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 Post subject: Sri Lanka’s apparel industry withers GSP+ storm
 Post Posted: Sun Feb 06, 2011 1:43 am 
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Sri Lanka’s apparel industry withers GSP+ storm
Crisis-hit Bangladesh apparel buyers turn to Sri Lanka

@ LL / Source ST / Feb 5, 2011

Sri Lanka's apparel industry is bravely and effectively withering the storm with the withdrawal of the GSP + facility by the European Union (EU) as more and more buyers are placing orders with the country's garment factories keeping faith on its efficiency and reliability. With the internal crisis in major apparel producing countries such as Egypt which has duty free access to the U.S.A and workers issues in Bangladesh which enjoys EU GSP+ facility, Sri Lanka has become the most sought out and safest country for sourcing apparel, Sri Lanka Garment Buying Offices Association Chairman Gopal Iyer told the Business Times, on the sidelines of a press conference convened by the Joint Apparel Association Forum (JAAF) in Colombo on Wednesday.

Bangladesh has been having such a strong garments industry that its export earnings in November 2010 alone was $2 billion, other industry sources said. At least three top Sri Lankan companies – Brandix, MAS Holdings and Hirdaramani (the longest with 20 years there) - have production facilities in the South Asian nation. Joint Apparel Association Forum (JAAF) President A. Sukumaran said apparel and textile exports rose 3.7 % to $3.04 billion dollars in the January - November 2010 period from the previous year. Earnings from garment exports to Sri Lanka's major markets, the EU and USA, rose by 39 % and 28.7 % in November 2010, he said.

The series of recent clashes between law enforcers and garment workers in Bangladesh are symptomatic of an unfolding crisis in the industry and put it at risk of losing its competitive edge in the global market.

Under this set up, the Sri Lankan apparel sector should work at full capacity to gain competitive advantage. Though the confidence level of the industry is high, there is no capacity in the apparel sector to meet increased international orders. "The major global brands in the apparel sector such as Marks and Spencer also look at increasing additional production capacity in Sri Lankan apparel factories," he said.

He said Sri Lanka has shown formidable resilience in withstanding the global recession, and the expiry of the Multi- Fibre Agreement (MFA). "We have gone through turbulent times and now look forward to some respite. Much has been done in the past but more needs to be done if we are to counter the challenges that lie ahead to meet the additional apparel orders which are coming towards Sri Lanka's way ," Mr Iyer said. While there was serious concern as to the fate of the industry in the post MFA phase, what occurred was rather an increase in exports and the generation of total revenue of over three billion dollars. He noted that the country should increase its capacity and the 240 apparel factories currently operating in the island are not sufficient to meet the demand.

Joint Apparel Association Forum (JAAF) President A. Sukumaran told the Business Times that although Sri Lanka has lost some business owing to the withdrawal of the EU GSP + facility, new orders placed by several new buyers and existing buyers such as Marks and Spencer have been able to stabilize the situation, he said. Sri Lanka was the only destination where the industry has made benchmarks for other countries to follow and the country has already captured the high end apparel market he added.

He revealed that JAAF has formulated a 5- year strategic plan, suggesting several ways to expand the apparel business in several countries outside of American and European traditional markets, including Japan, Brazil, India, China and Canada. This will neutralize the impact caused by the withdrawal of GSP plus facility, he observed.


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