Online edition of Sunday Observer

Apparently, the uniform blues are still not over. Hardly has the dust settled on the commotion among the student and parent population, stirred up by the Government's implementation of a school uniform voucher scheme, a comparatively smaller community of local textile manufacturers have surfaced, clamouring for remedial measures by the state authorities for blues of a different kind.

The Ministry of Education, along with itsdecision to implement the new system of distributing school uniform material, also made known its decision to import the required quantity of uniform fabric from China. Many reasons have been attributed for this decision, primary among them, the cost factor and quality of the product.

The Ceylon Textile Manufacturers' Association (CTMA) allege that the Government's decision has placed textile industrialists, who have been, until now, assigned production allocations by the Government for uniform fabric, in a quandary. They have already manufactured 1/3 of the required quantity and had also invested heavily in upgrading production facilities.

Last week officials of the Ministry of Education announced that they would be purchasing the entire stock of 3.5 million metres of fabric the local manufacturers have already produced as uniform fabrics. But the manufacturers, allege that by deciding to import uniform fabrics, the Government has placed in jeopardy, the country's already dwindling textile industry, which was mainly dependent on school uniform allocations for survival. The decision, they allege had caused their production plants to halt operations, enforcing both unemployment and heavy financial losses.

Nimal Perera, Secretary, CTMA, and Managing Director, Nids Fabric (Pvt) Ltd. said the Government's decision to procure locally all the uniform fabric requirement for schools, defence forces, health and transport sectors was taken as a relief measure, when the local textile industry collapsed when cheap imported fabric began flooding the market subsequent to the removal of the 35 per cent import duty on textiles in 1997.

In February 1998, Cabinet approved proposals for a Restructuring Programme for the Domestic Textile Industry which included ensuring the availability of a market until local products reached the quality status for international markets. This included entrusting selected companies to cater to domestic requirements of uniform material for schools and service personnel, and textile products such as bandages and gauze for the health sector. Under this programme, a Domestic Textile Allocation Committee was set up to assess the fabric requirement of government institutions and identify the manufacturers to whom the allocation would be made on a quota basis.

"Accordingly, The Schools Uniform Fabric programme began in 2000 with a 25 per cent order to the local manufacturers," explained Perera, adding that in 2001 the total requirement was manufactured locally. This year, too, the manufacturers were allocated the total requirement, but were subsequently asked not to commence production as the requirement may reduce under the new Voucher distribution system.

Perera said manufacturers were informed of the government's decision to import and ordered not to produce locally, while they were awaiting the details of exact quantities to be produced. "They agreed to purchase stocks that were already available with the local manufacturers. "But our present position is such that, with production at a standstill, some of us cannot even pay salaries of employees, as we have no income," he lamented, adding that all the manufacturers had invested heavily to upgrade and add new machinery for the production of uniform fabric.

According to Perera about 100 employees of his company have been affected by the loss of the uniform fabric order. This lament is echoed by the rest of the manufacturers, who claim heavy losses and fear they may have to retrench staff and close shop.

V. Sivasudhan, General Manager, Ceylon Synthetic Textile Mills, said, that 175 employees of Cyntex's Ekala plant are affected and without the uniform fabric order the Ekala plant would most likely be closed down.

"The Air Force, Army and Police have given us samples of uniform fabric and those are being tested now," he said.

K.M.H. Akbar, Managing Director, Asian Cotton Mills Ltd., said that one third of their yarn production was for the textile manufacturers producing school uniforms, and claimed that the school uniform sector of 9 million meters is very much bigger than the uniform sectors of the Forces or Health Services.

Perera has written to Prime Minister Ranil Wickremesinge about the plight of the manufactures. He questioned the Government's decision to import the school uniform fabric, after allocating the total requirement to the local manufacturers on the grounds :

2. that the prices of locally produced fabric were reasonable and at an acceptable level under normal tender regulations.

