Textile producers in Pakistan are upbeat about the year ahead, with opportunities seen to include market access under the European Union's GSP+ trade scheme, the changing dynamics of the Chinese textile industry, labour unrest and higher wages in Bangladesh, and the local availability of cheaper fibres, especially cotton.

Under the new EU GSP+ scheme, Pakistan's textile and garment sector will benefit from zero tariffs on shipments to European markets.

While some industry observers believe that exports will increase by US$650m in the first year alone, the All Pakistan Textiles Mills Association (APTMA) anticipates that textile and garment exports to the EU could rise by US$2bn in the coming years.

There is also optimism that a shift by Chinese producers away from basic textiles will present a huge opportunity for yarn and fabric producers in Pakistan who are expanding their capacities.

12,000 more spindles are being installed at Blessed Textile Mills' spinning unit in Sheikhupura which will increase the facility's production capacity to 360 tons of yarn per month. While expansion at Faisal Spinning Mills, with 6,000 spindles at Nooriabad, has enhanced its output to 270 tons per month.

In addition Sapphire group, one of the country's largest textile giants, has recently expanded its dyed fabric production capability to 4m metres a month. The group pledged to increase its size to 5m metres per month by March 2014.

However there are also challenges facing Pakistan's textile and garment producers, including rising power and financial costs, energy shortages, weakening of the domestic currency and double-digit inflation.

In its annual report released last week, the central bank, the State Bank of Pakistan, warned authorities that energy shortages could prevent export sectors from seeing full benefits of market access to the EU under the GSP+.