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Factors Impacting Textile Industry

Keywords: textile industry factors, textile industry growth

The research reported in this thesis was on "Factors affecting the growth of the Textile Sector". The goal of research was to review the micro-environmental factors influencing the growth of the textile sector so the effect of the macro-environmental factors that plague the textile sector can be countered. The supplementary data was accumulated by consultation of literature in the libraries and the internet and also from the materials imprinted by different organizations of Pakistan. The studies suggested that among other factors that impact the Development of Textile Sector such as variety of looms, Raw Silk cotton production and Uncooked Cotton ingestion, the factors Yarn Creation and Number of Spindles have a substantial effect on the expansion of the textile sector.

CHAPTER 1

INTRODUCTION

This thesis identifies the micro environmental factors which may have a major effect on the Development of the Textile Industry. These factors include those elements in the immediate portion of businesses of the industry that have an effect on its performance such as creation, consumption and supply of recycleables. The textile sector or textile industry is thought as the industries involved in designing, manufacturing, circulation and use of clothing. The textile sector is technically regarded as growing or flourishing; if the textile mills are producing material at an increasing rate or the contribution of the textile sector to the GDP of the united states is increasing (i. e. creation of cotton fabric is increasing in the sector). Hence, the relationship linking the expansion of the textile sector with the creation degrees of the cotton cloth in the industry. The GDP of any country is defined as "THE FULL TOTAL Value of Goods and Services Produced in an Economy", so if the number of cotton cloth development is increasing or decreasing in Pakistan that directly would go to show that that the share of monetary contribution of the textile sector to the GDP of Pakistan keeps growing or declining respectively. You will discover varieties of variables both macro-environmental and micro-environmental that affect the performance or expansion of the textile industry such as the political, public, legal, economic and environmental issues. The textile sector or any other sector for example can only flourish or grow if the insurance policies of the government support the procedures of the industry on both the micro-environmental level and the macro-environmental level. For instance if the federal government policies regarding the industry are harmful to the cause such as placing a quota to the quantity of cloth that may be exported to other countries or on a more fundamental level of the supply string, restricting the type of cotton that can be used to produce material in the mills or if the expenses of financing the development is higher including the conditions prevalent throughout the market that would also result in a negative effect on the growth of the textile sector or if the inflation rate is beyond the predicted levels that would also cause the Pakistani towel to reduce its competitiveness in the market segments, both local and international. The macro-environmental factors impacting on the textile industry are enormously diverse such as the illiteracy rate that is widespread in the country and the trouble it causes in the form of level of resistance by individuals employed in the factories and mills to look at newer methods of production and systems, to the investment insecurity that is present in terms of your declining economy partially through poor government guidelines regarding businesses and partly through the common global recession that discourages the international shareholders to purchase an market that is one of the biggest manufacturers of textile products, to the physical insecurity that is present due to the rules and order situation.

This thesis however would be talking about the micro-environment variables that have an impact on the expansion of the textile sector. The Textile sector is a significant contributor to the overall economy of Pakistan; hence, it is vital to review the factors impacting the growth of the major industry because it reflects the state of the economic health insurance and macroeconomic guidelines that govern their state.

The textile sector progress is dependent on a number of factors. The raw natural cotton production and its own level of utilization affect the final product in the form of cloth. The amount of consumption if important since it specifies the number that stays throughout the market or quite simply, is not exported abroad. The number of looms and spindles is another major factor impacting the development of fabric because the larger the number of looms and spindles producing the towel and yarn respectively the bigger the produce of the textile sector is likely to be because the yarn production is in the end in found in producing cloth. Each one of these factors influence the production of cotton fabric.

CHAPTER 2

LITERATURE REVIEW

The changing account and map of the European union textile and clothing industry, this content talks about the changing framework of europe textile and clothing industry. A few of the primary reasons it mentions for the change include markets with often unstable and rapidly changing demand, limited product range and subject to swift obsolescence and limited scope for economies of level. EU still accounts for a large talk about of world exports and career despite increasing competition worldwide. Some of the textile and clothing firms were concentrating on this is the design and marketing and sub-contracting or out sourcing manufacturing, others focused on ingenuity, design and the making and advertising through their own networks.

Due to the lack of economies of scale firms tend to remain small, while small firms subsequently have limited access to finance. So all of this contributes to why the textile industry remains a specific small size in the EU, failing woefully to increase beyond it. (Dunford, 2002"The Changing Profile and Map of the European union Textile and Clothing Industry").

