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z p-i-dailynewsbrandix-01Brandix inaugurated Brandix India Apparel City (BIAC), a 1000-acre apparel park at Vishakhapatnam in India on Monday. Brandix was represented by its Board of Directors led by Group CEO Ashroff Omar and the Sector Director for BIAC Feroz Omar.BIAC forges a strong link between the apparel and related ancillary manufacturing capabilities of Sri Lanka and India, and builds a vast pool of synergies that will add infinite capacity and depth to the South Asian region at a time when economies of scale are critical to growth.

Last week at the Sri Lanka Designer Festival’s Ethical Symposium attracted some of the best names in the Apparel Industry with key-buyers from retailers like Zaras, Top Shop, Monsoon and respected industry experts like Collin McDowell and Douglas Miller.The highlight of the event was the call by the Industry heavyweights to practise ethical purchasing which will support the Sri Lanka’s proposition of branding the country to be “Destination for ethically manufactured fashion apparels in the world” and if this is not done, Sri Lanka can become Ethically unemployed.

Over the last decade as Asia emerged the leading outsourcing destination for the global fashion industry, Sri Lanka stood alone as the only country that embraced ‘Ethical Business and Manufacturing Practices’ as a way of life. And with the aid of the Government of Sri Lanka through the Ministries of Finance, Industrial Development and Export Development and International Trade that has always been proactively supporting the cause,

Sri Lanka Apparel is today the world’s No 1 ethical apparel sourcing destination.

Sri Lanka’s apparel industry says it would take its campaign for ethical manufacturing practices called ‘Garments without Guilt’ to the next level by promoting sustainable manufacturing and encouraging garment factories to go green. The Garments without Guilt (GWG) campaign was launched by the Joint Apparel Associations Forum (JAAF) several years ago to educate western retailers that Sri Lanka’s

garment industry upheld international labour standards where factories were not sweatshops, provided decent working conditions and other benefits to workers, and where children had no place in factories.

The EC and the government are looking at developing a Road Map to retain the EU’s GSP+ duty free export scheme. “We will, after consulting with the Sri Lankan authorities, issue what we call a Road Map, which will address the concerns raised in the final report (of the investigation),” said the Ambassador for the EC in Sri Lanka, Bernard Savage, speaking at the AGM of the Sri Lanka Apparel Exporters Association this week.

The government, said Mr Savage, is even now prepared to start this process. The Road Map, which is a commitment by the government to address concerns raised by the investigation, could retain the GSP+ scheme, even if the EC recommends the EU member states to suspend the GSP+.

The Ambassador said the government’s response to the EC investigation report will be “examined extremely thoroughly and seriously.” However, the EC will make a recommendation to the European Council, on whether or not to suspend the GSP+ scheme, based on its investigation findings.

“The next step will be a recommendation by the Commission to the Council, our member states. The recommendation must be based on the conclusions of the final report. That is a legal obligation,” said Mr Savage.

So at this point, the EC may recommend suspending the GSP+. “The recommendation at this stage, could well be for suspension,” said Mr Savage. After the EC recommendation, the Council will have two months to arrive at its own decision. However, if the Council decides to suspend the GSP+ scheme, the GSP+ will be suspended only six months after the decision is taken.

Meanwhile, a ‘Road Map’ is to be developed by the government and the EC, to address the concerns raised by the investigation. The Road Map can convince the EU to allow Sri Lanka to retain the GSP+.
“We will engage in a dialogue on the Road Map and on specific actions, to address concerns,” said Mr Savage.

“Our engagement with the Sri Lankan authorities before the suspension of the GSP+, would allow us to review the recommendations, so that there is no break in the concession,” said Mr Savage.

Export impact
Apparel exporters say the GSP+ has helped grow exports to the EU even at times of global downturn. This growth, say exporters, may not happen without the GSP+ behind Sri Lankan exports.
“Our exports to the EU have seen steady growth over the last several years, not least due to the GSP and GSP+. If we are to lose this concession, which I sincerely hope not, I fear for that growth,” said the Chairman of the Sri Lanka Apparel Exporters Association, Kumar Mirchandani, speaking at the AGM.
The latest export data from the Joint Apparel Association Forum (JAAF), the apparel industry representative body, shows that total apparel exports in September, dropped by 4.7% in value, compared with September 2008. Exports to the US fell by 19.2% but exports to EU increased by 8.5% in September 2009.

Total apparel exports during the nine month period of January to end-September 2009, reduced by 3.6% over the corresponding period last year. The largest losses were in the US, where export incomes dropped by 13.2% in the first nine months of this year. Export earnings from the EU increased by 4.3% up to September this year, despite the recession.

