» Projects: Asia and the Pacific

Integrated Value Chain Analyses of Strategic Sectors in Pakistan

Global Development Solutions identified key issues and provided detailed channel mapping of critical competitiveness inhibitors in the cotton-to-garment, dairy, and automotive parts industries, as well as in the marble (mining and processing), shrimp and apple processing sectors. In the jeans manufacturing sector, for example, insufficient in-house design capabilities and lack of skilled workers to implement new manufacturing techniques were hindering the sector’s ability to move up-market to higher value-added jeans. The lack of training and skills adversely affected productivity levels of the small and medium scale jeans makers.

Other issues identified were:
  • Production losses: Excessive production losses (e.g. up to 20% in the dairy sector due to improper chilling).
  • Water: Poor water quality is responsible for a significant portion of wastage in the shrimp and dairy sectors.
  • Training, skills and knowledge: Inadequate investment in labor skills is a recurring issue in all sectors studied.
  • Debilitating duty valuations: Government fees, including duties and other import charges, increase the cost of importing raw material by 7.6% in some segments of the automotive value chain.
For a small-to-medium size (up to 200 employees) garment manufacturer, the delivered price of a standard 12oz pair of jeans is US$4.17. While this price is lower than that of large scale exporters, this jeans type cannot be sold to specialized clothing outlets but are instead sold to large retailers like Wal-Mart that attract price sensitive rather than fashion conscious clients. As compared to up-market jeans that can be sold to international buyers for up to US$8 to US$10 per pair, the standard jeans sold by the small to medium jeans manufacturers fetch a maximum of US$4.5 to US$5 per pair. In contrast to large scale jeans producers, the value addition structure of small-to-medium companies is skewed towards higher share of labor in all the important processes such as sewing/assembly and washing.