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| Sunday, 7 November 2004 |
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| News Business Features Editorial
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Structure of the apparel industry in Sri Lanka Textile and Apparel Sector continued to maintain its dominant position in the Industrial Sectors by contributing around 43% of industrial production and 50% of country's total export earnings. Apparel accounts for 93% of Textile and Apparel Exports. Since 1986 apparels become the number one foreign exchange earner and largest single employer in the manufacturing sector providing direct employment opportunities for 340,000 persons. Exports of apparel during year 2003 were US $ 2400 mn. and US$ 1145 mn. during 1st half of 2004 and up by 6% over same period of last year. Industry is heavily dependent on imported inputs mainly fabrics and other accessories. Textile sector imports during 2003 were US $ 1372 of which fabrics accounted for US$ 1014mn. Sri Lanka's major apparel markets are USA and UK and both these countries import around 82% of Sri Lanka's total apparel exports. The strengths of the industry are generous tax concessions and incentives and comparatively cheaper educated and trainable labour and its weaknesses are absence of indigenous fabric base, lower productivity, lack of designing capabilities, concentration on very few markets and lack of direct marketing links with major buyers. During the year 2003, there were 607 exporters and exported apparels to the value of US$ 2400 mn. The category of extra-large (exports value over US$ 5 mn.) which accounted for 18% of total exporters, accounted for 76% of exports with US $1830 mn. This was followed by the large-exports category (exports between US$ 1 to 5 mn.) which consisted of 29% of exporters accounted for 20% of exports with US$ 470mn. and the small and medium category (export value less than US$ 1mn.) which consisted of 53% of exporters exported to the value of US$ 100mn. or 4% of exports. There were 586 exporters of woven garments during the year 2003 and their exports were US $ 1578 mn. Extra-large category accounted for 71% of exports with 13% of exporters. The Large category accounted for 23% of exports with 24% of exporters and the Small and Medium category accounted for 6% of exports with 63% of exporters. In the knitted garments, there were 521 exporters, and their export value was US $ 822 mn. Extra large category accounted for 75% of exports with 8% of exporters. The Large category accounted for 17% of exports with 11% of exporters and the Small and Medium category for 8% of exports with 81% of exporters. In the apparel industry total employed were 340,367 and total installed machines were 204,009 and the ratio of employment to machinery 1:1:7. Extra large category accounted for 56% employment by employing 191,253 persons followed by Large category 27% with 92,983 persons and Small and Medium category 17% with 56,131 persons. Extra-Large category accounted for 53% of machines with 108,332 machines followed by Large category 28% of machines with 56,609 machines and Small and Medium category 19% of machines with 39,068 machines. Although Table 1 reflects that extra-large category accounted for 76% of total exports, this category accounted only 56% of total employed and 53% total machines. However small and medium category which accounted for only 4% of total exports, accounted for 17% of total employment and 19% of total machinery. Global market The global apparel exports is around US$200 bn. major buyers are EU, USA and Japan and the leading suppliers are China and Hong Kong followed by Turkey and Mexico. USA retail sales are around US$ 190 bn. and EU's retail sales around US $ 211 bn. USA apparel imports for 2003 totalled US $ 61,162 mn. and during the 1st half of 2004 were US $28,907 mn. Major suppliers are China, Mexico, Hong Kong, Honduras and Vietnam. EU textile and apparel consumption for year 2003 was 230 bn. Euros and its clothing turnover during the year 2003 were 65 bn. Euros. Extra EU's apparel imports during 2003 were 53 bn. Euros. Major suppliers to EU market are China, Turkey, Romania, Bangladesh and Tunisia. Germany is the leading importer followed by UK, France, Italy and Netherlands. With emerge of the quota free trade in 2005. American and European retailers will consolidate their production in fewer countries, however none will risk putting large business into few countries. |
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