Apparel suppliers in Sri Lanka are leading money earners, the apparel industry’s origin goes back to simple inceptions. In the 1960s, the business mostly manufactured fabrics and garments for the private market; and that too, beneath thick shelter. Trade-aligned garment production – i.e. of readymade clothing – only started in the 1970s, and quickly grew after the relaxation of the Sri Lankan finances in 1977.
GLOBAL ATTENTION At that point, the apparel trade profited extremely from East Asian garment suppliers in Sri Lanka who were attracted by Sri Lanka’s progressive trade government. Duly, they attempted to move their set garment trade to the island, firstly owing to inexpensive employment and combined cheap manufacturing price.
This height of foreign venture also supported our business set to initiate its brand of garment plans. They were able to maneuver markets backed by quotas. Native apparel businesses were helped by the progressive trade government for imports, and many inducement permitted by the Board of Investment (BOI) of Sri Lanka. These included concessions such as tax holidays, as well as other fiscal and non-fiscal incentives.
THE GROWTH CURVE Apparel exports grew rapidly during the 1980s, accounting for the largest share of all exports (27%) by 1986. And in 1992, the BOI provided reasons for producers to move their enterprises to country districts of the island, beneath the 200 Garment Factories Programme (200-GFP) – reviewed by most to be a moment of truth in the history of the Sri Lankan apparel production.
Beneath the 200-GFP, the BOI managed to help commence 163 mills by 1995. And by 1992, our apparel production had grown into the biggest foreign exchange earner for the country, making close to US$ 400 million. It even passed the tea productions foreign exchange influx.
As stated by the BOI data, by 2002, the island’s fabric and garment subdivision counted for six percent of GDP, 30 percent of factory manufacturing, nearly a third of the production staff, around half (52%) of total trades and just over two-thirds of factory trades.
INDUSTRY DYNAMICS Sri Lankan apparel producers create a broad range of globally marked attire, counting Victoria’s Secret and Liz Claiborne, Pierre Cardin also Nike as well as Gap. BOI-endorsed enterprises are said to count for nearly 90 percent of Sri Lanka’s complete apparel trades.
Even though it began its profession as a sewing engineer (a contracted manufacturer), and relied on the fabric allocations provided by the United States and the European Union, the business has since changed itself into a total apparel solutions contributor.
A considerable amount of apparel schemes functions inside the Western Province. This indicates that chances for factories are available in developing regions, where there is adequate enrollment– a budding restraint in the Western Province. Hence, the business is now approaching potential financiers who would organise assignments in developing regions, counting the Northern Province, mainly in the post-war surroundings.
THE EXPORT CURVE The Central Bank of Sri Lanka (CBSL) announces that incomes from factory trades developed by 5.1 percent year-on-year (y-o-y) to US$ 7,749 million, in 2013, mostly because of the enhanced function of fabrics and clothes, which portrayed in surplus of 43 percent of complete trade incomes.
In 2013, incomes from fabrics and attire trades grew by 13 percent y-o-y, to 4.5 billion dollars, beating the US$ 4 billion goal placed by the apparel production. Traders to the EU and the US (Sri Lanka’s leading trade countries) registered a yearly development of 6.8 and 21 percent accordingly.
“Market variety, purchase of specialist awareness, upright and reverse combination, and considerable prominence on pursuits at the tall part of the merit trail donated to the durable rendition in the fabric and garment business. The growth in merit inclusion has lessened import reliance in the business, as mirrored in the deterioration in [the] import of fabrics and cloth articles in 2013,” “Therefore, the normal import reliance proportion for the total garment business reduced to 45 percent in 2013, from 57 percent in 2012.”
REGIONAL CHALLENGES Fabric exporters in Sri Lanka do work in a growingly ambitious market scenery. India, China as well as Bangladesh are all set players in the area, while countries like Vietnam and Cambodia are also starting to make their attendance felt.
What could likely place Sri Lankan apparel separately from the others is the standard of produced items, which are manageable with futuristic producing applications. The business now recruits an experienced and expert staff. A prominence on moral producing stages is also an added point for the Sri Lankan apparel business, providing worldwide dealers the brand preservation they want.
STATE MEASURES The Government is searching to place Sri Lanka’s apparel business amid the top 10 standard producers in the world by 2020. To this end, a 300 percent tax quotas have been endorsed for R&D ventures implemented inside the business.
Additionally, with the focus of advancing the purchase of universally known clever belongings – for instance, brand names for native items – tax removals have been offered for costs sustained in the purchase of such entitlements, and for any earnings received in foreign money because of these royalties.
The Central Bank also records that the tax on items from abroad of natural cotton woven textiles and other fabrics was lessened to Rs. 75 and Rs. 100 a kilogram accordingly, to lessen the price of the manufacturing of fabrics and garments.
“Moreover, to encourage the contribution of natural fabrics and other resources needed for the manufacturing of fabrics and garments, a cheap tax cost of 12 percent that was enforced on gains and earning acquired from the contribution of particular resources to garment merchants was additionally increased.
FUTURE PROSPECTS Efforts to grow market piercing for Sri Lankan fabrics and garments have included delegates from the Joint Apparel Association Forum (JAAF) touring likely markets like China, Japan, Russia as well as Brazil, to check the chance of acquiring special entry to these huge markets.
Sri Lanka is operating towards reaching an apparel trade goal of 10 billion dollars by 2016. And it has considerable aspirations to inhabit a place amid the world’s top 10 apparel trading countries by 2020.
In accordance with Central Bank statistics, fabric and garment trades from Sri Lanka developed by 20 percent y-o-y, to 1.3 billion dollars, in the first part of this year. Truly, this style bodes well for the apparel businesses aspiring future schemes.