Professional Documents
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API Sports Sarosh Ifrah Navera
API Sports Sarosh Ifrah Navera
API Sports Sarosh Ifrah Navera
On
SUBMITTED BY:-
DATE OF SUBMISSION:
Dec. 7th’10
LETTER OF TRANSMITTAL
The attached report requested by Mr. Qazi Adnan Hye to find out the “Role of Sports Industry in
Pakistan’s Growth”.
We used secondary data for the last ten years available at the relevant websites for this project.
We would be pleased to discuss the report at your request and we thank you for delegating this
task to us.
Sincerely,
Sarosh Anjum
Ifrah Tariq
Naveera Sohail
TABLE OF CONTENTS
COURSE: ANALYSIS OF PAKISTANI INDUSTRIES................................................................1
COURSE CODE: MAN408C.........................................................................................................1
SUBMITTED BY:-......................................................................................................................... 1
SAROSH ANJUM (8181)...............................................................................................................1
IFRAH TARIQ (7937).................................................................................................................... 1
NAVEERA SOHAIL (7551)........................................................................................................... 1
LETTER OF TRANSMITTAL.......................................................................................................2
EXECUTIVE SUMMARY.............................................................................................................4
OVERVIEW....................................................................................................................................5
STRUCTURE OF INDUSTRY...................................................................................................... 5
ECONOMIC IMPACT....................................................................................................................5
SOCIAL IMPACT.........................................................................................................................12
SWOT ANALYSIS....................................................................................................................... 14
STEPS TO OVERCOME CHALLENGES.................................................................................. 18
RECOMMENDATIONS...............................................................................................................19
BIBLIOGRAPHY.........................................................................................................................20
http://www1.american.edu/ted/nike.htm.......................................................................................20
http://www.america.gov/st/democracyhrenglish/2005/May/20080818091032SrenoD0.3
0423.html...................................................................................................................................... 20
APPENDIX...................................................................................................................................21
EXECUTIVE SUMMARY
This report is about the “Role of Sports Industry in Pakistan’s Growth”. The purpose of this
report is to find out the economic and social impact of this industry for Pakistan. We found out
exports from US$ 302.723 million in 2007-08 declined to US$ 273.318 million in 2008-09,
showed a decrease of (-9.71%) while export increase took place in USA, Belgium, Italy, UAE
and Turkey. Offset by markets of Germany, UK, Spain, Netherlands and Denmark, where
declining trend is appeared. We did a SWOT analysis to know that either the industry is
profitable or not. We used secondary data for the last ten years available at the relevant websites
for this project. We calculated percentage, mean, frequency, variance and standard deviation for
this project’s analysis. We showed our findings in tables, pie charts and bar graphs. Different
problems related to the industry have been discussed and possible solutions are recommended.
OVERVIEW
Sialkot is known world over for its expertise in manufacturing and export of sports goods and
accessories for the past 100 years or so. The city was a hub of sports goods manufacturing even
before the independence. It bravely passed through the turmoil created by fleecing capitalists
and investors and proved to the world that the skilled hands can establish and run any business
rather than mere power of capital. The products are mostly made for international market and
have received worldwide recognition merely because of the care that goes into selection of raw
material, designing and manufacturing. International linkages of cluster were developed mostly
in the British colonies.
The basis of sports industry of Sialkot was laid in 1893 during the British era. It prospered and
cricket bats were supplied to different parts of Asia in early 1900's. This local industry proved its
mettle by winning the British empire sports award. The soccer balls manufactured in Sialkot
came in lime light when the “Tango Ball” from Sialkot was used in the 1982 FIFA World Cup.
This opportunity opened doors for international sports industry in Pakistan. Pakistan earned the
prestigious award of being the official soccer balls supplier in the year 1994 and 1998.Now
almost all the big giants of sports industry including Adidas, Nike, Puma, Select, Lotto employ
the services of manufacturers of Sialkot Sports industry ;further enhancing the credibility of this
area as potential exporter of sports goods. About 99% of sports goods, exported by Pakistan, are
prepared in Sialkot. The industrial city of Sialkot in Punjab province is internationally known for
its sports goods. Sialkot's hand-stitched-ball industry, with nearly 50,000 stitchers, is a big
business.
