The government provides finances and has also invited foreign investors to invest money in the industries. Pakistan has an abundance of raw materials. Industries are mostly set up in areas where raw material is easily available. Industries provide employment to people as well. Labor both skilled and unskilled is easily available.
Besides large industries cottage and small scale industries also exist. Handicrafts, sports goods, cutlery are made in these industries. It is interesting to note that all industries in Pakistan are based on agricultural produces. Pakistan does have some mineral resources available in the country too.
Any industry which does not directly rely on agricultural produces in Pakistan needs minerals as raw material. Also, like most of the other developing countries industries in Pakistan have grown at a fast pace in recent decades. This is especially true for the few recent years. Population pressure automatically pushes densely populated countries towards industrialization. This is what has happened in case of Pakistan too.
Some large scale industries are:
- Cotton Industry
- Sugar Industry
- Cement Industry
- Steel Industry
- Textile Industry
The industrial sector of Pakistan accounts for almost 24% of the GDP. The largest industry in the country is cotton textile and apparel accounting for almost 66% of the exports and about 40% of the employed labour. The other major industries include cement, edible oil, and fertilizers, steel, tobacco, chemical, sports goods, machinery and food processing.
The Government is trying to diversify the industrial base and improve our export capacity. Privatization of parastatal units is being done on a large scale and growth has accelerated in the overall industrial output.
Let’s take a look at the important industries of the country.
Cotton Industry of Pakistan
Cotton industry is the leading industry of Pakistan. We are not only self-sufficient in fulfilling the local demands of cotton goods but are also exporting to other countries and earn foreign exchange through this sector. Due to the perfect climate and soil 1.3 million out of 5 million farmers in Pakistan cultivate cotton. On the average around 30 to 40 percent of the cotton is consumed locally and the rest is exported in raw or finished form to many countries of the world.
In the past most of the raw cotton was exported but now more emphasis is being given on the export of finished products as value added commodities bring in much more earnings for the country. Pakistan earns 55% of its foreign exchange through exports of raw cotton, cotton yarn, cloth and garments and other cotton products, which together make up about 70% of Pakistan’s total exports per year.
Pakistan is the 4th largest producer of cotton, 3rd largest exporter of raw cotton, 4th largest consumer of cotton and the largest exporter of cotton yarn.
Cotton industry has four main processes, including:
- Ginning: Cotton lint is separated from the seeds.
- Spinning: Cotton fibers are turned into yarn.
- Weaving: Cotton yarn is woven into cloth.
- Garment-manufacturing: The woven cloth is finally given shape of clothes.
Pakistan has shown remarkable growth in the production of cotton products. Spinning industry has shown great improvements in its production during last five years and an increase in its capacity from 5.27M.spindles and 77000 rotors in 1990 to 8.63M spindles and 132000 rotors in 1995. Same is with the production of yarn; it also showed an increase in its production from 1055.23M.K.Gs in 1990 to 1415.20M.K.Gs in 1995.
Currently there are 493 textile units working in Pakistan, out of which 53 are composite units, 410 are the spinning mills and 30 are the waste spinning units. There are around 700 spindles, 27,000 looms in the mills sector, and 250,000 in the non-mills sector, 700 knitwear units, 4000 garments units, 650 dyeing and finishing units and around 1000 ginneries.
These units are mostly in the Province of Punjab. Large numbers of textile mills are also present in and around Karachi, as it is a metropolitan city and have a sea port with transportation being much simpler than other cities. Other main cities for this sector are Faisalabad and Hyderabad and both have mills close to the cotton producing areas.
Cotton industry is facing many problems that include inconsistent production of cotton crop, improper system of stabilizing the prices of cotton and yarn, lack of timely modernization of the industrial machineries, lack of skilled labour and the most prominent current problem is load shedding of electricity and natural gas.
Pakistan is also facing a decline in the production of cotton in the last 4-5 years and the local consumption is increasing as compared to India whose production gained prominent increase in the same period.
It is also facing a recession phase because of its prices. It is under a fierce competition with the countries with low cost prices as Pakistani products are comparatively high in price due to high cost of electricity, instable political and financial circumstances and untimely changes in the terms and conditions of exports.