Skills and competitiveness: Can Pakistan Use of the low-level skills snare? This newspaper argues that Pakistan needs to dwell in to the higher value added, skill intensive and technologically advanced industries instead of the current low-level skills snare. Currently Pakistan is only concentrating on growing egyptian cotton and increasing it deliver but that's not enough if Pakistan has to compete with a technologically advanced world. The primary challenge to achieve that is to change the mind collection and develop establishments which recognize the value of buying people. (Rashid Amjad, 2005 "Skills and competitiveness: Can Pakistan Break out of the low-level skills trap?")

Demand for textile and clothing exports of Pakistan, this informative article expresses that textile and clothing stay an important factor in monetary development of countries and in Pakistan it is the largest commercial sector with respect to investment, occupation and export. The paper highlights various agreements which increased the gain access to of textile products of country to various marketplaces about the world. It compares the performance of textile industry of Pakistan with other developing countries in conditions of exports. The major buyer of Pakistan textile products is U. S. A. Although show of Pakistan's exports in world market has increased to 1. 1%, other developing countries had a considerable increase of upto 5%. The paper states the top features of Pakistan textile industry that major chunk of yarn stated in country is exported in its raw form where it can be utilized for creation of quality products such as cloth. Despite having the advantage of organic cotton and yarn production of superior quality the industry encounters obstacles in form of insufficient investment, capacity and qualified workforce. The newspaper creates a model on the textile industry of Pakistan and provides with the coverage suggestions in form of considerable restructuring in this liberalized and competitive trade environment.

This article focuses on the textile industry of Pakistan for it has played out an important role in the monetary development of this country, so that it needs to be built after and undergo significant restructuring to be capital intensive like it has been around the west for a while now. There is a need to concentrate on the quality of finished products instead of content spinning activity. The finished products include creation of the top quality fabric in textile mills. Reliance on low technology ability looms for the development of textiles should be reduced and the amount of shuttle less looms should be increased that have the capacity to create wider width superior quality cloth for the international market.

The reason behind focusing on the quality of completed products and the introduction of quality cloth which reaches the end of the manufacturing process is because apparels/garments supplies the highest value added product among the list of textile items, therefore maximum focus should be to the units producing apparel, however, the increase in cotton prices leading to proportionate increase in yarn price coupled with the upsurge in the expense of other inputs such as financial changes, electricity, labor, etc. has crippled the financial viability of the shuttle less weaving sector in Pakistan. To change to more capital intensive development in the textile industry, Pakistan must add sufficient well toned infrastructure in terms of communication, services, export methods, properly trained manpower, material inputs and transportation facilities. To improve the Pakistan's show in the global market would often be difficult.

The article gives the types of Hong Kong, South Korea and Japan. Pakistan has nearly 15000 looms whereas countries like South Korea and Japan has more than 50, 000 looms. But there exists more to them than just figures. Developed countries rely more than anything on the resource factors of international competitiveness. E. g. only low wages cannot guarantee a cost edge in textile production but there are many other factors like low capital costs and low energy costs. (Afia Malik, 2005 "Demand For Textile And Clothing Exports of Pakistan").

Aftab A. Khan and Mehreen Khan in this article "Pakistan Textile Industry Facing New Challenges" highlight the value of textile industry of Pakistan among the most contributing industry to the country's GDP. It identifies the major factors leading to the drop of industry which includes global recession, inner security hazards, high cost of production, higher financing cost, depreciation of rupee, and inflation rate. The newspaper provides with reports on textile industry of Pakistan and suggests that 60-70% of equipment needs replacement for attaining better quality of creation and cost efficiency. The downfall of industry added by the severe energy crisis in country, combined with the financial crunch and devaluation of rupee lead to higher costs of products imported for production purposes. This all business lead to unemployment in country and decrease in textile exports. The paper provides with the expectation that textile industry can b revived and rebuilt if federal facilitates the industry and certain options are taken for its betterment. It includes subsidies, understanding programs, energy alternatives, trainings and exploration of new potential markets. (Aftab A. Khan, Mehreen Khan, 2010 "Pakistan Textile Industry Facing New Obstacles").

