Sri Lanka’s apparel industry back on track to meet US$ 6 billion target for 2022
The Morning: Sri Lanka’s apparel sector is back on track to achieve its export target of US$ 6 billion for 2022, after the power and energy crisis which hindered its production was solved by allowing it to buy fuel directly from Ceylon Petroleum Corporation (CPC) and Lanka IOC (LIOC), Joint Apparel Association Forum (JAAF) Sri Lanka said.
Speaking to The Sunday Morning Business, JAAF Secretary General Yohan Lawrence stated that the Government was now allowing apparel exporters to directly purchase fuel from the CPC and the LIOC by paying in US Dollars, and as a result they had been able to secure their requirement of diesel not just to avoid power cuts but also for factories and transport.
“The biggest issue was diesel and power,” he noted.
Further, he said that liberalisation of fuel imports by the Government could benefit them in the long-term.
Lawrence said protests in the country have had no impact on the functioning of the sector as protests were carried out peacefully and the ports and ships were operating as usual.
However, certain Indian media reports stated that following the economic crisis in Sri Lanka, Indian apparel exporters were beginning to receive orders from the UK, EU, and even Latin American countries, where Indian textiles had little to no presence.
The Indian news website Mint reported: “Much of the tea orders have already started moving to India and now a similar trend is being witnessed in the textiles sector.”
Lawrence said that there was no truth in the reports of losing orders to competitors in the region, as apparel orders did not function in a manner similar to purchasing tea.
“All these products are developed over a period of time. So they can’t suddenly decide they are going to stop buying from Sri Lanka,” he added.
But he said individual companies that have presence in regional countries would look to move their productions to those companies in the short-term.
According to the Export Development Board (EDB), apparel exports recorded a five-year high in March with US$ 488 million, despite the extended hours of power cuts experienced during the month.
The EDB records that the total apparel exports in 2021 amounted to US$ 5.4 billion and export earnings between January to March 2022 had reached pre-pandemic levels by recording US$ 1.4 billion compared to US$ 1.39 billion in the same period of 2019.
The industry has set a target of US$ 8 billion for apparel exports by 2030.
Sri Lanka’s apparel industry is one of the key foreign exchange revenue generators in the country. The many trade agreements and concessions enjoyed by the country have also helped boost Sri Lanka’s exports, especially apparel exports. The industry has been resilient in the face of challenges faced due to the pandemic and managed to record a growth even amidst the pandemic. The government of Sri Lanka is also focused on further developing the country’s apparel industry by setting up the required supplementary infrastructure facilities. The proposed fabric park is one such example where the authorities are focused on increasing the competitive nature of Sri Lanka’s apparels. Given the growth momentum in the country’s apparel industry and its growing business potential, foreign businesses/investors could confidently explore the opportunities in the industry.
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