Sri Lanka apparels enter breakthrough year amid calls to move on from GSP Plus partying
With 2018, the Sri Lankan apparel sector has entered a breakthrough year in its history of exports. Meanwhile, the industry leaders joined by a Cabinet minister say that increasing apparel exports and receiving trade benefits such as the GSP Plus facility, should not blind the sector but the industry should move on and face the emerging challenges to advance to the next level.
“After regaining GSP Plus, our apparel exports increased and we are now eagerly looking forward to surpass the US $ 5 billion annual exports value this year, compared to the US $ 4.8 billion in 2017,” said Industry and Commerce Minister Rishad Bathiudeen.
He was addressing the launch of the eighth AISEX and FASE apparel industry sourcing expo at the BMICH, Colombo, yesterday.
The three-day biannual event exhibits apparel industry tech and new trends to manufacturers and the next expo in this series is scheduled in 2020.
Bathiudeen added, “Therefore, we expect this year to be a breakthrough year for our world-class apparel sector. We can already see this new trend in our 2018 first quarter apparel export performance. In the first quarter of this year, our total apparel exports increased by 4 percent to US $ 1.26 billion, compared to last year’s first quarter exports of US $ 1.21 billion.
Last year first quarter US $ 1.21 billion was actually an 8.2 percent decline from 2016’s first quarter apparel exports of US $ 1.31 billion. Therefore, we expect this year to be a breakthrough year and I commend our entire apparel sector for their great commitment and excellent performance.
However, I wish to say that we should not be blind to the present and upcoming challenges for our apparel sector. It will be difficult for us to move to the next levels without resolving these issues. Our annual apparel exports are close to US $ 5 billion but we spend close to US $ 4 billion to import the raw materials and therefore we need to improve on the imports bill on our apparel material sourcing.
Europe is a key market but it is undergoing changes due to the increasing unemployment and policy uncertainties after Brexit. The solution to overcome such possible market pressures is the continuous diversification of our apparel exports to new markets.
Adopting sustainable manufacturing, market diversification, sourcing more from nearby locations such as SAARC countries and switching to emerging technological trends can help us to face these challenges.”
Sri Lanka Apparel Institute Chairman Prof. Lakdas Fernando warned the apparel sector’s optimism on regaining GSP Plus.
“In my view, GSP Plus is a ‘transient popup’ for our apparel sector. This gain is only for a short period of time. We need to adopt strategic thinking to meet the challenges in the changing scenario. Even to get the best from the GSP concession, a lot needs to be done. The winds of change are rippling across global industries and it is very much evident in the apparel sector too – in CAT tech, digital printing and digital designs,” said Prof. Lakdas.
Joint Apparel Association Forum Secretary General Tuli Cooray said that Sri Lanka is at a critical stage as the country is moving for a very ambitious reform agenda.
“New export strategies, new facilitations and new maritime changes are brought in to eradicate poverty. In this process, various industry sectors, including apparels, play a key role. A majority of our labour force is in this industry and this sector is also a major contributor to our GDP.
Therefore, the so-called GSP Plus relief will offer you benefits for a very limited period of time. And we have to ensure that we (ourselves) will raise the bar to the next level through new skills and new technologies. Our industry should be exposed to the new global trends, to move forward.”
Europe is a key market for Lankan apparels. Last year Sri Lanka earned US $ 2 billion from apparel exports to the European Union (EU), which was 42 percent of total apparel exports. In the first quarter this year, Lankan apparel exports to the EU increased by 5.2 percent to US $ 526 million, in comparison to US $ 500 million in the first quarter of 2017. Apparel exports to the US too increased by 5.1 percent in this year’s 1Q to US $ 576 million, from 2017 1Q’s US $ 548 million.