Exports grew 3.4 percent despite EU’s GSP+ withdrawal:

Garment exports net $3,359.3 m in 2010

By Garmini Warushamana

The Sri Lankan Garment industry has again shown its resilience and competitiveness in the international markets under adverse external conditions even without any preferential treatment or concessions. Export figures for 2010 released recently show a marginal growth in export to the main EU and US markets.

Analysts say that export growth to the EU in a situation where GSP+ tax concessions have been abolished is an encouragement and the industry can go forward on its own.

The total value of garment exports in 2010 was $ 3359.3 million, a 6.4 percent growth compared to $3157.6 million in 2009. Exports to the EU market was $1702.2 million, a 3.4 percent increase compared to $ 1646.8 million in 2009. Exports to the US market has also increased by 5.8 percent to $1372.8 million against $1297.5 million in 2009.

The industry underwent negative impacts of the global financial crisis in the first and second quarters of the year.

The industry has shown a negative growth in the first and second quarters and the demand increased in the second half of the year with the recovery in main markets. A slight recovery was seen since June and July of the year and it picked up in October and caught up by the end of the year. However, there was a 34.4 percent increase in total exports during December 2010 compared to December 2009. During the month exports to the US and EU markets increased by 35 and 32.8 percent.

However, analysts said that export revenue would be much higher if the GSP+ concessions were available.

The industry faced serious challenges and have to export products at very narrow margins. Several external factors such as cost escalation in China and labour unrest in Bangladesh too contributed to aggravate the situation, an official of JAAF, the umbrella organisation of the industry said.

After the end of the 30-year war against terrorism the industry is now ready to leap forward with a new business plan, and a target of an additional US$ 1 billion export revenue.

JAAF has revised its five-year growth target and has set a new target of US$ 5 billion export revenue in 2016. As a solution to the shortage of workers, the industry strategically moved to the rural areas today because now it has proven to be the best location for this green manufacturing industry.

The industry contributes to reduce regional imbalance in development by injecting a colossal sum of money into the rural economy.

The industry is now eyeing the untapped human resources in the North and the East. Already nine investors have applied to set up factories.