New plants signal a shift from volume to technology in Pakistan’s largest export sector.
The Punjab government has opened two new textile factories in the Challenge Special Economic Zone, aiming to move Pakistan’s textile industry up the value chain and revive export momentum through more advanced production. The projects, developed by Challenge Apparel Group, are expected to create thousands of jobs and introduce fabric technologies not previously produced in the country.
One of the factories will manufacture an advanced textile product being made in Pakistan for the first time, according to details released by the Industries, Commerce and Investment Department Punjab. The units are scheduled to begin production within a year, with advanced machinery already on order.
The expansion builds on the launch of the Challenge Group Special Economic Zone in August 2025, following the company’s pledge to invest $100m over five years. Officials estimate that the initiative could generate up to $400m in exports, while supporting technology transfer, skills development and more sustainable industrial growth.
For Punjab, the move is strategic. Pakistan’s textile sector has been under severe pressure from high energy costs, falling cotton output and regional competition. By attracting foreign-backed investment into higher-value segments, policymakers hope to reduce reliance on low-margin commodities and restore competitiveness.
Whether two factories can catalyse a broader transformation remains uncertain. But the message is clear: if Pakistan’s textile industry is to recover, it will need not just more capacity—but better, more sophisticated production.
