Haq's Musings

Riaz Haq writes this data-driven blog to provide information, express his opinions and make comments on many topics. Subjects include personal activities, education, South Asia, South Asian community, regional and international affairs and US politics to financial markets. For investors interested in South Asia, Riaz has another blog called South Asia Investor at http://www.southasiainvestor.com and a YouTube video channel https://www.youtube.com/channel/UCkrIDyFbC9N9evXYb9cA_gQ

Showing posts with label Denim. Show all posts

Tuesday, October 5, 2021

Pakistan's Denim Exports to US Soared 62% in First Six Months of 2021

Pakistan exported $38 million worth of denim clothing to the United States in July, 2021. This figure represents 140% growth over July, 2020. Mexico's denim exports grew 58% while those of Bangladesh grew 24% in this period, according to the US Office of Textiles and Apparel.

US Denim Apparel Imports. Source: US Office of Textiles and Apparel

Among the top Asian suppliers, Pakistan's exports to US jumped 62.16% year to date to $188.94 million. Bangladesh’s exports increased 42.82% to $362.38 million in this period while shipments from China were up 13.28% to $192.49 million.

Pakistan’s textiles and clothing exports are expected to rise in the coming months as the US moves orders out of China and other neighboring Asian countries. The focus on more value addition and new textile policy of the country will support the organic growth in exports. The depreciation of PKR has also boosted textile exports.

The monthly average of apparel exports from Pakistan was $565.60 million in H1 2021, which is expected to rise by 13.44% in H2 2021 to reach $641.60 million, according to a report in Fiber2Fashion. The US, the UK, Germany, Spain and France were the top importers of Pakistani apparel in H1 and accounted for approximately 68.27% of total apparel exports of the country, according to Fibre2Fashion’s market analysis tool TexPro.

Pakistan's textile and garment exports jumped 22.94% to reach $15.4 billion in Fiscal Year 2020-21 (July 2020-June 2021), according to data from Pakistan Bureau of Statistics. At the same time, the country's technology exports surged 47% to set a new record of $2.12 billion for the last fiscal year that ended in June 2021. Pharmaceutical exports also saw 25.3% growth to $241 million in the first 11months of FY 2021, indicating Pakistan's export diversification with higher value added goods and services.

Pakistan Textile/Apparel Exports. Source: Arif Habib Ltd

Pakistan Textile Exports FY 2006-2021. Source: APTMA

Overall, Pakistan's exports of goods for fiscal 2020-21 rose 13.7% to $25.63 billion. The nation's service exports increased 9.2% to $5.93 billion in fiscal 2021. Combined exports of goods and services added up to $31.56 billion in July 2020 to June 2021 period.

Pakistan Tech Exports. Source: Arif Habib Ltd.

Imports grew 23.2%, much faster than exports as the economy recovered from the COVID-induced slump, widening the trade gap in the process. Energy demand drove imports of oil and gas to new highs.

Pakistan Current Account Balance. Source: Arif Habib Ltd.

During the last two fiscal years, Karachi has accounted for 51% of Pakistan’s exports, Lahore came in 2nd with 18%, Faisalabad 3rd with 12% and Sialkot 4th with 8.5%.

Pakistan's Exports by Cities. Source: FBR

Record inflow of nearly $30 billion in remittances from overseas Pakistanis helped reduce the current account deficit to $1.85 billion in FY 2020-21. It's down 58.4% from $4.45 billion in FY 2019-20.

Overseas Pakistanis' remittances represent 10% of the country's gross domestic product (GDP). This money helps the nation cope with its perennial current account deficits. It also provides a lifeline for millions of Pakistani families who use the money to pay for food, education, healthcare and housing. This results in an increase in stimulus spending that has a multiplier effect in terms of employment in service industries ranging from retail sales to restaurants and entertainment.

Over 10 million Pakistanis are currently working/living overseas, according to the Bureau of Emigration. Before the COVID19 pandemic hit in 2020, more than 600,000 Pakistanis left the country to work overseas in 2019. The average yearly outflow of Pakistani workers to OECD countries (mainly UK and US) and the Middle East has been over half a million in the last decade.