STRUCTURE OF INDUSTRY
The sports industry of Pakistan is mostly concentrated in Sialkot. There are over 3,000 small and
medium sized sports goods industrial units, and some 50 hi-tech well established industries
functioning in Sialkot. These companies fall into four categories:
Export of sports goods increased from $136 million in 1990-91 to $384 million in 1997-98.
Showing an average increase of 23 per cent annum as evident from table. The export market for
sports goods is fairly diversified. More and more countries are being added to the list of their
imports. In 1990-91 there were in all 50 countries importing these good from Pakistan.
CONTRIBUTION IN GDP
VALUE IN MILLIONS
Year (Rs.) $
1990-91 3,099 136
1991-92 3,515 141
1992-93 3,423 131
1993-94 6,028 199
1994-95 8,165 264
1995-96 8,375 248
1996-97 12,131 309
1997-98 16,593 234
There was mix trend in last ten years exports of sports. The exports went up especially during
the FIFA and other tournaments.
Source :FBS
EXPORTED ITEMS
• Hockey stick
• Sports gloves
• Polo sticks
• Cricket bats and balls
• Kits bags
• Volley balls
• Tennis racquets
• Footballs
• Most of the well-known sports companies like, Adidas, Nike, Puma etc. get sports
equipment prepared in Pakistan.
CONCENTRATION OF EXPORTS
During current fiscal year 2009‐10, country’s major exports followed previous years’ trend of
being concentrated in five items (cotton manufacturers, leather, rice, synthetic textile and sports
goods).These five categories accounts for 70.9 percent share in the total exports during July‐
March 2009‐10.
In last two years Pakistan has exported footballs (complete), gloves sports and other sports
goods. The value of complete football was the highest among other categories.
COUNTRY
INCREASE
JULY-JUNE ($)
2009-10 2008-09 VAR.
GERMANY 43,016 34,096 8,920
U.S.AMERICA 42,847 38,135 4,712
UNITED KINGDOM 19,535 17,284 2,251
ITALY 15,512 13,970 1,542
NETHERLANDS 14,413 12,729 1,684
MEXICO 9,825 6,145 3,680
SOUTH AFRICA 8,337 4,346 3,991
FRANCE 8,197 6,947 1,250
BRAZIL 6,606 5,057 1,549
FINLAND 6,045 4,681 1,364
AUSTRALIA 5,293 4,481 812
RUSSIAN FED. 4,359 3,482 877
CANADA 4,320 4,105 215
SWEDEN 4,225 3,871 354
SAUDI ARABIA 3,341 3,178 163
UKRAINE 2,590 1,568 1,022
GREECE 2,278 2,036 242
IRELAND 1,834 1,510 324
KOREA, REP. OF 1,514 776 738
CHINA 1,101 889 212
BANGLADESH 490 255 235
INDIA 418 250 168
DJIBOUTI 389 55 334
PHILIPPINES 256 210 46
BAHRAIN 232 180 52
INDONESIA 133 70 63
CO,TE
D,IVOIRE(FR.IV 112 72 40
YEMEN 86 35 51
IRAN ( ISLAMIC R.) 68 61 7
VIET NAM 67 7 60
GUINEA 4 - 4
OTHER COUNTRIES 17,743 15,745 1,998
TOTAL 225,186 186,226 38,960
Export has increased numerously in Germany, Mexico, S Africa, UK and USA.
JULY-JUNE
COUNTRY 2009-10 2008-09 VAR.
GERMANY 43,016 34,096 8,920
U.S.AMERICA 42,847 38,135 4,712
SOUTH AFRICA 8,337 4,346 3,991
MEXICO 9,825 6,145 3,680
UNITED KINGDOM 19,535 17,284 2,251
Total 123,560 100,006 23,554
The export of sports has declined in the last two years in following countries:
COUNTRY
DECREASE
JULY-JUNE ($)
2009-10 2008-09 VAR.
