In the evolving Textile Value Chain (TVC) of Pakistan, the key to sustained exports lies in the traceability of the supply chain. Beyond being a cornerstone of the country’s economy, the TVC stands as its largest and one of the oldest manufacturing industries, contributing approximately 60% to the nation’s total exports and playing a crucial role in international trade.

Directly engaging nearly 40% of the manufacturing labour force — approximately 3 million people — and indirectly impacting 9 million more, the industry impressively contributes 8.5% to the GDP.

As the TVC navigates the complexities of integrating traceability into its operations, it faces a transformative journey that aligns with global trends, where traceability is not only a regulatory imperative but a strategic tool for optimizing business operations and ensuring accountability in far-reaching supply chains.

This way or the other, Pakistan needs to expand its market to sustain its export, and for this traceability through integrated factories is an inescapable component.

While textiles have long been a major player in Pakistan’s economy, approximately 80% of firms still operate in a non-integrated structure. Nevertheless, the industry successfully exports 70% of its total output.

In the integrated sectors, each participant contributes to the value addition of textile goods. The paradox of a long-standing economic powerhouse with predominantly non-integrated factories highlights both the resilience and challenges encountered by the Textile Value Chain (TVC) in Pakistan.

According to the records of the Textile Commissioner’s Organization, the textile sector comprises 408 units, including 40 composite and 368 spinning units. Together, these units house 13.414 million spindles and 140,000 rotors, with 9.5 million spindles and 112,600 rotors currently operational. The reported capacity utilization rates for spindles and rotors during July to March in fiscal year 2023 are 69.33 percent and 71 percent, respectively.

Pakistan is the fifth largest producer, third largest consumer and 4th largest exporter of cotton yarn in the world; however, the average size of spinning mills in Pakistan is comparatively smaller than the global standard, rendering them less competitive, particularly with small spinning units lacking modern technology and producing yarn counts below global market demands.

Integrated textile factories offer several advantages that contribute to their operational efficiency and product quality. Firstly, they achieve cost efficiency through economies of scale. They control the entire production process from raw materials to finished products, thereby reducing overall costs, especially through the avoidance of turnover tax at each stage.

Secondly, integration provides better control over the supply chain, ensuring efficient and streamlined operations. This leads to consistent quality throughout the production process, as integration allows for rigorous quality control measures. Additionally, the interconnected nature of integrated factories facilitates easier traceability, promoting accountability for each stage of production.

However, it’s important to acknowledge the disadvantages of integrated facilities as well. Firstly, establishing and maintaining such factories can be capital-intensive.........

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