US financial crisis will hit apparel industry - Dian Gomes

By Lalin FERNANDOPULLE

[email protected]

The apparel industry will be one of the worst affected sectors due to the financial crisis in the United States, said Managing Director, Mas Intimates and Group Director, Dian Gomes.

He said the US is a strategic market for all major vendors in Sri Lanka especially in the apparel sector. Over the years Sri Lanka has been heavily reliant on the volumes arising from the US to maintain growth in business.

“US is Sri Lanka’s biggest export market generating over US$ two billion in export revenue a year. The US financial market crisis will have a knock on effect globally”, Gomes said.

Even the United Kingdom is beginning to feel the pinch as a result of the slowing down of the US economy. Our grave concern lies with the exporters who rely heavily on the US retail market and the strength of the dollar to maximise business potential. Today the country is faced with continuous price pressures and market de-growth emanating from the US which is proving to be a grave threat to our apparel industry.

With competition increasing from emerging economies such as Bangladesh and Vietnam in addition to the established players such as China and India, the apparel sector of Sri Lanka is continuously under pressure to remain cost competitive during these challenging times.

Gomes said with most macro and micro economic factors not being in our favour, it would take a lot of resilience on the part of the apparel industry to sustain business that has been maintained over the past twenty years. “With the current market scenario in the US, the apparel industry will be hard pressed to find alternative markets to fulfil the volumes”, he said.

The economic crisis in the US is the worst situation that the country has seen since the ‘Great Depression’ in the 1920s.

Every business in America relies on money flowing through the financial system daily not only to borrow, expand and create jobs but also to finance normal business operations and protect existing jobs.

When asked about the GSP Plus and its extension, he said it will be a crucial factor for Sri Lanka to retain the growing volume offered by the European Union. The GSP Plus is a clear differentiator for Sri Lanka on the cost front, enabling us to be cost competitive with global apparel giants and retain the market share.

“If the GSP Plus benefit is withdrawn and with the downsizing of US volumes the apparel industry will face the biggest market risk”, he said.

The Managing Director also said that success is all about good management. Good management requires the right people in the right place.

If a company is to be the best it needs people with the right level of knowledge, skills and attitude. “Being able to understand the mindset of those whom one leads is important to know what needs to be done to align them to a common vision”, Gomes said.