BELGIUM 18,636 19,940 (1,304)
SPAIN 12,360 12,771 (411)
U.A.E. 10,981 11,036 (55)
DENMARK 7,648 9,017 (1,369)
JAPAN 4,003 4,395 (392)
ARGENTINA 3,754 4,974 (1,220)
TURKEY 3,470 5,656 (2,186)
POLAND 2,020 2,302 (282)
CHILE 2,013 3,348 (1,335)
NORWAY 1,718 3,170 (1,452)
PORTUGAL 1,645 1,741 (96)
MALAYSIA 1,167 3,652 (2,485)
KUWAIT 658 741 (83)
EGYPT(U.A.R.) 647 890 (243)
THAILAND 519 523 (4)
HONG KONG 443 543 (100)
KENYA 407 421 (14)
QATAR 276 406 (130)
SRI LANKA 213 609 (396)
OMAN 134 171 (37)
SUDAN 91 240 (149)
U.R.OF
TANZANIA 62 163 (101)
AFGHANISTAN 58 149 (91)
IRAQ 44 143 (99)
MAURITIUS 8 26 (18)
MOZAMBIQUE 2 59 (57)
BENIN - 6 (6)
TOTAL 72,977 87,092 (14,115)
The export has declined numerously in Chile, Denmark, Norway, Turkey and Malaysia.
JULY-JUNE
COUNTRY 2009-10 2008-09 VAR.
MALAYSIA 1,167 3,652 (2,485)
TURKEY 3,470 5,656 (2,186)
NORWAY 1,718 3,170 (1,452)
DENMARK 7,648 9,017 (1,369)
CHILE 2,013 3,348 (1,335)
Total 16,016 24,843 (8,827)
3. BRINGS REVENUE
USA s the major buyer of these goods along with UK, Germany, Hong Kong, France, Japan,
Korea, Italy, and Norway. Major sports goods items traded around the world include gym
fitness equipment (US$4.4 billion imports); articles and equipment for sports and outdoor
games (US$3.6 billion imports); golf equipment and balls (US$3 billion imports); snow skis,
equipment and wear (US$1.9 billion imports) and inflatable balls (US$0.9 billion imports).
4. CONTRIBUTION IN TAX
The tax contribution from this sector has declined from 2000 to 2006. This was mainly due
to the decline in exports.
It is a labor-intensive industry providing direct and indirect job opportunities to about 60,000
workers. Further employment is generated by sub-contracting of work on a per piece rate.
This clearly indicates the importance of this industry in the national development of our
country.
COMPETITION
The major producers of sports goods globally are China, Indonesia, Thailand and Hong Kong.
These Asian suppliers have taken over significant proportions of the world’s production as a
result of lower labor costs.
China is now a massive producer and, in terms of export, dominates all other producers. It is the
top exporter of all the sports goods items exported by Pakistan. Italy is also a major exporter of
ski suits and swimwear, as is Thailand of tennis and golf balls.
Looking at the sports goods sector as a whole (as per the classification above), global imports
added up to over US$17 billion in 2005, up sharply from US$12 billion in 2001. The US is the
world’s major buyer followed by the UK, Germany and Hong Kong. France, Japan, Korea, Italy
and Norway are also important markets at the global scale.
Major sports goods items traded around the world include gym fitness equipment (US$4.4
billion imports); articles and equipment for sports and outdoor games (US$3.6 billion imports);
golf equipment and balls (US$3 billion imports); snow skis, equipment and wear (US$1.9 billion
imports) and inflatable balls (US$0.9 billion imports).
Cricket, hockey, polo and baseballs China is the world’s leader for this sports goods category,
holding 50% share of world exports while Pakistan and India have a mere 8% and 6%,
respectively. China’s major markets are the US and Japan, while Pakistan supplies more to
Europe, and India to both the US and Europe, with the UK its major buyer.
