APTMA

[All Pakistan Textile Mills Association]

(course assignment of Exports Marketing)

Submitted to:

Mr. Shehzad Lakhani

Submitted by:

Zulqarnain

Hanif

Sohail

Izhar

APTMA
INTRODUCTION:
All Pakistan Textile Mills Association (APTMA) is the premier
national trade association of the textile spinning, weaving, and
composite mills representing the organized sector in Pakistan.
APTMA emerges as the largest association of the country as it
represents 396 textile mills out of which 315 are spinning, 44
weaving and 37 composite units. These spinning mills have
production facilities of texturing, mercerizing and dyeing of yarns;
weaving mills have sizeable number of air-jet looms, and the
composite mills have manufacturing facilities from spinning to
finished textile products under one roof. The total installed
capacity of APTMA member mills accounts for 9,661,366 spindles,
61,608 rotors, 10,452 Shuttle less /Air jet Looms and 1897
conventional looms. The Association's members produce spun
and open-end yarn, grey, printed dyed fabrics and bed linen.

AIMS & OBJECTIVE

"Facilitate Pakistan textile industry to obtain and sustain global
standing”.

APTMA endeavors to promote efficient business systems at Micro

and Macro
levels for supporting integrated commerce

THE ORGANIZATION
Association's Principal Office is located at Karachi and Regional
Offices are at Karachi, Lahore and Peshawar. The Principal Office
functions under the administrative control of the Chairman and
Central Executive Committee. It deals with the affairs connected
with textile trade and industry effecting members relating to
Federal Government, whereas matters concerning Provincial
Governments are dealt by the Regional Offices under the
direction of Regional Chairman.

The Chairman and Vice-Chairmen from Regional Offices are

elected by the members annually and are charged with
implementing the policies and program directives decided by the
Central Executive Committees. The Chief Operating Officer and
Secretaries are responsible for carrying out day-to-day affairs and
programs of the Association. The Central Executive Committee
continuously reviews the policies and programs of the Association
and establishes priorities accordingly.

THE ROLE OF APTMA

As per charter and by-laws, aims and objectives of the Association
are;

1. To encourage friendly feeling and unanimity amongst Textile

Mill owners on all subjects connected with their common good.

2. To secure good relations between members of the Association.

3. To promote and protect the trade commerce and manufactures
of Pakistan in general and of the cotton trade in particular.

4. To consider questions connected with the trade commerce and

manufactures of its members.

5. To collect and circulate statistics & information classify relating

to the trade, commerce and manufactures of its members.

6. To take all steps which may be necessary for promoting,

supporting or opposing legislative and other measures affecting
the trade, commerce or manufactures of its members.

7. To make representation to local, Provincial and Central

authorities on any matter connected with the trade, commerce
and manufactures of its members.

8. To arbitrate in the settlement of disputes arising out of

transactions, piece goods, yarn and other manufactured goods
between parties willing or agreeing to submit to arbitration in
accordance with the Arbitration Rules of the Association.

9. To advance and promote commercial and technical education

connected with the trade and commerce of its members.

10. To undertake special inquiries and initiate or support any

action for securing the redress of legitimate grievances connected
with the trade or commerce of its members.

11. To take any action which may be conducive to the extension

of the trade and commerce of its members or incidental to the
attainment of this object.

12. To subscribe, to become a member of and cooperate with any

other Association whether incorporated or not whose objects are
altogether or in part similar to those of the Association and to
procure from or communicate to any such Association such
information as may be likely to forward the objects of this
Association

13. To establish or aid in the establishment of funds to benefit

employees of the Association or the depending of such persons
and to subscribe, donate or guarantee money for charitable or
benevolent purposes at the discretion of the Association.

14. To regulate conditions of employment in the industry

conducted or carried on by its members.

15. And generally to do all that may be necessary in the interest

of the realization of the above objects of the Association directly
or indirectly.

MEMBERSHIP
APTMA membership consists of partnerships and or individual
proprietorships, which operate machinery for spinning, dyeing,
texturizing, twisting, or otherwise processing of yarn, thread, or
cordage, grey, printed and printed cloth and made ups for sale.

