Degree

Master of Business Administration Executive

Faculty / School

Faculty of Business Administration (FBA)

Year of Award

2014

Project Type

MBA Executive Research Project

Access Type

Restricted Access

Executive Summary

This academic report is submitted to the university as part of MBA program completion, it is based on the textile industry of Pakistan and the research problem question v\/as on the problems of textile exporters caused due economic instability and unpredictable inflation. A series of interviews were conducted with higher management of few textile units and factories to evaluate their perception about the reasons of downfall of the textile industry. The research hypothesis was focused on controlling the production cost and providing suitable resources to ensure smooth operations and allow exporters to be in better position In the international market.

The textile industry of Pakistan contributes heavily towards internal manufacturing and national employment. Since Pakistan is 4*^ largest producer of cotton and renowned for quality products the international market with US and Europe as main buyers. The textile exporters have enjoyed good profit margins in the past and also brought in foreign exchange against their international orders. In recent years the Pakistan is going through series of unfavorable conditions that caused downfall of textile industry and the exporters are struggling on the edge in for survival.

Currently Pakistan is facing power generation and energy crisis, increase in raw material prices, increase in labor wages, inefficient transport system, lack of new investment, lack of industrial research, brutal law and order situation and most importantly cut down of import orders from US European countries. The involvement of Pakistan in war against terrorism has created national security threats along with many unfortunate incidents of political murders and bombings that result in heavy loss of human lives and economy. Consequently, this has portrayed negative impact on tourism and stopped many international buyers to visit Pakistan and exporters have been facing high overhead costs due to many issues resulting in creating hurdles to compete the international competition.

For the current research 32 personal interviews were conducted as part of qualitative research methodology. The intention was to derive exporter’s personal perception about textile industry problems and economic inflation which was required to complete the research. Also there was SWOT analysis technique applied to identify strengths, weakness, opportunities and threats of the textile industry of Pakistan that also supported results from primary and secondary research.

In the sample of 32 respondents 81% purely export their products while 19% also trade in local market Pakistan along with their export orders and majority of the respondents had exports to US, Europe and Middle East. According to the results the main problem of the exporters was shortage of gas and electricity and controlling production cost due to rise in fuel prices, labor wages and high energy tariffs. Recent fluctuation of Pakistani rupee against US Dollar is also another concern to the exporters as 75% of the respondents projected in the research findings. More than 89% of the sample also pointed out towards increase in raw material cost as a consequence of insufficient transport system and high fuel prices. Pakistan is currently going under severe energy crisis and load shedding of electricity and gas in the industrial areas is causing problems to complete orders in time and also increasing overhead cost. Many of the factories and units have gone for substitute gas generation power plants but demand government’s help in reduction of energy tariff and taxes.

In the conclusion the research hypothesis proves to be true as most exporters are struggling on the edge to control their production cost without which it seems very difficult to compete in the situation of Pakistan. The international market and current instable political and economic research results shows that the textile industry has high potential to perform even better than the past provided it gets the necessary resources needed with government support in taxes and energy tariffs. If the production cost in confined and controlled within a certain price range the textile exporters have better chance to perform in these difficult survival conditions.

Pages

IX, 49

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