Apparel exports to hit $ 5 billion this year

By Lalin Fernandopulle

Sri Lanka's apparel exports have been exceptional during the past few years despite the withdrawal of the GSP Plus trade concessions and the global economic turmoil, Sri Lanka Apparel Exporters Association (SLEA) data revealed.

Apparel export turnover has grown several-fold despite the global economic slow down affecting Sri Lanka's key markets such as the US and Europe which import a large quantity of apparel, said SLEA President Yohan Lawrence.

Apparel exports in the first four months of this year increased 23 percent to US$ 1,536.3 million from US$ 1,248.8 million in the corresponding period of last year.

Overall exports to the US recorded a growth of 21.9 percent while exports to the EU recorded a 23 percent growth.

Cumulative exports to other countries increased by 26.8 percent.

Export income will reach US$ 5 billion this year.

“Export revenue will increase exponentially within the next two to three years as the industry is targeting new markets. With the Free Trade Agreement (FTA) with China in the pipeline and FTAs with other regional countries, apparel export income will reach around US$ 6 billion within the next six years,” Lawrence said.

The cumulative export income increased from US$ 1,021.5 million in the first four months of 2009 to US$ 1,536.3 million in the corresponding period of this year. Exports to the US increased from US$ 449.7 million to US$ 651.2 million this year and exports to the EU increased from 508.5 million to US$ 701.1 million.

Exports to other countries increased from US$ 63.3 million to US$ 184 million.

The apparel export market is very competitive. Buyers not only look at the price but also the design, product development, logistical services, the environment and the ethical process of manufacturing.

Sri Lanka is known for manufacturing quality garments under stringent ethical standards.

There are no sweat shops or the use of child labour as in certain exporting countries,” Lawrence said.

Sri Lanka competes with Bangladesh which is a mass producer of garments with cheap labour.

Sri Lanka does around 40 percent value addition to its exports and sets off the import cost on accessories.

Lawrence said that over the past few years Sri Lanka's share of the global apparel trade has changed significantly.

Gone are the days when Sri Lanka was a source for simple 'cut and make' operations.

“We now offer a comprehensive package from product development and design, through ethical manufacturing and complete warehousing and logistics solutions,” he said.

“There is a high degree of value addition to the product on offer as a result of extensive investment on the latest equipment and technology.

We should pitch ourselves as the total apparel solutions provider to the global industry,” Lawrence said.

He also said that exporters to the US and EU should adhere to the Ethical Trading Initiative (ETI) and Worldwide Responsible Accredited Production (WRAP) principles.

Sri Lanka's apparel export income accounts for around 40 percent of total exports and around 52 percent of industrial exports.

The industry offers around 300,000 direct employment opportunities and around 600,000 jobs indirectly. There around 350 factories and around 16 textile and fabric factories in the country.