GSP+ not working for workers
Meanwhile, workers rights groups are calling for mechanisms to be introduced into the GSP+ trade scheme, to allow trickle down of benefits to workers. At a press conference on Thursday, ALaRM, a trade union and non-governmental organisation coalition, pointed out that although the EU’s GSP+ preferential trade scheme is expected to help reduce poverty, the scheme has no inbuilt provision to ensure distribution of benefits to workers.

ALaRM maintains that the EU’s GSP+ trade scheme has overwhelmingly benefited the corporate and employer category, and that the working masses have not enjoyed comparable benefits. While corporate incomes and profits have grown because of the GSP+, worker wages and work related benefits have not kept pace.

In fact, in Sri Lanka, workers in garment factories, the biggest users of the GSP+, have seen job losses and cuts in welfare measures. Employers attribute these adverse developments to recession impacts.
However, trade unions note that exports to the EU have increased and not decreased, while worker benefits have decreased, indicating that trade growth benefits are not accruing to workers.

“Our main concern with the GSP+ is that the benefits from the GSP+ are going only to employers and company owners. The workers do not get any benefits from it,” said the spokesperson for the Stand Up Movement, Ashila Mapalagama. The Stand Up Movement is a non-governmental organisation involved in apparel sector worker welfare and is a member of ALaRM.

“So if the GSP+ is going to be available in future, we say it should have some mechanism to allow benefits to reach down to workers, as well as employers,” said Ms Mapalagama. ALaRM is also calling on local authorities to ensure that GSP+ withdrawal, will not adversely impact the working masses. The garment industry alone is estimated to employ around 230,000 people.

The government has so far maintained that exports to the EU will not be drastically affected by the loss of the GSP+, if it is withdrawn. The Central Bank for instance, said that domestic cost reductions, coupled with rupee depreciation against the euro and the sterling pound, would give exporters a competitive edge even without the price advantage provided by the GSP+.

Economic impacts are also expected to be limited, as only a portion of Sri Lankan exports ( even in the apparel sector) actually use the GSP+ to export to the EU. At this point the apparel export sector is the most dependent on the EU’s GSP+ trade scheme.

z p-i-gsf-01The Global Shippers’ Forum (GSF) has called upon different sectors of the freight and logistics industry for more collaboration of a constructive nature with the GSF and its members.

The joint development of best practices, the building of awareness and promulgation of good practices will help improve safety, remove inefficiency and expose areas where door-to-door service performance can be improved, Asian Shippers’ Council Secretary General Rohan Masakorala told Daily News Business.

z p-i-mas-01The challenges before the apparel industry are to achieve quality, timely delivery and matching international standards to meet the high international competition in the global market to remain as an industry with growth and profitability.

 

Innovation plays a key role in this effort and local apparel manufacturers should attempt to improve innovative products to achieve as an industry, Chairman, MAS Holdings, Mahesh Amalean told Daily News Business.

He said if the European Union decides to continue the GSP+ concession it would not only be beneficial to the apparel industry, but also to all other industries or exporters who target the European market.

b23mwoazhr3r2m45kqyki155 mass-openingnewThe varied concepts of each firm are an unique identification of what they are. When the region’s largest supplier of intimate apparel and sports and active wear adhered to the concept of ‘philosophy of partnership’ little did they know that this unique concept will serve them in the way it has now.

“It was this concept that attracted the eyes of NIKE, Inc. to MAS and got them considering an Apparel Innovation and Training Centre at the MAS Fabric Park in Sri Lanka,” said Chairman MAS Holdings, Mahesh Amalean at the launch of the Apparel Innovation and Training Centre at Thulhiriya.

Sri Lanka is looking forward to a further downgrading of its war risk ratings towards the end of the year or before. We are grateful to the political leadership, the defence forces and the police for defeating terrorism and ending the war which will have a positive bearing on the ratings, said the Convenor of the Asian Shippers’ Council (ASC) AGM Rohan Masakorala.

The ASC AGM will to be held from August 13-15 in Colombo. The country’s war risk rating was revised from severe rating to high-risk rating.

The Joint Apparel Association Forum (JAAF) is targeting a turnover of over US$ 3.3 billion, through apparel exports this year.“We expect a turnover of US$ five billion by the end of 2011. The performance of the apparel sector in the first quarter of 2009 was quite impressive,” said Secretary General, Joint Apparel Association Forum, Rohan Masakorala.

At present, orders for summer and winter look steady this year, but the SME sectors are going through a bit of a tough time. However, the companies will be better off as soon as the global economy improves.

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JAAF 

Sri Lanka Garments

SLAEA Magazine Front Cover 2Journal & Directory of the Sri Lanka Apparel Exporters Association, containing valuable information with regard to the apparel industry.
Issue No. 90

 

Contact :
Sri Lanka Apparel Exporters Association,
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Tel: +9411 2675050, 2674528 
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