Sri Lanka’s apparel industry is moving in the right direction and all the stakeholders need to ensure its sustainability and reach the set targets through product and market diversification, Chairman, Sri Lanka Apparel Exporters Association (SLAEA), Rehan Lakhany said.
“The industry needs more woven fabric suppliers and should enhance the number of overall fabric manufacturers to meet the terms in preferential trade agreements and also to meet speed to market, to sustain and grow the market place,” he said.
A positive trade policy agenda is the need of the hour for the industry to sustain performance and it will also be an encouragement for industrialists to be competitive and provide the national economy an upward push, he said.
Excerpts:
Q.What is the present status of the apparel industry in Sri Lanka?
A. The Sri Lanka apparel industry has recorded the highest ever growth for the month of May and also for the cumulative period from January to May. This is by achieving a turnover of US $ 2.139 million and a growth rate of 8.69%. This is the highest ever growth recorded in the past five years.
Significantly, apparel exports have recorded growth in the US market, EU market and in other countries as well. We can say that our industry is heading in the right direction. With the expectation of this positive trend to be continued in the long run.
Q. How confident are you of achieving growth targets in terms of revenue and volume this year?
A. Based on the performance in the first half of this year, I believe we will achieve our targets with a compound growth of 6.5% to achieve the US $ 8 billion target in 2025. However, the industry needs to work collectively to move forward in reaching the targets. Since we lack government support by way of incentives, a combined effort of all the stakeholders to further improve industry performance is necessary.
Q. What are the challenges the apparel export industry faces at present?
A. We see a lack of woven fabric suppliers and overall fabric manufacturing in Sri Lanka as a major challenge. This is necessary to meet the country of origin rules demanded under preferential treatment such as GSP+ and as well as speed to market.
There are investors who are interested in setting up textile plants in Sri Lanka, but they do not have access to locations which has water and discharging facilities. We are working with the BOI to solve this issue, but progress has been slow. This has been identified as a vital need for the industry to grow, but has not been successful so far.
Q. Is the policy framework conducive for the industry’s growth plans?
A. We don’t see a problem with the policy framework. But the support that is needed by the industry is not forthcoming due to implementation issues. The problem is more of implementation than policy framework.
Q. What are the new markets the SLAEA is exploring at present?
A. We continue to go for diversification of the market, especially to China and India, the two largest developing economies in the world.
We have been advocating negotiations for a preferential arrangements with a guarantee for market access for our products. These efforts will have far reaching benefits for the industry.
Q. What are the technological advancements to be deployed by the industry to upgrade the quality and efficiency of the operational process?
A. Automation is the need of the hour. The industry is now embracing automated 3D sampling technology using digital avatars to speed the manufacturing process as a part of automation of the back office.
There is also a focus on sustainability where advanced technology is being used to minimise emissions and energy use to reduce industrial discharge. We are proud that we commissioned the world’s first zero emission apparel manufacturing plant in Batticaloa this year.
Sri Lanka’s apparel industry has always been striving to be the first and the best in all spheres. This has won the respect of some of the best brands in the world, which continue to place their trust and grow their sourcing with us.
Q. Any plans to diversify the export sector to capture new product orders?
A. The industry is always looking for new opportunities with regard to products and markets, and it is a continuous need. It is constantly exploring new areas to grow, for example, a leading apparel manufacturer is now producing textile-based shoe uppers for the largest footwear brand in the world.
We are continuing our efforts in market and product diversification to ensure the sustainability of the industry.
Q. What is the impact on the industry following the Easter Sunday attacks?
A. We had a disruption of production for about 3-4 weeks. We are working with our local and foreign stakeholders to continue our business. But our worry is not the disruption, but whether it could impact a trade shift.
This is particularly because of post event developments. Fortunately, the government curtailed it and we hope that no more civil unrest will occur, enabling the industry to continue towards achieving our 2025 target. The conducive environment will pave the way to materialise our objective.
Q. In terms of skilled labour, is the industry comfortable with the workforce?
A. Skilled labour is our biggest asset. The industry is continuously training and upskilling the workforce. We will do everything possible to retain and motivate the staff.
The current program ‘Matai Mage Ratatai’ is an image building program to create awareness for nationally important contribution being made by the workforce through our industry.
We are hopeful that this will help support to reverse the negative perception that has been created by all media streams for past three decades.
It is a campaign organised by the industry with the support of the Export Development Board (EDB).
We hope to bring the respect our workforce deserves and motivate them in order to support our industry and our nation to achieve its full potential.
Q. Are there plans to generate more revenue and create employment opportunities in the next five years?
A. We have set ourselves an ambitious growth target for the next few years and there are multiple programs conducted by the SLAEA and the Joint Apparel Association Forum to improve the business environment, create additional market access, expose our membership to international fairs with the support of the EDB and recognition of our workforce through the NVQ program.
The industry strongly believes that a productive public-private dialog will reduce time and the cost of doing business with the Government and with a positive trade policy agenda, we will continue to perform and make our contribution to the national GDP.
We are optimistic of the progress the apparel industry could achieve and contribute to the national economy in terms of revenue and employment generation. The industry needs a solid strategy to ensure sustainability in moving forward.