Sri Lankan apparel industry second to none

Must foster trade with Japan:

Sanjeevi Jayasuriya

Sri Lanka has world class facilities and ethical practices second to none in the apparel industry world. “Sri Lanka produces high quality products at great value. Sri Lanka is also a very reliable sourcing destination to any customer and terms of trade are flexible and customer friendly.

These areas give us an edge to remain competitive despite us not being the cheapest manufacturing source,” Sri Lanka Apparel Exporters Association Chairman Rohan Abeykoon told Daily News Business.

“We need to go beyond concessions and it is important to increase productivity, speed to market, innovation, design marketing and branding. We need to step up aggressively to counter dependence on concessions,” he said.

“Promotion of branding apparel sector is no small task. It needs strong strategic thinking and exceptional creativity not withstanding the costs of marketing. This is currently being undertaken by individual companies and is not something that will be taken on by the Association as such.

We have among our industry brands such as Amante, LICC and Avirate already which is a positive step in this direction.”

Technology is a prerequisite for sustainable growth and the larger companies have deployed more than satisfactory technological advancements in keeping with industry demands.

“However, for most plants, high investment during tough times is not an option and to promote advancement across the industry this needs to be looked at on a macro level with schemes in place to support such advancement,” he said.

Green plants have many benefits with regards to the environment and the carbon footprint. However, whether the final consumer is willing to pay a premium for such manufacturing is not evident so far.

Nevertheless as an industry Sri Lanka will promote clean manufacturing as it is the right thing to do and helps build the image of the industry and country as ethical partners, he said.

The order books of most apparel plants are full and it appears that this will be the case until March 2011 at least.

“Sri Lanka is predominantly exporting to two markets. The US and the EU.

Most of the exports to the EU are into the UK. We have a very small market share in Germany, France, Italy.

There may be opportunities with countries such as Japan if we can discuss bilateral agreements to help foster trade,” he said.

The increase to Europe and the US was only for September year on year comparison and year to date it is down 2.8 percent to the US and 7.4 percent to the EU.

The buyers are concerned about the withdrawal of GSP+. It is not possible for either side to bridge a 9.6 percent differential on FOB price.

Some buyers such as M&S unilaterally reduced prices by this margin for orders exported in August and September.

“We have fierce competition from countries such as Bangladesh in the region who not only have low costs of production but enjoy duty free access into the EU,” he said.

China is not necessarily a threatening competitor although they are the largest apparel manufacturer in the world.