The Prospects for Sialkot

Enterprise - - Trade tips -

The sports goods in­dus­try in Sialkot, pro­duc­ing qual­ity prod­ucts mainly for for­eign mar­kets, is over a cen­tury old. It is a labour-in­ten­sive in­dus­try pro­vid­ing di­rect and in­di­rect jobs to about 60,000 work­ers. Here sub-con­tract­ing work on piece ba­sis is a com­mon prac­tice, pro­vid­ing in­come for more peo­ple. A ma­jor por­tion of the pro­duc­tion comes from cot­tage and small scale man­u­fac­tur­ing units. Some units have joint ven­ture col­lab­o­ra­tions with for­eign man­u­fac­tur­ers and pro­vide tech­ni­cal and mar­ket­ing sup­port to their for­eign part­ners.

Presently, Pak­istan is com­pet­ing with In­dia, Ja­pan, Tai­wan and South Korea in in­ter­na­tional mar­kets. In­dia has the ad­van­tage of cheaper labour and raw ma­te­rial, whereas coun­tries with semi­au­to­matic mech­a­nized units can pro­duce low-cost and in­ex­pen­sive sports gear such as metal rack­ets and cricket bats, etc.

Since the en­try of Ja­pan, Tai­wan and Korea, the in­dus­try is tilt­ing to­wards mech­a­niza­tion and the use of mod­ern equip­ment, which has re­sulted in tougher competition for man­u­fac­tur­ers and ex­porters of sports goods from Sialkot.

Sta­tis­tics show that the ex­port of sports goods from the coun­try reg­is­tered an in­crease of 11.92 per cent dur­ing the last seven months of the cur­rent fi­nan­cial year. Ac­cord­ing to data from the Fed­eral Bu­reau of Statis­tic (FBS), sports goods in­clud­ing foot­balls, gloves and other prod­ucts worth US$ 16.70 mil­lion were ex­ported from July 2010 to Jan­uary 2011.

Like the pos­i­tive out­come of ex­ports, profit mar­gins are ex­cel­lent in the sports in­dus­try as well. If a whole­saler pur­chases a con­tainer of sports goods for Rs.1 crore, he can eas­ily sell it in the lo­cal mar­ket within 15 to 30 days on a mar­gin of 15% to 20%, mean­ing that he can earn Rs. 15 to 20 lakhs in some 30 days.

The sit­u­a­tion is chang­ing, though. Like any other in­dus­try around the world these days, the sports goods busi­ness is also dom­i­nated by Chinese prod­ucts. Pre­vi­ously, the mar­ket in Sialkot was be­lieved to be very strong in sports man­u­fac­tur­ing, pro­duc­ing qual­ity prod­ucts even for World Cup matches. The mar­ket is now caught in the del­uge from China with prod­ucts avail­able at much lower prices. A few items are still avail­able in the mar­ket man­u­fac­tured by the lo­cal in­dus­try. The poor law and or­der sit­u­a­tion in the coun­try also con­trib­utes neg­a­tively, be­sides the ab­sence of a cen­tral au­thor­ity to reg­u­late pric­ing is­sues. The lack of play­grounds in the coun­try is also ad­versely af­fect­ing the once pros­per­ous busi­ness.

En­trepreneurs in Pak­istan’s sports goods in­dus­try, most of them lo­cated in Sialkot, must think hard and gird up their loins to com­pete on the one hand from the Chinese in­va­sion as well as the hi-tech pro­duc­ers from Ja­pan, Tai­wan and South Korea

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