Industrial Company and Technological Change: The Decline of the British Cotton Industry, this informative article by William Lazonick again targets the fact that failing to adjust to and compete with the changes in the international competition. The English industrialists were divided amongst themselves and didn't identify the composition and financial conditions of international competition. This review of the British isles cotton industry shows that a fundamental cause of Britain's relative drop from the late nineteenth hundred years was the shortcoming of its capitalists, divided as they were by competition and markets, to modify Britain's nineteenth-century financial structure to the conditions of twentieth-century international competition. The composition of industrial business which arose in the framework of Britain's unchallenged domination of world market segments in the mid-nineteenth hundred years left the next years of capitalists powerless, both individually and collectively, to supersede the marketplace so as to develop the coordinated managerial structures and present the high throughput production procedures that characterize the present day capitalist organization.

The article "Hike in POL prices to improve cost of creation" from the "Pakistan Textile Journal", Feburary-2010 concern highlights the negative impacts of upsurge in petroleum prices on the textile industry of Pakistan. The article speaks on the problems experienced by the textile industry of Pakistan throughout its lifetime. It suggests that with an impaired belief to be a terrorist express, the export based economy has suffered to a larger extent combined with the global recession. Moreover with less buyers aiming Pakistani textile marketplaces and financial turmoil has required the textile exports to decrease by 30 to 40% in a period span of 3 years in quantity terms, along with yet another negative growth in every sub industries of textile industry. Growing inflation, lower investment rate in textile sector, growing draw ups with higher cost of creation and power outage with higher energy costs, all rendered to a larger trade deficit for country and less international demand in previous few years. The exports in 2008-2009 slumped to $ 9. 95 billion where the goal was of $ 12 billion. Last but not least it claims that along with all issues faced by textile industry of Pakistan, electricity lack and higher petroleum prices would further increase problems for the industry as it'll make products less competitive and increase the cost of creation as prices of all commodities will skyrocket.

http://www. ptj. com. pk/Web-2010/02-10/Islamabad-Outlook. htm

The article "Pakistan faces a severe textile problems" is a statistical statement from "emerging textiles. com" 6th December, 2006, ponders on the problem encountered by Pakistan textile industry. It says that Pakistan textile industry has experienced a double digit development which is now over and several factors have added in this drop of textile industry, though the government has provided with a short research and development financing to support the industry but increasing energy and funding costs cannot prevent the industry from a severe turmoil. It also shows the increasing competition faced by other textile exporting countries like India, Bangladesh, China and Vietnam using their low cost products. Import tariffs on textile products and moving from the coverage of utilizing more yarn of country for value added products to export of raw yarn has again intensified the crisis situation for the industry. The article provides with complete figures of Pakistan textile exports from July2005 to June 2006.

http://www. emergingtextiles. com/?q=art&s=060906Pmark&r=free&n=1

In another article of Survey on Textile Industry of Pakistan it claims that the reason why for the drop of textile industry of Pakistan include surge in the rates of (EFS) export money scheme from 8. 5% to 9. 5% which is a rise of your 100 basis details. The second major reason it mentions is the climb in energy tariffs adding to the low option of the electricity. In addition was the fact that refineries could not provide furnace oil in the mandatory quantity to the energy generation companies which led to the low working time of the textile mills straight or indirectly. Another major blow originated from the surge in yarn prices, the natural material feeding the textile mills. The natural cotton prices increase from 2000 to 6600 per 40 kg due to the export of yarn, the yarn export will amount to 614 million kg (which represents 14% of textile exports this year 2010 versus 11% in 2009 2009).

Some of the other factors influencing the textile industry include increase in minimum wage, Double freight for Punjab & Khyber Pakhtunkhwa textile mills, Insufficient transport facilities and Tariffs & trade agreements. (Yasin Ahmed, 2010 "Textile Industry of Pakistan")

In another article "Pakistan lags behind in Techie Textiles" it is argued that the technical and economical impact of complex textiles in the industrially developed countries and their future contribution to the introduction of economics of recently expanding countries, such as China, South East Asia, and North Africa etc. Pakistan still lags behind in complex textile products as neither the federal government nor the textile industry has made any serious initiatives towards synchronizing textile products with the appearing needs of the world market by expanding higher value-added products. But the textile sector is the backbone of Pakistan's current economic climate, the Government as well as the textile industry has held their give attention to conventional textiles, ignoring complex textiles and knowledge-based products. (Noor Ahmed Memon, Noor Zaman, 2007 "Pakistan lags behind in Tech Textiles").

