the government fails to curtail its own expenditure and the consequent inflation, the State Bank will continue to impose a restrictive monetary policy.
If the government fails to arrest this trend, the result could be crippling for the textile manufacturing industry.
The electricity deficit is also at an all time high, resulting in frequent power shutdowns causing lower efficiencies and machinery breakdowns.
These occur during peak as well as off-peak hours. Increasingly, the supply of natural gas to industrial units is also prone to shutdowns especially in the winter season.
The result is that even gas fueled captive power plants cannot provide the standby economic benefits that they were installed for.
At the same time, the 33% rise in electricity tariff, followed by a 20% hike in the petroleum prices are causing rapid erosion in Pakistan's cost competitiveness.
There is strong expectation that the ocean freight will also be increased by US $ 600 per container in coming future. Saif Textile Mills Limited Third Quarterly Report 2007-2008.
This operationally challenging environment has come at the same time as the energy crisis, and has had a telling effect on the operating cost and efficiency of the textiles manufacturing sector.
This sector is in crisis and requires support from the regulatory authorities in helping it to regain cost effectiveness and international market share.
Instead, the government has increased the mandatory minimum wage at a time when the textiles manufacturing sector is determined to control costs in order to survive in these difficult times.
Prices of cotton have also risen unjustifiably considering that the quality of the crop is below par. With an estimated shortage of 2 million bales, it is likely that cotton prices will continue to rise without any commensurate increase in the quality of the bales.
In this operating environment, the mission facing your Company's management is an extremely challenging one. Our goal is to operate in a dedicated and efficient manner as much as possible and by doing so, to minimize the adverse impact of the depressed market and economic conditions.
In the absence of any positive change in government economic policies & developments during the next quarter, our operating results are unlikely to improve beyond their current levels.
The Board places on record its appreciation for the support of our bankers and our valued customers. We would also like to highlight the hard work put in by the members of our corporate family.
Saif Textile Mills Limited
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