Pakistan is not well positioned in this sense since the US represents 40% of the US$300 million
import market while the Netherlands and Germany, Pakistan’s main export destinations for this
product, represent a mere 4% of world imports together. The UK, Korea Rep. and Japan each
represent 5% of world imports. In terms of growth, the US is not the leader and in fact its 40%
market share is reducing. Markets showing very rapid growth include Ireland, Poland and
Honduras.
This product is of major significance in the world trade in sports goods, representing a US$3.8
billion import market. Therefore, it is important to get a clear understanding of how the major
buying countries interpret the definition of this product category. Their interpretations have to go
way beyond mere wicket stumps and pads to be a billion dollar business. China, Taiwan and the
US are the major players in this market. Global exports of this category were estimated at $3.4
billion in 2005. China’s exports are geared towards the US, France and the UK. Taiwan is
supplying to the US, Japan and the UK, and the US is supplying to Canada, Japan and the UK.
The world’s main importers are the US, France and the UK. Total value exported in 2005 was
US$3.8 billion (CIF) and reported an annual growth rate of 10%.
SWOT ANALYSIS
STRENGTHS
• Dynamic and reliable linkages in international markets due to long history of working in
international markets.
• Focus on niche marketing by providing customized products.
• Entrepreneurial culture directed towards exports.
• Flexibility in production runs with quick turnaround time.
• Reliance on other complimentary products.
• Strong logistics infrastructure
a. Sialkot dry port
b. Sialkot international airport (under construction)
WEAKNESSES
OPPORTUNITIES
EXPORTS CHANGE
YEAR ($ M) VALUE %
298,16
2009-2010 3
273,31 24,8
2008-2009 8 45 9.09
273,31
2008-2009 8
43,9 1
2007-2008 229,400 18 9.14
2. CHILD LABOR
This stigma of child labor resulted in plummeting support and demands for our goods in the
international market. In fact many multinational companies cancelled their agreements with
Pakistani companies resulting in a crisis situation for the local industry. Children as young as
eight years old were working in this billion dollar industry for decades due to being cheap labor.
At last the Pakistan National Assembly ratified the U.N. Convention of the Rights of a Child in
1989 and passed two labor laws to curb the international pressure. The first was The
Employment of Children Act of 1991 that prohibited the use of child labor under the age of 14 in
any hazardous employment in a factory or mine. The second was The Bonded Labor Act of 1992
that ended bonded labor.
The negative trend in the exports in the last 2 years owes much to the global financial crisis.
The security situation in the country and energy crisis has hit the manufacturing sector of
Pakistan hard.
5. ASIAN COMPETITORS
Pakistan is now facing serious challenges from India, China, Taiwan, and South Korea in
international markets. India and China have an advantage of cheap labor and raw material while
countries like Taiwan, Japan and South Korea are experts in mechanization and use of modern
equipment.
Chinese sports industry is growing at a rate of 8% every year. It holds 50% share in the sports
market of cricket, hockey and baseball, while Pakistan and India merely have a share of 8% and
6%.
6. WEAK MANAGEMENT
The companies in Pakistan are of small size with weak management system. This greatly
hampers their ability to fulfill big orders. The products are still very much of the past and
product innovation is lagging severely when we compare it to the international market.
STEPS TO OVERCOME CHALLENGES
1. SCCI & PSGMEA
The Sialkot Chamber of Commerce and Industry (SCCI) and Pakistan Sports Goods
Manufacturers and Exporters Association (PSGMEA) have jointly established a Sports Industry
Development Trust to support local hand stitched soccer ball manufacturers and exporters
against the threat of mechanized balls. At the same time three important projects namely Sports
Industries development Centre (SIDC), Product Development Centre for Composite and Sialkot
Business and Commerce Centre have been initiated to adopt the new technology of mechanized
ball which is posing serious threats to hand stitched inflatable soccer ball.