In this previous article of "Development of Textile Industrial Clusters in Pakistan" it mentions the reason why for drop of the natural cotton industry as out-of-date technology, poor equipment, insufficient skilled labor and reliance on the original Ustaad-Shagird method of training and due to which there's a high defect rate. (Muhammad Shahzad Iqbal et al. , 2010 "Development of Textile Industrial Clusters in Pakistan")

CHAPTER 3

METHODOLOGY

Research Type

The research is quantitative in mother nature. Basically it requires into consideration the data which is numerical in characteristics and the partnership purely depends on the data statistics of the factors such as Range of Looms, Volume of Spindles, Yarn Production, Raw Cotton usage and Raw Natural cotton production.

This research is exclusively dependent on supplementary data evaluation. Multiple Regressions would be run on the data of Volume of Looms, Number of Spindles, Yarn Production, Raw Cotton use and Raw Egyptian cotton production.

Sources of Data

Data on Amount of Looms, Quantity of Spindles, Yarn Creation, Raw Cotton usage and Raw Cotton production will be accumulated from World Development Indicators, Economic Review of Pakistan and APTMA.

Dependent Adjustable:

Factors influencing the expansion of the Textile Sector

Independent Factors:

OPERATIONAL DEFINTIONS

Textile Sector

The textile sector or textile industry is thought as the industries involved in designing, manufacturing, circulation and use of clothing. Although there is no-one known way of measuring this progress. Sometimes the amount of export of fabric is taken to be a measure of the development of the textile sector but officially that there surely is no one way because there is a huge amount of casual sector that will go unrecorded in the textile sector. The textile sector in this thesis is considered to be growing or flourishing; if the textile mills are producing towel at an increasing rate or the contribution of the textile sector to the GDP of the united states is increasing (i. e. creation of cotton towel is increasing in the sector).

Yarn Production

Yarn production fundamentally refers to the quantity of thread that is being made using the natural cotton that is harvested and harvested. It is the total quantity of the Yarn that is being stated in an economy. It is a direct way of measuring the Thread that has been made from the cotton that is accumulated and additional down this process of the resource chain the fabric is being created from this very Yarn. Yarn Production is measured in (000 Kgs). Generally it should have a good impact because this 3rd party variable is immediately related to the based mostly variable.

Cotton Production

Similarly the silk cotton production is simply the quantity of cotton that is being produced in an economy. This should also have a direct effect on the progress of the textile sector since both are positively related as the cotton production would rise so would the progress of textile sector.

Cotton Consumption

This variable basically measures the amount of cotton that has been produced and used in the neighborhood current economic climate. Since Pakistan is a natural cotton producing country, this varying measure the level of cotton that is being consumed and prepared by local ginneries and mills rather than being exported as Organic Cotton to other countries. Technically this will have a confident influence on the expansion of textile sector as organic cotton consumption in the local economy rises so would the expansion of textile sector.

Number of Spindles

This variable quite simply refers to the amount of Yarn producing spindles that are operating in the economy. This should also have a positive romance between the expansion of textile sector because as the number of yarn producing spindles goes up so does the power of the mills to produce cloth and therefore the expansion of the textile sector.

Number of Looms

This is similar in nature to quantity of Spindles; the sole difference is the fact it measures the number of material producing Looms that are being found in an market. If the amount of Looms would increase so would the material creation and the growth of textile sector

HYPOTHESIS

Yarn Production

H0: There is a significant marriage between Yarn Development and the growth of textile sector

H1: There is an insignificant romantic relationship between Yarn Production and the growth of textile sector.

Cotton Production

H0: There is a significant marriage between Cotton Creation and the expansion of textile sector.

H1: There can be an insignificant romantic relationship between Cotton Production and the growth of textile sector.

Cotton Consumption

H0: There's a significant romance between Cotton Use and the growth of textile sector.

H1: There is an insignificant romance between Cotton Ingestion and the growth of textile sector.

Number of Looms

H0: There is a significant romance between Range of Looms and the development of textile sector.

H1: There is an insignificant marriage between Number of Looms and the development of textile sector.

Number of Spindles

H0: There's a significant marriage between Range of Spindles and the progress of textile sector.

H1: There is an insignificant relationship between Number of Spindles and the expansion of textile sector.

TECHNIQUES

Simple statistical technique of Multiple Regression will be utilized for the analysis of this extra data. Multiple regressions will clarify the effect of independent variables on development of textile sector.

