Lost opportunity for Pakistan’s textile mills ?

An article in Bloombergbusinessweek (April 30,2012) describes Pakistan’s textile industry as one of the world’s largest,employing 20% of the country’s labor and $14 billion in exports. But in the Pakistani city of Faisalabad, that produces 50% of the output, power cuts for days at a time and shortages of natural gas have caused 50% of the power looms and 10% of the spinning mills and fabric printing mills to shut down. Given the opportunity to benefit from textile sourcing moving out of China because of rising wages and the appreciating yuan, these energy issues have dampened growth in Pakistan. Instead, Bangladesh and Cambodia have prospered. Should retailers step in to solve the power problem or just move to another supplying country ? If power disruptions imply the need for expensive generators, should they be provided by the government as a stopgap while power stations come online ? Or should Pakistan’s producers target the higher margin products that can pay the higher rates in return for artisan level production ?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , , , , , , , . Bookmark the permalink.

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