2. SMEDA
It is proposed that surgical instruments, sports goods & cutlery sector would be granted 25
percent subsidy on brand promotional expenses like advertisement in recognized trade journals,
certification cost etc.
RECOMMENDATIONS
Provide Education
Health care
Raise wages
Technology up-gradation & capacity building
Determined to contribute to the efforts for human progress and reduction of poverty
Government must establish unit in different cities so that the production can be
increased which will increase our exports.
• The information dissemination system in our country is far from being satisfactory and is
seriously hampering the growth of this industry. In this regard Trade Development
authority and Ministry of Commerce should collaborate with relevant agencies, e.g.
Chamber of commerce, trade associations, and provincial government's WTO cells in
order to train and guide the local manufacturers about the opportunities, threats, and
challenges of WTO system and to generate awareness about various sectors.
• The funds from Export Development Fund (EDF) should be channelized in establishing
long term relations with potential clients and devising various schemes to help the
exporters in becoming competitive at international market.
• We are living in world of Laissez Faire where economic competitiveness is the rule of
the game. So competitiveness of this sector should be the sine quanon. This can be made
possible by reducing reliance on subsidies and monetary support should be discouraged.
• Only those firms should be allowed to export who have a certain minimum amount of
capital. This can be made possible by a regulatory framework. In this way resource and
energies can be better utilized.
• Efforts are needed to strengthen trust between public and private sector organizations.
• Skilled Human labor is the key to success. Effective policies should be devised for the
development of human resource with better skills, both at managerial and technical
levels.
BIBLIOGRAPHY
Article: The Sports Industry of Pakistan and Challenges of a New Century-U trade
Magazine-June 2010.mht
http://www.epb.gov.pk/v1/index.php
http://www.oppapers.com/essays/Sport-Facility-Management/128005
http://www1.american.edu/ted/nike.htm
http://www.america.gov/st/democracyhrenglish/2005/May/20080818091032SrenoD0.3 0423.html
APPENDIX
Last two years detailed export data
AFGHANISTAN GLOVES 5 0 5
OTHERS 50 65 -15
FOOT BALLS -81
COMPLETE 3 84
Total 1 -91
58 49
BANGLADESH GLOVES 11 6 5
(SPORTS)
OTHERS 4 226 209
35
FOOT BALLS 21
COMPLETE 44 23
Total 490 255 235
SRILANKA GLOVES 53
(SPORTS) 54 1
OTHER (SPORTS) 1 2 -49
59 08
FOOT BALLS 3 -399
COMPLETE - 99
Total 2 6 -395
13 08
INDIA GLOVES 17
(SPORTS) 45 28
OTHER (SPORTS) 2 1 160
73 13
FOOT BALLS 1 1 -9
COMPLETE 00 09
Total 4 2 168
18 50
KOREA GLOVES 2 1 80
(SPORTS) 49 69
OTHER (SPORTS) 1 1 16
34 18
FOOT BALLS 1,1 4 642
COMPLETE 31 89
Total 1,5 7 738
14 76
IRAN GLOVES 4
(SPORTS) 19 15
OTHER (SPORTS) 18
24 6
FOOT BALLS -15
COMPLETE 25 40
Total 7
68 61
KENYA GLOVES 11
(SPORTS) 15 4
OTHER (SPORTS) 7
93 86
FOOT BALLS 2 3 -32
COMPLETE 99 31
Total 4 4 -14
07 21
PHILIPPINES GLOVES 1 1 44
(SPORTS) 92 48
OTHER (SPORTS) -3
55 58
FOOT BALLS 5
COMPLETE 9 4
Total 2 2 46
56 10
PORTUGAL GLOVES 3 3 32
(SPORTS) 58 26
OTHER (SPORTS) 3 4 -140
07 47
FOOT BALLS 9 9 12
COMPLETE 80 68
Total 1,6 1,7 -96
45 41
DJIBOUTI GLOVES 6
(SPORTS) 6 -
OTHER (SPORTS) 1 157
62 5
FOOT BALLS 2 171
COMPLETE 21 50
Total 3 334
89 55