Lanka eyes Japanese investments for handloom industry

The apparel and handloom sectors have immense potential for foreign investors. Sri Lanka will open these sectors for Japanese investors said Industry and Commerce Ministry sources.

He said the $ 13 m handloom sector has strong investment potential.

The country has skilled labour in the apparel sector compared to other manufacturing destinations providing low cost labour.

Sri Lanka’s human resource capacity has resulted in high quality apparel exports.

The demand for Sri Lankan handloom has been growing at a rapid pace in local and international segments.

Sri Lanka’s booming tourism factor has become a key driver in the handloom surge. To strengthen the sector, the Ministry of Industries set up a high priority national Handloom Task Force.

The task force, will upgrade the sector with product diversification, new training, design development and marketing. District level handloom centres will be set up under private sector management.

“Our promising handlooms can utilise valuable Japanese support in this new direction. Sri Lanka is keen to increase its share of apparel exports to the Japanese market”, he said.

The handlooms sector will help develop the rural economy.

The Divineguma, program will support rural development. The next Divineguma exhibition will be held in Mannar on January 21.

According to the Department of Commerce of Sri Lanka, Foreign Direct Investment (FDI) by Japanese companies into Sri Lanka dates back to the 1970s; the first milestone was in 1972, with the establishment of a joint venture between Noritake of Japan and the Ceylon Ceramics Corporation.

Since 1996, a number of large multinational conglomerates including NTT, Mitsui Group, Kawasho Corporation, and YKK have committed substantial investments in large infrastructure and manufacturing projects.

At present, there are about 60 enterprises with Japanese investment, operating in Sri Lanka under the BOI Law at end of 2009, having invested about US$ 350 million, and providing more than 12,000 employment opportunities.

Among the leading Japanese projects in Sri Lanka under BOI are Ceyquartz M B I (Pvt) Ltd, Colombo Power (Pvt) Ltd, Colombo Dockyard, Dankotuwa Porcelain, F D K Lanka, Koolair Venture Power, Noritake Lanka porcelain, Tokyo Cement, Uchihashi Lanka, and Okaya Lanka.

Currently, Sri Lanka handlooms, in addition to the domestic market, are readily absorbed by Italy, the Maldives, Germany, France, United Kingdom, Thailand, Netherlands and Norway.

According to the Exports Development Board (EDB) under the Ministry of Industry and Commerce, the handloom exports valued $ 0.90 m in 2009 rose in 2010 to $ 1.5 m and in January-October 2011, stood at $ 1.17 m. The EDB expects handloom exports to hit $ 2.24 m in 2015.

The handloom textile export target for 2011 set by the EDB under the Ministry of Industries was $ 1.29 m (Rs 146 million). Sri Lanka’s handloom sector is a low cost but high earning industry.

Its annual production exceeds six million metres of loom with an estimated annual production value of Rs. 1500 m ($ 13.19 m) and absorbed by local and international demand.

The production is labour intensive and the industry consumes less electricity and utilities while generating higher employment.

At present, there are 511 weaving centres with 2,971 weavers and more than 10,000 looms in Sri Lanka assisted by 22 dyeing houses. Over 10,000 personnel are engaged in the handloom industry.

According to NEDA, there are 919 private sector handloom operators of which 536 are based in the East, operating 2454 looms.

In the cooperative sector, there are 925 handlooms in 110 centres and under the Provincial Councils there are 5169 handlooms in 511 centres. The key Lankan provinces for handloom are the Wayamba, Western, and Central provinces.

The eastern regions of Sri Lanka too were reputed for handloom but the 2004 tsunami disaster inflicted damage on eastern production, however, but despite this, eastern handlooms continue to command buyer appeal.