Commercial hub status will boost apparel industry
By Gamini Warushamana
2014 will be a landmark year for the apparel industry of Sri Lanka,
in its decades-long evolution of policies, due to the introduction of
commercial hub operations, said the Secretary General of the Joint
Association Forum (JAAF) Tuli Cooray. He said that the apparel industry
would receive huge benefits from commercial hub operations.
 “In 2011, we pointed out to the government the importance of this
concept to reach the next level for the apparel industry in particular
and other export sectors in general,” he said.
“In 1012, the first draft of the Act came into being and after
careful study it was fine-tuned and in 2013 the Bill was passed. This
Bill sets up the framework to change the present export business model.
It will harness the strength, synergies and capacities of the apparel
sector in the South Asian region,” said Cooray. He said that three
countries, Bangladesh, India and Sri Lanka have the world's largest
production base, workforce and the textile base of the apparel
industry.Therefore, with this new hub regulations the apparel industry
can expand capacity through re-export.“Under the new regulations we can
import finished products from any country add value here and re-export
it to any country. We could only import an item under one HS code and
export it under another HS code, under the previous regulations,” he
said.
This will open the opportunity of manufacturing apparel in a low-cost
country, bring them here and add value (such as embroidery and special
washing) because it cannot be done in that country and prepare it for
the export market. This will also give an opportunity to Sri Lankan
companies to get orders, manufacture in other low cost countries and
deliver. They can do order management and supply chain management, he
said.
This new business model also has opened opportunities for Sri Lankan
apparel companies to expand their front-end services as there are lot of
activities before the sewing of a garment.
“We have logistic services so that multi country consolidation can
take place. With the rapid development in port and airport
infrastructure, connected sea routes, geographical location and cost
advantage we have the feasibility of just-in-time delivery,” Cooray
said.
Under this new business model, JAAF expects the value of apparel
exports to increase by another $1 billion by 2016 or 2017. In 2013
exports recorded $ 4.2 billion, the highest ever. |
