JAFF commends the budget

The Government has included all the proposals of the Joint Apparel Association Forum (JAFF) for the budget proposals and this would have a major positive impact on the apparel sector.

Secretary JAFF, M. P. T. Cooray said that when these proposals are implement the industry would be in a position even to look at regional markets. He also said that the previous budget proposals too were all implemented and thanked the Government for acting in a very responsible manner keeping to their pledges.

"Accordingly it is proposed to establish an independent College of Textiles for the purpose at the Kabool Training Center situated at Thulhiriya. This nucleus campus of the new Textile College will provide advanced academic and practical training in fabric technology, product designing, and supply chain management industrial engineering, works studies, technical product development etc.

The proposed College will also be the catalyst for coordinating training activities presently undertaken by institutions such as the VTA, CITI, TTSC and the University of Moratuwa," he said.

Implementation of the proposal is estimated to cost US$ 7.5 million over a period of three years.

The funding requirements for 2006 to implement the initial activities under the envisaged framework would be Rs. 450 million.

Textile mills require a ready supply of water, stable power and efficient effluent treatment plants. A logical and convenient base for locating such a textile processing zone would be Thulhiriya which was the site of the former Kabool Mill and already equipped with most of the infrastructure.

"We proposed that the Thulhiriya Complex be developed as a dedicated textile zone," the response was very good,"

The recognition and encouragement of local producers of input and intermediate goods required for the creation of domestically sourced export oriented industry was commenced by our Government by suspending output VAT on such supplies made to the apparel manufacturers. This system introduced as a budget proposal in 2005 is functioning effectively.

Further assistance is now required to make it more meaningful and also to bring in other export oriented companies as well. Accordingly we proposed that input and intermediate goods manufacturers supplying to non traditional export oriented companies including apparel manufacturers registered with the Textile Quota Board / EDB be brought under the suspended VAT scheme with a facility to import the inputs required by such intermediate and input manufacturers on a deferred VAT basis.

This arrangement will result in relieving these companies of the cash flow burden faced by them. Slowly but steadily many of the small and medium companies are aligning themselves with the larger ones for their survival.

This will be the future business pattern of the apparel industry in Sri Lanka. Recognition of this factor is very crucial for the sustenance of the industry.

"To meet this goal we proposed that income of a registered apparel manufacturer arising from subcontracting activities entailing sewing and assembly of garments and or the provision of services, resulting in a change or improvement either of quality or character or the value of the garments to be exported, be treated as deemed exports provided such income is received in convertible foreign currency from the company which is exporting the final product," Cooray said.

(SS)