PAKISTAN: TUFS scheme to boost textile investment
Authorities in Pakistan have responded to industry calls by introducing a Technology Up-gradation Fund Scheme (TUFS) for textile firms to subsidise and boost investments in new equipment.
Under the scheme, the government will pay 50% of the interest cost of new investments in plant and machinery up to a maximum of five percentage points a year - or whichever is less. For small investments the government will contribute up to 20% of the capital cost as a grant.
PKR1.6bn (US$16.82m) has been pledged in the current financial year for the scheme, with the amount increasing to PKR17bn (US$178.95m) by 2014.
The measure is a part of policy initiatives that aim to boost textile exports to US$25bn.
Mohsin Aziz, chairman of the All Pakistan Textile Mills Association (APTMA), said the TUFS scheme will help improve competitiveness and boost exports. He also urged the Ministry of Finance to allocate adequate funds as soon as possible for investments in new projects.
Gohar Ejaz, group leader of APTMA, added that power availability would be crucial to accelerate investment in textiles, even with the discounted interest rates.
The textile sector has withheld investment in the last seven years due to high mark-up rates and the ongoing energy crisis.
According to the International Textile Machinery Federation (ITMF), only 238,000 spindles and 1100 shuttle-less looms have been shipped to Pakistan since 2007.
Pakistan's textile and clothing industry has been receiving government assistance in the form of drawback on taxes, loans at reduced rates, reimbursements on social security taxes, tax-free import of machinery, and incentive schemes that favour the creation of large export companies.
- Patagonia's CSR commitments re-shaping the sector
- Can Gap maintain its momentum minus Larsson?
- Brands back Cambodia industry-wide wage bargaining
- Can robotics redefine apparel manufacturing?
- Athletic players well positioned amid disruption
- Unions agree proposed Cambodia minimum wage
- New CEO may focus on Ralph Lauren supply chain
- Patagonia ramps up Fair Trade Certified apparel
- Nike collaborates on low-impact textile challenge
- Old Navy's Larsson to replace Ralph Lauren as CEO
- The future market potential for smart garments and e-textiles
- Global Database of the Top 1000 Apparel Producers - Company Names, Financial Performance, and Contact Details
- Myanmar's Garment Sector in 2015 - now with updated members' directory
- Global market review of lingerie - forecasts to 2020
- Outdoor performance apparel: peaks, valleys, and green fields