Sri Lanka’s apparel industry targets 6 percent growth in exports this year
The apparel industry has reportedly stated that it is targeting a 6 percent year-on-year (YoY) growth in exports this year.
The statement has been backed by the move to set up a 200-acre fabric park with foreign investments in collaboration with Sri Lanka’s Board of Investment (BOI) in the country’s Eastern Province, eyeing to attract large-scale orders by reducing lead times with locally-sourced fabrics.
According to Sri Lanka’s Joint Apparel Association (JAAF), Sri Lanka’s apparel exports have grown by 5.8 percent YoY to US$ 4.8 billion during January-November last year, which has surpassed the initial expectations.
The Sri Lanka Apparel Exporters Association (SLAEA) has reportedly estimated apparel exports to have grown over 6 percent YoY to US$ 5.3-5.4 billion by end-2019.
“We are expecting growth to be around 6 percent overall for 2020, equally from both the United States (US) and European Union (EU) markets. The industry expects a significant growth to come from once the fabric park in Eravur is established, as we can source fabric locally, cutting down our lead times, instead of importing from overseas, especially from India and China. This is our main target for the year,” SLAEA Chairman Rehan Lakhany has told Mirror Business.
The apparel industry is currently awaiting the BOI to acquire the earmarked 200-acre land in Eravur to set up the proposed fabric park.
“Once the land is acquired, we will be working in conjunction with the BOI to develop the land and then will invite potential bidders to set up a centralised water treatment plant. Consequently, we will also invite investors from overseas to set up fabric mills and other finishing facilities in Sri Lanka,” Lakhany has noted.
According to reports, initially, the proposed fabric park is expected to attract foreign investments from China and India, in the range of US$ 50-100 million, to set up fabric mills and other finishing facilities, particularly from firms based in China due to the on-going US-China trade war.
“There’s lot of interest from international fabric manufacturers based in India and China. Many Chinese manufacturers have moved to Vietnam and Bangladesh. Sri Lanka hasn’t been on their radar so far as we didn’t have proper facilities in Sri Lanka. Once the zone is in place, there will be lot of Chinese investments coming in,” he has added.
OSL take:
The target set by Sri Lanka’s apparel sector of a 6 percent growth this year is part of the overall growth targets of the country’s exports sector. Sri Lanka’s exports sector has continuously been on a growth path during the past few years. The country’s exports sector has greatly benefited from the island’s geographical positioning in the Indian Ocean, the many trade agreements as well as trade concessions enjoyed by the country. The incentives offered by the government of Sri Lanka to promote Sri Lankan exports have further boosted the sector. Foreign businesses could therefore explore the opportunities in Sri Lanka’s exports sector.
| Article Code : | VBS/AT/20200109/Z_1 |