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Sri Lanka: To enhance exports, raw material production needs boost

"Considered an alternative to Indian garment industry, Sri Lankan apparel industry has seen tough times of late. However, it still accounts for over 46 per cent of Sri Lanka’s total exports and generates the highest industrial employment opportunities to over 300,000 directly and 600,000 indirectly, which includes a significant number of women. Gauging the importance of the industry, the government has developed research, innovation and design. The sector also maintains high ethical standards and is highly praised for its compliance and labour rights practicing than any other competitive countries."

 

 

Sri Lanka To enhance exports raw material production needs boost

 

Considered an alternative to Indian garment industry, Sri Lankan apparel industry has seen tough times of late. However, it still accounts for over 46 per cent of Sri Lanka’s total exports and generates the highest industrial employment opportunities to over 300,000 directly and 600,000 indirectly, which includes a significant number of women. Gauging the importance of the industry, the government has developed research, innovation and design. The sector also maintains high ethical standards and is highly praised for its compliance and labour rights practicing than any other competitive countries. However, on August 15, 2010, the EU suspended Sri Lanka’s GSP+ status, which impacted the industries growth dynamics.

Vision 2020 the way forward

Sri Lanka To enhance exports raw material production

 

The Sri Lankan government has set out a vision to position Sri Lanka among the top 10 high quality apparel -manufacturing countries in the world by 2020 turning in $8.5 billion in revenue. The country is working with leading international brands such as Victoria’s Secret, Gap, Liz Claiborne, Next Jones New York, Nike, Ann Taylor, Tommy Hilfiger, Marks & Spencer. However, Sri Lanka’s textile and clothing industry’s export earnings of the first two months of running year recorded decline despite the full order books of large-scale manufacturers. Sri Lanka’s exports statistics of February 2017 show a declined by 2.7 per cent year-on-year (YoY) to $868 million after falling 1.1 per cent in January 2017, extending the year-to-date decline to 3.2 per cent YoY to $1.73 billion. On the other hand, according to Sri Lanka Apparel Export Association, total apparel export has decreased $102.1 million in 2017 January-February over the same time of previous year.

US is biggest destination for Sri Lankan textile and apparel products. Apparel categories being exported are: sportswear, lingerie, loungewear, bridal wear, workwear, swimwear and children’s wear. UN Comtrade data shows, Sri Lanka is the second largest brassieres supplier to both the EU and the US, accounting for about 10 per cent of the supply in each of these markets. In addition, it is also the third largest swimwear supplier to the US, with 8 per cent market share, trailing only China and Indonesia. Apparel export to the US declined in February 2017 compared to previous year. And as Sri Lanka Apparel Exporters Association (SLAEA) Chairman Yohan Lawrence says, as an industry, its apparel industry stakeholders should look at markets other than US and the European Union, without losing the foothold on them.

As per Euromonitor, the country’s industrial production of textiles amounted to only $0.85 billion, while it imported more than $2.2 billion of such items in 2014. UN Comtrade data highlights that China and India are the Sri Lanka’s major sources of textiles, accounting for 35.1 per cent and 28.5 per cent respectively.

If the country aims to achieve the slated target, then raw materials imports for apparel production, should be reduced gradually by enhancing and encouraging foreign investments. Labour shortage problem can also be removed by bringing more women into the workforce. And lastly, the country needs to diversify its products and look for new markets to expand exports.

 
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