Spinning Sector Overview

. SPINNING | A BRIEF OVERVIEW The spinning sector is at mature stage and enjoys a long operating history in the country. PACRA • • • . . The spinning sector is divided into two segments, i). Organized segment and ii). Unorganized segment. Unorganized segment roughly accounts for ~40-50% of total spinning capacity. No conclusive figures are available on the share of each of these sub-segments in the total spinning sector. Our focus is on organized segment in this sector study. Overall, the structure of the sector is competitive, represented by many players of different sizes making homogeneous commoditized products. The price variation in local yarn prices come from quality and some differentiation (dyed yar, blended etc.) The major export destinations of the sector are other China, Asian & South Asian countries which utilize yarn as an input in the manufacturing process. There are ~80-100 players in the organized segment in operations. On average, players have installed capacity of ~40,000-50,000 spindles. Players having installed capacity of <30,000 spindles are considered small sized, between 30,000 to 60,000 are medium scale, and >60,000 are large scale manufacturers. Minimum installed capacity in organized segment is ~20,000 spindles. The large manufacturers enjoy economies of scale resulting in efficiency and higher margins than peers. Textile cluster represents ~20.9% weight in Large Scale Manufacturing (LSM) index with spinning sector having ~13% weight in LSM index. The spinning sector contributed an estimated 2.6% in the overall GDP of the country. 7 Source: PBS, SBP, TCO, PACRA Database

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