Sri Lanka Apparel Industry Tops $ 4bn for the First Time

10th February 2012, www.dailynews.lk, By Sanjeevi Jayasuriya

Sri Lanka’s apparel industry has surpassed the US $ 4 billion mark for the first time in its export earnings reaching $ 4.09 billion for 2011.

The industry tops $ 4 billion in foreign exchange for the first time and this impressive performance has also recorded a 22 percent growth over 2010 where the earnings were $ 3.2 billion. This shows that the country’s apparel industry is resilient and we need to take measures to sustain the growth, Joint Apparel Association Forum Secretary General M P T Cooray told Daily News Business.

We have now a bigger challenge to sustain the $ 4 billion level. This is largely due to the recession in the West. The USA and Europe are our biggest markets. However, we do not consider this as a serious threat as during the past we have overcome many difficulties successfully, he said.

The resilience of the industry has proved that we can face any challenge and there will not be any considerable drop that will effect us.

We believe that the rising cost will have a negative impact in sustaining the earnings. The policy framework to prudently manage the rapidly fluctuating exchange rate as proposed in the 2012 budget is timely as if not the market will dictate terms.

The apparel industry continues to aggressively penetrate new markets and it has focused on a number of markets outside traditional markets.

Additionally the country is looking at identifying growing markets such as India, China, Japan and Brazil and also looking at entering Turkey and Spain.

Though these markets are available there are certain barriers to penetrate. India has restricted our export by allowing only 3 million pieces of unconditional quota and 5 million pieces based on Indian fabric. Japan on the other hand has a number of bilateral agreements which provide tax concessions to our competitors. China and Brazil has higher tariff on a global basis this will also be a concern for Sri Lanka.

“We are working hard to becoming an apparel hub and will promote introducing legislation to set up international operations shortly to facilitate this effort. We are hopeful that the Act will be introduced by next month. With the target to become a $ 5 billion plus industry by 2015, Sri Lanka’s apparel industry is focusing on a continuous high growth trajectory,” Cooray said.

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