Compiled by Isanka Perera
SOWING THE SEEDS OF SUCCESS
Yohan Lawrence mulls over the apparel industry’s trials and tribulations
Q: In big picture terms, how do you view Sri Lanka’s apparel landscape today?
A: Sri Lanka’s apparel industry is globally reputed for its high level of quality and reliability; it accounts for 40 percent of the country’s exports. Our top markets are the US, EU and UK, which together account for 85 percent of the nation’s apparel exports.
The industry employs over 350,000 people, and touches the lives of more than a million directly and indirectly. We have always espoused the ‘triple bottom line’ approach to building and sustaining businesses, in terms of economic, social and environmental impacts.
Since the launch of our Garments Without Guilt programme, which was a world first, we have been engaged in sustainably manufacturing and implementing a circular fashion process.
Q: Could you elaborate on the industry’s contribution to the economy?
A: Sri Lanka’s apparel industry contributes six percent to the country’s GDP and accounts for almost half of all merchandise exports.
Even amid the challenges so far this year, apparel export earnings have continued to grow – by almost 30 percent to US$ 446 million in May compared to a year earlier when it registered 344 million dollars.
Our target this year is US$ 6 billion – a figure we are confident of achieving even in the current environment since our foreign partners continue to trust our ability to deliver their stringent demands on time.
Q: Is the US$ 8 billion goal for Sri Lankan apparel exports by 2025 viable?
A: The industry has maintained its year on year revenue growth despite facing unavoidable challenges so far this year. Being able to purchase diesel directly using the industry’s export earnings has helped maintain production schedules and the flow of revenue in recent months.
The next few months will be telling in terms of the industry’s ability to retain this growth. If we go along a similar trend, we’ll certainly be on track to achieve our eight billion dollar goal by 2025.
Q: How will the five point framework formulated by the Joint Apparel Association Forum (JAAF) contribute to sustaining long-term growth of the industry?
A: Though it was developed in response to the pandemic, the framework remains relevant even today; it covers worker safety, backward integration, collaboration with authorities, protecting the industry’s global reputation and ensuring the SME sector’s competitiveness.
It was developed using inputs from across the industry and the programme aligns with the requirements of all manufacturers, both large and small. While the current challenges go beyond those faced during the pandemic, these five areas still remain the key elements required for the industry’s sustained long-term growth.
Q: What impediments are undermining the apparel industry’s prospects?
A: Two key factors that could potentially undermine the industry’s long-term grow¬th are the lack of stability and restricted access to markets.
Stability in the economic, social and political spheres is essential for growth because investors would want a stable environment if they are to commit to funding. Expanding access to key markets has been a primary task of the apparel industry as Sri Lanka is at a disadvantage compared to its competitor countries. Our export penetration remains focussed on the US, EU and UK.
Establishing new trade agreements with other key markets, as well as removing and expanding quotas under existing trade agreements, are two steps that can be implemented.
Q: Is the industry being supported by the government? And what more needs to be done to create a favourable business environment?
A: What is imperative for the industry right now is a stable environment to continue its operations unhindered. The government must expedite reforms – both economic and political – to enable a stable, predictable and consistent business environment.
It should also help facilitate and promote new projects and investments to boost exports – including the promotion of projects in the Eravur Textile Zone to build strong¬er backward integration links.
Q: Could you outline the importance of the Generalised Scheme of Preferences Plus (GSP+) for the apparel industry?
A: GSP+ has played a significant role in the development of Sri Lanka’s economy while strengthening and supporting the apparel industry. The EU and UK are major markets for us; together, they receive 42 percent of our apparel exports.
We will continue to advocate for the retention of GSP+ privileges beyond December 2023 – ideally with a relaxation of the rules of origin on fabrics.
Q: And what’s your take of the industry’s future?
A: For more than 30 years, Sri Lanka’s apparel industry has meticulously built a reputation that reflects the highest level of reliability, quality and technical capabilities. The apparel industry must maintain its hard-earned reputation at all costs with long-term economic and political stability being the key.
However, the industry’s vision goes beyond revenue growth as we want to increase global partnerships, create more innovations that can be commercialised internationally and develop a strong talent pool that can be deployed the world over.