Sindh: industrial shutdown.

Byline: Tariq Mahmood - Karachi

PAKISTAN's textile sector, particularly the denim industry, is badly affected by the coronavirus pandemic. This industry supplies the world's jeans and fashion retailers and popular brands. A few weeks after the pandemic outbreak, these global players started to cancel orders.

Once a customer places an order, it is then that the manufacturer orders raw material from suppliers. Some of these materials take up to three months to prepare. The order pipeline is, therefore, based on six months forecast to ensure smooth continuity of supplies and deliveries.

For most of the orders that were cancelled, the raw material had already been procured or was in the chain. The manufacturers had produced up to 80 per cent of the placed orders.

In this backdrop, the Sindh government imposed a lockdown and told all factories and industries to shut down. The labour ministry announced that it would be illegal to layoff labour during this lockdown period. To a certain extent, this is fair business practice. However, it is not perpetually possible.

After raw material, the largest cost is that of employees and labour. It is not possible for companies to pay wages without sales; more so in the textile segment, which faces stiff international competition and operates on thin profit margins.

Two weeks into the lockdown, the manufacturers approached their respective trade associations and asked the government for the resumption of limited operations so that at least the ready orders, or orders that could be shipped immediately, were exported. This was...