DATA ANALYSIS

For analyzing the data statgraphics will be used. Alongside detailing the connections between parameters and the quantity of variation that each variable is leading to, it will also provide the graphical analysis in graphical forms.

DATA INTERPRETATION

Statistical software such as Statgraphics which will be found in this thesis to interpret data. The P-values show the validity of the model and of each independent adjustable and the R-squared will make clear the degree of variation caused in the growth of the textile sector through the factors Number of Looms, Number of Spindles, Yarn Production, Raw Cotton intake and Raw Organic cotton production.

CHAPTER 4

RESULTS AND ANALYSIS

The centered variable is expansion of textile industry and the independent factors that are micro-environmental include Yarn Creation, Consumption of Raw Cotton, Cotton Production, the total quantity of spindles and the full total quantity of looms in Pakistan. The Yarn development has been chosen as an independent varying because theoretically speaking the development level of yarn is immediately proportional to the number of material that is produced. After that the consumption of Raw Egyptian cotton has been chosen as an independent variable because it is a significant representation of the number of cotton that stays in the economy and is consumed by the population of Pakistan rather than exported to other countries. Although the consumption of cotton specifies both mill and non-mill utilization of silk cotton, the non-mill usage of cotton is insignificant since it mostly presents the uses of organic cotton without the value addition for occasion usages of raw cotton for domestic uses such as natural cotton balls found in infirmaries for patients. So most of the cotton use technically shows the quantity of egyptian cotton that is processed in mills to create fabric or textile. The Silk cotton Creation again is a essential independent variable since it is straight proportional to the progress of the textile sector. The silk cotton produced is first ginned to separate the fiber content from the seed, the fiber continues on to be twined and twisted to create yarn and the yarn is then used to produced fabric so higher the number of cotton produced in an economy, the more the textile industry is likely to produce fabric. Multiple Regression research has been used as the statistical tool to develop and judge the amount of need for the relationship between your dependent adjustable and five self-employed variables.

The Regression formula is:

Growth of Textile = -20. 4196 + 0. 00338711*Consumption of Natural Material

+ 0. 00128728*Quantity of Looms + 0. 00227119*Quantity of Spindles +

0. 0191763*Organic Cotton Development + 0. 00932286*Yarn Production

The dependent variable (Y) over here in all these equation is the "Growth of Textile Industry" which has been predicted or described. The independent varying represented by (X) clarifies the Variance in Y. Every self-employed variable has its own beta coefficient that clarifies the comparative importance. The beta coefficient talks about the comparative change in the based mostly changing if the unbiased variable is improved by 1%. All variables show a confident relationship which is correct because all other independent factors are favorably related to the based mostly variable that is Growth of Textile Industry. If we evaluate the beta coefficients, a one percent change in the amount of Looms would result in a. 0012 percent development in the textile industry, if there is a one percent upsurge in the Number of Spindles it'll cause a 0. 022 percent growth in the textile industry. Evenly if there is a one percent increase in the yarn development it would result in a 0. 009 percent increase in the development of the textile industry. A one percent increase in the consumption of raw silk cotton would boost the progress of the textile industry by 0. 03 percent, which really is a significant percentage. Last but not least, the main one percent change in egyptian cotton production would cause a 0. 019 percent upsurge in the expansion of the textile industry.

The R-Squared statistic indicates that the model as fixed explains 95. 5788 percent of the variability in Progress of Textile. The modified R-squared statistic, which is more suitable for comparing models with different amounts of independent variables, is 91. 1576%. The P-value of the model is 0. 0021. Because the P-value is less than 0. 01, there is a statistically significant romance between the variables at the 99 percent assurance level. The average person p-values of the indie parameters will determine the partnership between each self-employed changing and the dependent variable. If the value is above 0. 1 then your romance is insignificant and the alternative hypothesis will be declined. Based on the model, Range of Spindles and Yarn Production have p-values significantly less than 0. 1. The p-value of Amount of Spindles is 0. 0070 and the p -value of Yarn Development is 0. 0022. Hence the null hypothesis (H0) for these two variables are rejected and the different hypothesis (H1) will be accepted. Based on the results, the p-value of Consumption of Raw Materials, Variety of Looms and Fresh Cotton Production is more than 0. 1 so the null hypothesis for these parameters is accepted and the different hypothesis will be turned down.

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