Apparel brings in US $ 250 m more in 2019 | Sunday Observer

Apparel brings in US $ 250 m more in 2019

26 January, 2020
Tuli Cooray
Tuli Cooray

Sri Lanka’s apparel industry is working with new vigour to reach US $ 6 billion in revenue by the end of this year continuing with the growth momentum recorded last year.

“The country earned a record US$ 5.3 billion with a 5.1 percent year-on-year (YoY) increase in apparel export earnings for 2019 despite a slight decline in export earnings in December, Secretary General Joint Apparel Association Forum (JAAF) Tuli Cooray said.

This is approximately $ 250 million more than last year. We have grown in all markets including USA and EU. This growth is significant as apparel is the only sector to record a positive growth last year contributing to the country’s growth trajectory, he said.

However, apparel export earnings have declined by 1.71 percent (YoY) to US$ 460 million in December due to a slowdown in key EU and US markets.

“This year, we are expecting to grow with the possibility of reaching $ 6 billion, an increase of $ 300 million. We are confident that this year’s target could be achieved. With plans to receive wider benefits from the GSP+ facility, the industry is looking at the possibility of sourcing fabric from Indonesia and Bangladesh in addition to the present sourcing countries such as India and Pakistan,” he said.

“Sri Lanka and Indonesia have jointly submitted applications to the EU to obtain approval to source fabric from Indonesia with approval pending.

We are also seeking support from Bangladesh to meet the fabric requirement to enable a bigger share of GSP+ facility,” he said.

At present, 47 percent of Sri Lanka’s apparels enjoy the facility where as the industry plans to reach up to the level of 60 percent this year. As we need to meet the strict standard in rule of origin, our sourcing partners should be EU approved. To this end we are working with the government to set up a fabric park which is due to be completed within 18 months to reduce dependability,” he said.

“With the fabric park in place design and manufacturing of apparel could be done with the use of local fabric. There will be a new textile manufacturing unit in the country to meet the demand from exporters. We are working closely with the Government and the fabric park will be set up in the Eastern Zone,” he said.

There are six factories that supply fabric of export quality at present and plans are to increase the number of factories from 10 to 12 to achieve desired results by ensuring supply side sustainability.

The country’s apparel industry targets six percent YoY growth in exports this year, moving ahead with plans to set up a 200-acre fabric park with foreign investments in collaboration with the Board of Investment in the Eastern province, eyeing to attract large-scale orders by reducing lead times with locally-sourced fabrics.

The apparel industry has been planning to diversify its export base in BRIC countries, particularly to India and China, as growth in mature clothing markets has slowed down.

Industry leaders emphasise that the proposed FTA with China and the Economic and Technology Co-operation Agreement with India are crucial to break into the Chinese and Indian markets. However, Sri Lanka’s FTA negotiations have come to a standstill at present.

Last year, apparel exports topped US$ 5 billion for the first time in the country’s history. The apparel and textile industry contributes six percent to Sri Lanka’s GDP while accounting for 40 percent of the country’s exports.