Lanka’s apparel industry targets $ 5 billion by 2010

Ramani KANGARAARACHCHI

Sri Lanka’s apparel industry has targeted USD five billion by 2010 and beyond with aggressive growth in the industry despite the current global crisis.

The apparel industry in Sri Lanka recorded USD 3.2 billion in export earnings in 2007 and was the largest contributor to the national economy which was 10 per cent of the GDP, said Chairman, Joint Apparel Association Forum (JAAF) Ajith Dias.

He was addressing a seminar on “Global Financial Crises and Impact on Economy and Business in Colombo on Monday.

Focusing on Garment Sector Survival, he said that 2009 will be a very challenging year for the industry . Retention of GSP+, exchange rate, adjustment in utility costs and stimulus package are the main challenges in 2009. Therefore, it is necessary to consolidate business this year. He said that some exporters want the rupee to be developed by 20 per cent to face the competition but it would not be realistic as Sri Lanka will have to pay much more on imports. He said that Rs. 118 to Rs. 120 against the dollar would be ideal.

Meanwhile, there will be many opportunities in the eastern and northern provinces with the end of the war and there will be a lot of potential to grow. There are emerging markets such as India, China, Japan and Russia and Sri Lanka should make this crisis an opportunity to grow, Dias said.

However, elaborating on the drawbacks, he pointed out that internationalisation of micro problems by particular trade unions would be adverse to the industry. The Brain Drain has also caused problems as a large number of well trained middle managers have left the country. The industry expects a ten to fifteen per cent downturn in the global market this year as companies such as M and S have down sized the number of employees and stores which in turn would affect demand. The industry not having a Plan B to overcome these situations is another huge drawback, he said.