Pakistan’s largest shoe manufacturer – Bata Pakistan has stated that although low-priced imported footwear from China is appearing in Pakistan’s domestic market, the threat posed by these imports is not increasing.

On releasing the company’s 2005 annual financial report, Jorge Carbajal, chairman of Bata Pakistan, said, The influx of low-priced Chinese footwear has continued, but does not appear to be escalating at the same pace due to rising costs in China as a result of high prices for oil-based raw materials and increasing labour costs. The zero rating for sales tax of leather and textile footwear after the June budget in Pakistan has had a positive effect in these categories of footwear, and it is hoped that government will continue this policy so as to assist the domestic manufacturing industry.”

However, he also pointed out that it is becoming increasingly difficult for registered legitimate manufacturers to operate and compete in the high volume categories of the footwear sector such as thongs, PVC injected shoes and injected EVA stating, Many new players have entered the market over the last two years and there is now a gross oversupply situation resulting in prices for the products plummeting in spite of continued higher raw material prices."

Bata Pakistan reported an increase in overall turnover of 12% for the full year, despite a poor first quarter and the negative effects following the earthquake last year. Exports continued to perform well rising to Rs200 million ($3.33 million) in 2005, from Rs173.4 million in 2004.

The company produced a total of 10.7 million pairs, 1.6 million pairs fewer than in the previous year. Most of the lost production occurred at its EVA thong unit and its plastic injection plant.