The expenses of maintaining APTMA's professional staff and

offices are met from the annual subscriptions and services
provided to members. APTMA Principal Offices is the central
administrative organization, but each member has its own offices
and governing board.
BECOMING APTMA MEMBER
Members are the core part of APTMA. The association is really
proud of its members and always supports them in all aspects.
There is a specified criterion to qualify for the membership. The
subscribers of the Memorandum of Association and persons
admitted to membership in accordance with these Articles shall
be members of the Association (the word Persons" shall include
individuals, firm or company), provided that the indenting
member must hold a National Tax Number.
QUALIFICATION FOR MEMBERSHIP
(i) Any individual, firm and/or company owning and/operating a
manufacturing unit and meeting the criteria specified hereunder
shall be eligible for membership of the Association:

a) Yarn manufacturer: the manufacturing unit must consist of at

least 5,000 spindles or 1000 rotors.
b) Cloth or Fabric manufacturer: the manufacturing unit must
consist of at least 200 local looms or equivalent thereof or 48
Shuttleless/Airjet looms or equivalent thereof.

ii) any individual firm or company intending to install a textile

manufacturing unit that is expected to meet the eligibility criteria
specified in Article 5(i) may also be considered eligible for
Provisional Membership.
Every candidate for membership shall be proposed by one
member and seconded by another member of the respective
Regional Office of the association and has no criminal conviction.
Every application for membership shall contain facts showing that
the candidate is a firm or company that meets the eligibility
criteria specified in Article 5(i) along with an undertaking by the
chief executive officer of the candidate to carry out all obligations
of a member of the association and shall be signed by the
candidate. Provided that an intending member must hold a
National Tax Number and Sales Tax Registration Number.
All application for the membership shall be made through the
respective Regional Offices and shall be accompanied with such
admission fee, annual subscription and/or compulsory
contributions as payable under the Articles. The Regional
Managing Committee of the respective Regional Offices while
forwarding the application for the membership shall attach such
observations as are considered appropriate.
The membership shall be granted for a period of one year and
shall expire on 31st. day of March every year irrespective of the
date of grant of membership. The membership shall be renewable
on annual basis on furnishing proof of filing a return of income or
statement in term of the Income Tax Ordinance,2001 for the
latest preceding assessment year by the member , whether
individual, firm or company along with TCO(Tex1-5) Returns for
the month of February of the year. In case of inconsistency, the
higher figure as regards the capacity or turnover by the
candidate/member will prevail for the purpose of calculation of
membership fee.
A sole proprietorship firm or any other company or a concern
shall be eligible for the membership provided that a firm or
company deals in the relevant trade of the Association. A firm or
company shall not be entitled to simultaneously retain the
membership of more than three different types of Association
bodies.

ADMISSION FEE
The intending member shall pay Rs.25, 000.00 as Admission Fee.
The total collection on account of Admission Fee shall be
distributed for utilization between Principal Office and the
Regional Offices in a manner that the share of the Principal Office
shall be 40% and that of the Regional office concerned 60%.
CLASSES OF MEMBERSHIP
Unlike previous law, the new Trade organization laws recognizes
only two following categories of membership and provides equal
opportunity to both the classes to take part in the affairs of the
APTMA.
(i). Associate Member:
means a member of a trade organization which is not a body
corporate or a multinational or a sales tax registered
manufacturing concern or a sales-tax-registered business concern
having annual turn-over of Rs.50 million or above;
(ii). Corporate Member:
Means a member of a trade organization which is either a body
corporate or a multinational corporation with its head office or
branch office in Pakistan or a sales-tax-registered manufacturing
concern or a sales-tax-registered business concern having annual
turn over of Rs.50 million or above.
(iii). Women Members:
In order to promote the role of women involved in Textile Sector,
the government has made compulsory for Associations to reserve
two seats in the Executive Committee for women entrepreneurs
and Electoral College for women seats shall be the Executive
Committee of the APTMA.

