Nishat Mills reports higher sales & profits during Q1

19 Mar '11

5 min read

Our textile industry had shown great courage in coping with these challenges in the financial year 2009-2010. However, the worse is feared in the financial year 2010-2011, due to loss of cotton crop as a result of unprecedented rains and floods in the country which has affected the supply of cotton resulting in high prices of this basic raw material of the industry. During the first half of current year, cotton market remained very volatile and is still highly speculative.

As a result both the buyers and sellers of cotton are very cautious in their decisions. Cotton prices in the international market have also reached to unprecedented levels in the recent times and have significantly increased the cost of imported raw material. Furthermore, higher inflation in the country is another major cause of concern for this sector.

In addition, the recent announcement of imposition of safeguard measures by government of Turkey in the form of additional import tariffs may have an adverse effect on future textile exports of the country. In this difficult time, textile sector expects very effective measures from the Government to protect export businesses of the country of which textile sector is the biggest contributor.

Increase in demand of our products in Europe and America is a major helping factor which may help our textile sector to sail through these challenging times. However, withdrawal of import duty on our exports to Europe has not yet been effective and its impact on the export of textile sector of Pakistan is yet to be seen. A lot of efforts are in progress jointly by the Government and our textile associations firstly to ensure the implementation of already announced withdrawal of import duties and secondly to get this relaxation for more of our finished textile products.

As usual the management of Nishat Mills is keeping a close eye on the volatile market situation and is taking proactive measures to mitigate the impact of emerging challenges including but not limited to application to Government of Turkey to be part of the investigation for safeguard measures proposed to be imposed on Pakistani exports to Turkey. Our future marketing strategy will be to explore new markets for our products, broadening our product mix and getting maximum benefit from our vertically integrated production facilities that can turn raw cotton into a final finished consumer product.

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Nishat Mills Limited

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