JAAF targets additional $ 1 b through 'hub' concept promotion

Secretary-General of the Joint Apparel Association Forum (JAAF),Tuli Cooray said there should be a long-term strategy to make Sri Lanka a Knowledge Based Economic Hub (KBEH) deviating from the traditional mode of manufacturing and supply.

The Joint Apparel Association Forum, the apex body which guides the destiny of the $ 4 billion industry, has been advocating this move, he said.

President Mahinda Rajapaksa in his capacity as the Minister of Finance last week released a gazette notification titled Commercial Hub Regulation No: 1 of 2013, which will be applicable to all new enterprises set up or incorporated in Sri Lanka.

Cooray said the apparel sector will benefit immensely under this new regulation. The apparel sector alone could anticipate an additional foreign exchange turnover of $ 1billion (Rs.1,320 million) by 2018.

Based on the current scenario in the international business climate the apparel sector has set itself a target of achieving $ 5 billion in 2015 through garment exports.

A further $ 1 billion is targeted from the emerging new market in China around that time, which will make the apparel sector worth nearly $ 7 billion before the end of 2020, he said.

“We (the apparel sector) will mobilise our resources to promote the new opportunity that has been opened and significantly improve our participation in reinforcing the national economy, the Secretary-General said.

The JAAF has played a vital role in the formulation of the new regulation and actively participated in most of the consultative processes capitalising on the government’s 'Open Forum' policy where input from all shades of stakeholders were considered before the CHR was introduced, he said.

“When the Bill for the introduction of Commercial Hub regulations was introduced in Parliament, it was challenged in the Supreme Court through a petition and the JAAF collective stood by the Bill and intervened as an interested party and cited its implementation justifiable as it was in the best interests of the country.

We did this because we saw the potential for the industry and for the betterment of the country,” Cooray said. The five-year strategic plan of the JAAF launched in 2010 outlines the significance of enhancing its present role as a manufacturer and supplier of garments to a totally integrated solution provider for the international apparel sector, facilitating end-to-end solutions beginning from research and development to supply chain services and logistics. Three years on, our achievement is significant, he said. The JAAF submitted a concept paper in 2011 for consideration in the Budget Proposals. It focused on establishing a Knowledge Based Economic Hub, to increase export turnover while creating additional capacities in basic manufacturing activities in underdeveloped areas. A JAAF official said that Hong Kong and Singapore have reached a high level of competitiveness by providing similar services and have been recognised worldwide. In that scenario the re-export of textiles and apparel have played a vital role in improving trade between Singapore and other countries.

The JAAF concept paper stated that the Sri Lanka apparel industry, particularly strong companies well connected to the market, would create additional business by providing hub services from Sri Lanka to low cost countries in the region.