CURRENT COTTON CRISES:

As if the shortage of sugar, gas and electricity was not enough,
cotton yarn has emerged as the latest addition to the premier
league of scarce commodities. Cotton yarn is a basic raw material
for value added textile sectors which boast of the largest
industrial employment and significant economic contribution. Its
sudden shortage and surge in its prices has forced the value
added sectors to make an extreme demand to ban cotton yarn
exports.
Cotton yarn availability for domestic market has been on the
decline since early October when hectic exports took place
between July and September. Export volumes skyrocketed in
October and early November, making the commodity scarce and
expensive.
The value added sector claims that cotton yarn prices have risen
by 33 per cent over the last few months. Spinners feared to have
larger export orders in hand for December and January which
leaves lesser quantity of cotton yarn for domestic consumption
for the coming weeks.
Cotton yarn market is dictated by demand and supply in domestic
as well as in most of the overseas markets. Reasonable rise and
fall of prices and stocks availability is a market norm and
traditional forces of demand and supply ultimately let the market
find its true levels at a fairly quick pace. But any sudden rise and
excess export volume of cotton yarn beyond the norm can create
temporary disruption in the domestic supply chain and a crisis for
value added sector.
Value added sector has been accusing spinners for this crisis
which is apparently over simplification of the nature and the
making of the crisis. The current crisis carries major implications.
The quantity of cotton yarn available in the domestic market is far
below the usual ratio of industry production (around 70 per cent),
creating severe shortage of up to 30 per cent, resulting in the
price hike of over 30 per cent in last three months.
Free import and export of raw cotton and cotton yarn have at
times worked to the advantage of spinners but many times have
left them in cold with huge inventories and losses and vice versa.
Cotton lobby and farmers have been benefited due to open trade
policy. This policy has so far successfully operated in adverse
market conditions and has been allowed to continue till to date.
International cotton scenario experienced an upturn from July.
New York Cotton futures for nearby months on June 1, 2009 was
USC 57.79 per LB which increased by November 17 to USC 67.89
per LB (an increase of over 17 percent).
Domestic prices also moved upward in unison with international
prices after a slight delay. Karachi Cotton Association quoted its
monthly average spot rates as Rs. 3,446 per maund in August, Rs.
3,484 in September and Rs3,597 in October. Spot price of cotton
was set at Rs. 4,200 per maund on November 17, 2009.
The size of the cotton crop for 2009/10 is expected to be slightly
better with 12.1 million bales harvest as compared to 11.4 million
of last year. Pakistan cotton Ginners Association has reported 29
per cent higher cotton arrivals over the last year by November 15,
2009 mainly due to early harvest varieties. Statistically, cotton
crop size and availability is far better than last year but damage
to cotton crop in China (the largest producer and consumer of the
world) has ignited the rise in cotton prices.
The latest strong retail sales in the US and faster than expected
economic recovery in leading world economies have lead the
cotton trade revise cotton consumption estimates higher than
earlier estimates at the start of the season. International cotton is
mostly traded in the dollar.
Recent weakness of the dollar has also resulted in higher price
offers for cotton as in case of other global commodities. The
appreciation of Indian currency forced their shippers to ask for
higher prices for their cotton. India is the largest exporter of raw
cotton; hence, it firmed up international market sentiments.
The sudden increase in raw cotton prices caused a panic for the
major world importer of cotton yarn, China. Its importers moved
fast to cover up their supplies with continued buying spree from
Pakistan and India. Their spinners look up to clearing up their
piles of inventories of new crop season with renewed vigor.
The value added sector failed to notice the overseas buying spree
until they had mopped up huge quantities. The value added
sectors woke up too late to the call as overseas buyers mopped
up available lot with shipment plans till January 2010. Standard
cotton yarn count of 20’s witnessed prices rising from $370 per
bale for October/November deliveries to $430 for December/
January deliveries. The price increase in cotton and cotton yarn is
a normal market practice. Raw material driven price hike is
adjusted by the finished goods buyers in their new purchase
programs. But a severe resistance prevails to adjust the current
price increase in the new buying programs due to global demand
contraction. Value added sectors fear slower adjustment of
increased raw material cost in future sales carrying risks in export
orders or eroded trade margins.
The value added sectors usually enter into longer sales contracts,
spanning from two to six months or even longer whereas they buy
the cotton yarns on ready prices. Sufficient stocks and relatively
subdued prices in the recent past have been supportive of this
market practice. But slow response of domestic value added
industry to cover up sufficient supplies at increased market prices
landed them in the current cotton crisis where bulk of yarn has
been shipped in recent months and more is committed for export
in coming months. This has flared up the prices to new heights.
The current situation is highly favorable for those spinners who
could purchase and afford sufficient stock of raw cotton at the
start of cotton harvest season.
Dynamics of market forces and trend indicates that sudden rise of
prices and scarcity of cotton yarn is not the spinners making
alone. Current imbalance of domestic supply and excessive
exports is the result of changing international cotton scenario.
Had the value added sectors acted proactively through timely
buying commitments with local spinners at market prices, they
might have avoided much of the damage. Free import and export
mechanism of cotton and cotton yarn has worked well for the
economy since early 1990’s. This principle has ultimately helped
the industry to improve its efficiency and productivity to attain
sustainable gains for whole cotton value chain. The principle of
free market economy for cotton trade should not be a causality of
current crisis.
Industry consultations with the help of ministry of textiles should
be helpful in finding some meaningful mechanism to make
sufficient cotton yarn stock available for domestic consumers to
fulfill their commitments without many losses. But it is equally
important that value added sectors should be more responsive
and alert to changing world market trends to protect their own
business interests.
APTMA CASTIGATES PROPOSAL TO BAN
YARN EXPORTS
The All Pakistan Textile Mills Association (APTMA) has severely
condemned the proposal to impose restrictions on exports of
cotton yarn or imposing duty, by saying that this would be against
the concept of free trade mechanism.