3. that the local textile industry is in a severe crisis with many closures and loss of employment. He also questions how the Ministry of Education, which couldn't give the manufacturers an estimated requirement to commence production had been able to give an estimated quantity to the Chinese supplier. "Producing the fabric locally can ensure continuity of employment and also save much-needed foreign exchange for the country," he said.

S. Thilla Nadarajah, Addl. Secretary, Ministry of Human Resource Development, Education and Cultural Affairs, said that it was too early to comment on what the Government will decide about next year's uniform allocation.

"Sometime back, the Ministry of Industrial Development, Industrial Policy and Constitutional Affairs had instructed the local textile manufacturers to commence producing school uniform fabrics," he said.

"At a meeting held on July 10, at our Ministry, the local manufacturers brought to our notice that 3.5 million meters fabric was available with them and we thought it was the quantity they produced for uniforms and are purchasing the entire stock from them."

"But imported material is cheap even with clearing and other expenses. Whether imported or locally-produced, we check the fabric's quality at the Textile Training and Services Centre. For every 10,000 meter, it takes random samples. If they do not conform to the required specifications, we reject the material," Nadarajah said.

The Minister explains....

Dr. Karunasena Kodituwakku, Minister of Human Resources, Education and Cultural Affairs, pointed out a different facet of the issue saying that the Government decided to import school uniform fabric from China because the local textile mills did not provide their produce on time. "As the Minister of Education, it is my duty to provide uniform material to all school children on time," the Minister emphasised. "But we failed to fulfil it as we did not get the fabric on time although the order to the local mills was given a year ago. If what student should wear in January, they got only in March, how are we going to trust them in future ?"

The Minister also said that the Ministry had to pay the local textile manufacturers Rs. 30 million for the quantity they had already produced. "It is also known that the uniform fabric imported from China is of good quality. Sources also said that local textile manufacturers think that some underhand deal has taken place with the imports. If they can produce the same quality fabric for a lesser price, tell them to come and meet me or pay back the Rs. 30 million to the treasury with a guarantee," the Minister challenged.

But Asoka de Z Gunasekera, Chairman, Ceylon National Chamber of Industries (CNCI) in a letter to R. Paskaralingam, Adviser to the Ministry of Policy Development and Implementation of Economic Affairs has stated that only one supplier failed to deliver in 2001 and that 90 per cent of the required quantity was supplied and Perera corroborated it. "The Government policy should be to identify standards and tell the local manufacturers to reach the standards by giving them some time," said Gunasekera.

Was the Ministry misinformed?

Nimal Samarasinghe, Chairman, CTMA, and Asoka de Z. Gunasekara, Chairman, Ceylon National Chamber of Industries (CNCI), have written to R. Paskaralingam, Adviser to the Ministry of Policy Development and Implementation of Economic Affairs, alleging that the Government had been misinformed by officials of the Ministry of Education with regard to prices of locally-produced and imported fabric.

Both letters point out that the conversion rate of US Dollars into the Sri Lankan rupee has been understated at Rs. 90/- and LC, Port and clearing charges omitted, converting the cost of one meter of Chinese white shirting material at USD 0.65, to Rs. 58.50. CTMA calculates, with a conversion rate of rs.97/-, clearing charges in rupees at 5 per cent and the 20 per cent preferential leverage given to the local industry, the actual import cost is Rs. 79.44. The locally produced price is given as Rs. 75.

As CTMA calculates, Chinese price/meter of white trouser material should be Rs. 128.35, and not Rs. 94.50. Blue trouser material, Rs. 134.40, and not Rs. 99. And robe material, Rs. 73.32, and not Rs. 53.10. CTMA appeals to the Government to stop importation and to allow local textile manufacturers to resume production, stating that they could provide 8.5 million meters of uniform fabric, cut, packed and transported direct to the distribution points at a total cost of Rs. 875 million, still below the annual government allocation of Rs. 1,000 million.

Stated Gunsekara, "According to the Cabinet decision when calling for any tender, a 20 per cent leverage should be given to the local manufacturer even if the import prices are lower, you have to give the 20 per cent to the local manufacturers."