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| Sunday,13 November 2005 |
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Lanka's apparel exports gather momentum by Elmo Leonard
Sri Lanka's export oriented apparel industry, now, encountering the non-MFA era since January 1 this year, on performance, seems able to survive up to year '07 or '08, according to the trade. The January to end-July 2005 apparel export performance at $1.5 million is way above the export performance of $1.4 million during the corresponding seven months of 2004. But, this calls for interpretation, Clothing Industry Training Institute (CITI's) inaugural director, Rohan Kuruppu said. Pre-MFA, the European Union accounted for 30 percent of Sri Lanka's apparel exports. Now, Sri Lanka's garment exports to the 25-nation EU comes under the GSP+ - General System of Preference Plus making it zero-duty entry. With it, Sri Lanka can match competition into the EU, from nations such as Turkey and Morocco and the EU's intra-trade. The Marks and Spencer move to open an office in Colombo recently, having been active, here, for nearly two decades, mirror's the EU nation's intention to continue buying from this destination. Thus, the market to the EU nations should expand in the next few years, Kuruppu said. Pre-MFA, the EU's purchases were staple goods as basic styles of light-weight garments made of cotton, viscose, non-man-made fibres and their blends. At present the island's export apparel industry caters to the up-market. With it, more factories are turning out branded clothing such as Marks and Spencer, Liz Clairborne, Victoria Secret, Amber Combi and Fitch (A&F), Levis, among other accepted brands. Earlier, these brands sold in exclusive and expensive stores. Now, with the apparel market gone global, these brands are retailed in discount store chains such as Walmart and K-Mart. With the new customers buying at affordable prices, the buyers pay less per piece, backed by the claim that larger volumes are purchased. Caught up in this trend, Sri Lanka's apparel exporters have to be content with lower profit margins, Kuruppu said. Sri Lanka's garment output is of a higher quality, compared with many other competitor countries. Among SAARC nations, Sri Lanka's quality is the highest. However, Sri Lanka is in 13th position in exports to the EU behind, Bangladesh-4th, India-5th and Pakistan-9th. But, overheads, here are high; electricity rates are the second highest in the world and the high interest rates sees little climate to drop. Now, Sri Lanka's 800 garment factories employing 25,000 largely female workforce witnesses big companies offering orders to small companies because the COP - Cost of Production of the modest companies is much lower. Sri Lanka's January to end-June exports to the United States was $796.9 million; an increase by 17.33 percent, over the $676.44 million achieved during the corresponding six months of '04. These exports to the US required 225,458 million square metres of fabric, an 18 percent increase over the 190,436 million metres of textile needed for exports to the United States during the first six months of 2004. An analysis of the categories exported by Sri Lanka this year compared with those exported last year show the trend of Sri Lanka going up-market in its manufacture. To match this trend, much training for managers and more importantly, the workforce is required if Sri Lanka is to face competition in the coming years, Kuruppu said. Also, smalltimers are not accredited, thus, not recognised by leading buyers. Government must move in financial assistance to the small and medium manufacturers to upgrade and modernise their factories. Larger factories should reduce expenditure by adopting high technology in their bid to survive in the next decade, Kuruppu said. |
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