Worker Remittances as Percentage of Pakistan GDP. Source: World Bank

Pakistan ranks 6th among the top worker remittance recipient countries in the world. India and China rank first and second, followed by Mexico 3rd, the Philippines 4th, Egypt 5th and Pakistan 6th.

Sunday, June 20, 2021

IKEA CEO Jesper Brodin Started His Career in Karachi, Pakistan

Jesper Brodin, CEO of Holland-based Ingka Group, started his 25-year career working for Ikea in Karachi, Pakistan in 1995. Ikea does not operate its stores in Pakistan but the company sources home textiles from the South Asian country. Today, Ikea is a major global retailer of home furnishings with worldwide sales of over $40 billion. Like any other major retailer, it is responding to its customers' demand for products produced in a sustainable way in terms of their impact on the environment and the people involved in the supply chain.

Ikea CEO Jesper Brodin. Source: Financial Times

Who is Jesper Brodin?

Jesper Brodin is the chief executive officer (CEO) of Ingka Group that owns IKEA, a global retail sores chain with worldwide revenue of over $40 billion. He was born in Gothenburg, Sweden.

Brodin started his career as IKEA's purchasing manager in Karachi, Pakistan in 1995. Speaking to Bloomberg TV recently, he said he learned after being hired that he was the only applicant for the job. He attributes it to the fact that the mid-1990s was a turbulent period in Karachi. He was soon promoted to the position of the regional manager for Southeast Asia region. In 1999, he assumed the role of assistant to Ikea founders Ingvar Kamprad and Anders Dahlvig, who served as CEO at that time. Before being appointed CEO of Ingka Group, he was a managing director at IKEA of Sweden/Range and Supply, which is responsible for the development of the product range and supply chain of the IKEA brand.

Ikea Supply Chain:

Ikea sources home textiles from Pakistan. Home textile products range from bedsheets and towels to draperies and rugs. Ikea is actively managing its global supply chain in response to its customers' demand for sustainable products both in terms of their impact on the environment and the lives of the people involved.

The top six Pakistani suppliers to Ikea are Al-Karam, Yunus, Gul Ahmad, Mustaqim Dying and Printing, Indus Home and Nishat Textiles. In addition to these manufacturers, Ikea also manages the production of organic non-GMO cotton produced in Pakistan and supplied to these mills. Organic cotton makes up less than 1% of global cotton production, and concerns continue over the integrity of its certification.

In 2017, World Wildlife Fund (WWWF) Pakistan, in collaboration with C&A Foundation and Agriculture Extension Department (AED), started the organic cotton project under the National Organic Program (NOP) in two major phases: Certification for the validation of using no pesticides and approval of the land for cultivation of organic cotton Investment in the training of more than 4,000 farmers to cope with the essence of organic cotton production standards.

In recent years, Pakistan has started exploring the use of hemp as a more sustainable fiber for use in textiles. At last year's Kingpin Show online, Karachi-based Artistic Milliners presented its Bio Vision 2.0 collection that is based on guidelines set by the Ellen MacArthur Foundation’s Jeans Redesign, featuring biodegradable fibers that provide optimal recovery, according to Sourcing Journal. The mill’s circular focus is also displayed in its Circular Blue New collection, which is made of 100 percent recycled cotton and uses post-consumer, pre-consumer and industrial waste. Lahore-based US Denim’s latest collections also focus on sustainability and feature recycled and biodegradable fibers. Its Reborn product is “sustainable from every angle” and uses recycled cotton, elastane and polyester; aniline-free dyestuff; and water-safe dyeing methods.

Summary:

Ikea CEO Jesper Brodin began his career in Karachi, Pakistan about 25 years ago. He now heads the major global retailer with sales of over $40 billion. Pakistan continues to be a part of Ikea's global supply chain. The focus of the company has dramatically shifted to sustainability both in terms of the environment and the people involved in the production process. In recent years, Pakistan has started exploring the use of hemp as a more sustainable fiber for use in textiles.