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by Chamitha Kuruppu

The government's intervention is essential for the revival of the local textile industry, Chairman, Textile and Apparel Sector of the Ceylon National Chamber of Industries (CNCI) Nimal Perera told the Daily News.

He said the continuous downward trend over the years has led the local textile industry to a total collapse.

Perera said that the local textile industry cannot survive under the present environment as it is totally unprotected. The industry which is incurring losses day by day is not in a position to pay salaries to their workers. The industry showed a poor performance last year. Several factories were closed down during the year and many employees lost their jobs due to the present crisis in the industry.

"The industry is gone, no investment could be expected from the textile sector," Perera said. During the 90s the investment in the textile sector was approximately Rs. 12 billion. He said that other countries in the region are 'looked after well' by the authorities. Such authorities are not engaged in unfair trade practices and provide various subsidies to motivate domestic industrialists.

"The local textile industry lacks a level playing field," he said. The industry's collapse started after the sudden and ad hoc manner the Customs Duty for textiles was removed in 1997. The situation has become worse from 2001 as India and China started to 'dump' fabric at raw material costs by adopting unfair trade practices.

Many mills including Pugoda and Veyangoda closed down operations during the past couple of years while some restructured and survived for a short period.

Several proposals submitted by the CNCI for the revival of the industry have been rejected by the authorities as they were unable to implement them due to complications in the WTO Agreement and VAT Act.

It is essential to deviate from rules, regulations and normal procedure and take remedial action or to renegotiate the terms with the WTO if the local textile industry is to be saved, Perera said.

Industrialists have got into huge debts due to intolerable losses they are incurring at present. A level of protection is essential to safeguard industrialists. This could not be a hindrance to the smooth functioning of the apparel industry as they have duty free facilities, he said.

Although the apparel industry is performing well at present it is necessary to maintain a strong textile industry for it to be continued, he said.

Discussions held between the government and industry representatives have ended in failure. Other than acknowledgements a positive response from the government is yet to be received, Perera said.

In a letter addressed to the Deputy Secretary to the Treasury Faiz Mohideen in early February the Ceylon Textile Manufacturers Association requested to appoint an individual or a committee to assess the current situation of the local textile industry and visit the mills and submit a report.

"Due to the present situation, industrialists may not be able to repay huge debts including loans. Even if the mills survive they may not generate enough funds to settle their huge debts. The collapse of the industry was not the fault of the industrialists. The collapse of the industry has not only caused loss of employment but also loss of huge amounts of investments as well," the letter said.

During the appointment of task forces in 16 key industries to formulate and implement strategies the textile industry was left out, Perera said.

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