Govt to woo global brands like Walmart, Target, Macy's under 'Made in Pakistan' initiative

• Govt to meet first 6 months of costs via upfront financing from EDF.
• 97% of sourcing in Pakistan is done by China and Vietnam.
• Only 48% of US apparel firms are sourcing from Pakistan

ISLAMABAD: The government has decided to support and bring major international brands to Pakistan by allowing them to increase sourcing with local enterprises in their joint ventures, under the ‘Make in Pakistan' initiative, The News reported on Monday.

These global brands, under this initiative, will then get a chance to incentivise their physical presence in Pakistan with the help of office spaces for their business outlets. 

A senior official of the Commerce Ministry told The News that the government's plans include meeting the first six months of costs via upfront financing from the Export Development Fund (EDF).

Only 48% of US apparel firms are sourcing from Pakistan, compared to 97% from China and Vietnam, 83% from Bangladesh, and 76% from India. However, in the wake of a perpetual trade war between the US and China, US firms are visibly shifting their sourcing from China to other countries, and keeping in view this fact, the authorities in the commerce ministry have accelerated their efforts to allure more US companies to go for sourcing from Pakistan.

According to the USFIA Fashion Industry Benchmarking Study, based on surveys of 30 leading US fashion companies, 69% of firms express optimism or cautious optimism about the US fashion industry over the next five years. Their expansion plans indicate the growing importance of supply chain management risk mitigation, and environmental sustainability.

The US fashion industry is shifting from “China plus Vietnam plus many” to “Asia plus Rest of the World”; finding a new sourcing base other than China is a top priority for US fashion firms with nearly 80% of firms planning to reduce apparel sourcing from China over the next two years.

This presents two opportunities for Pakistan which include directly increasing sourcing to international firms looking to reduce sourcing from China and catering to Chinese firms looking to outsource their production outside China.

Pakistan’s textile and apparel industry leaders will hold a ‘Make in Pakistan’ roadshow in the Heimtex exhibition to be held on 9-12th January 2024 in Frankfurt, Germany, to woo foreign industry leaders to increase their physical presence of sourcing houses in Pakistan.

The country’s industry kiosks will be built in the Heimtex exhibition to showcase export capacity and capability. Pakistan businessmen will increase their networking with global textiles and apparel industry leaders. The roadshows will also be held in January and February at various international cities Paris, Miami, New York, and Los Vegas.

During the ‘Make in Pakistan’ roadshows, the country’s business leaders will target high-priority international firms for sourcing purposes such as Nike Inc, which has an annual revenue of $44.5 billion; TJX companies $4.5 billion; Walmart $559.2 billion; Target Minneapolis $93.6 billion; Macy’s New York $17.3 billion; Nordstrom, $15.0 billion; Dick’s Sporting Goods, $9.6 billion; American Eagle Outfitters $3.75 billion; Abercrombie & Fitch $3.71 billion; PVH Corporation $9.1 billion; VF Corporation Denver, $10.5 billion; and Gap Inc. $16.4 billion (2020).

Other brands include Mango Barcelona, $2.1 billion; Primark (part of Associated British Foods) Dublin $10.6 billion; Adidas AG Herzogenaurach, $27.2 billion; Inditex Arteijo, Spain $24.3 billion; C&A (C&A Europe) $7.2 billion (2020); H&M (Hennes & Mauritz) Stockholm Sweden $21.5 billion; Fast Retailing Companies Ltd $20.6 billion; Anta Sports Products Ltd Jinjiang, China $6.7 billion, Boohoo Manchester, UK $1.6 billion; John Lewis, UK $13.8 billion; ASOS London, UK $4.4 billion; River Island London, UK $1.1 billion; Next Plc Enderby, UK $5.5 billion; Marks & Spencer London, UK $12.4 billion; and JD Sports (sports apparel) Bury, with annual turnover UK $8.4 billion.