APTMA said that the country was facing a production shortfall of

cotton, despite which raw cotton was being exported in huge
quantities and which it has never opposed and was importing
cotton from other countries to meets its requirements.

It also went on to add that the spinning sector was paying export
parity price to the farmers and in the interest of the farmers
would never suggest imposing ban on exports of cotton from the
country at a time when a shortfall was looming.
APTMA blamed the closure of a large PSF plant for the hike in yarn
prices as other PSF manufacturers had hiked prices and at the
same time the government had also imposed anti-dumping duties
on imports of PSF into the country.

APTMA SEEKS DUTY-FREE IMPORT OF

FIBRE
The textile spinners want the government to eliminate import
duty on polyester staple fibre (PSF) as well as set aside import
restrictions in view of huge shortages facing the industry.
The industry is facing PSF shortages of 10,000 tons per month
due to reduced domestic production, says the All Pakistan Textile
Mills Association (APTMA).
An APTMA release said the import duty and restrictions were
burdening the industry heavily as the curbs provide incentives to
the local PSF manufacturers to raise their prices. Currently, the
PSF price has gone up to Rs. 108 per kilogram.
The customs duty on import of PSF was fixed at 4.5 per cent for
2008-09. PSF is allowed to be imported under the Duty and Tax
Remission for Export (DTRE) scheme.
In addition, many Man Made Fibre (MMF) including viscose,
modal, acrylic, tensil, etc., are also being protected despite the
fact that no domestic manufacturing was being made. An import
duty of 6-6.5 per cent was imposed by the government on other
MMF, again hampering the growth of textile value chain.
“The incidental effects of such protections on PSF and MMF are
very high, especially in the absence of a tangible zero rating
system in place. This situation is leading to many ills including no
product diversification, anti-domestic commerce and hindrances
to the introduction of technical textile industry in Pakistan,” says
APTMA.
During the current fiscal year, the production of PSF was curtailed
in the country due to the closure of a local PSF manufacturing
unit, for reasons other than the dynamics of the business of PSF.
This has created a shortage in the domestic market.