By Duruthu Edirimuni
Sri Lanka’s Joint Apparel Association Forum to boost the garment industry in the aftermath of pandemic recovery
The apex body of the Sri Lankan apparel industry, Joint Apparel Association Forum (JAAF) will be focusing on five key areas to grow the apparel industry in the coming years. This includes securing the booster shots for industry employees, retaining the GSP Plus scheme for the industry and better UK market access along with striking preferential agreements with other countries, increasing backward integration, enhancing competitiveness by growing the small and medium enterprise sector in the industry and positioning the industry globally.
In this regard, the Sri Lanka government vaccination rollout has been highly successful and now the challenge is to secure the booster vaccine for apparel sector employees, said JAAF’s new Secretary General Yohan Lawrence in an interview with the Textile Magazine. Lawrence with over 20 years of experience in senior management positions in the apparel sector aside from leadership positions with prominent industry associations succeeds Tuli Cooray, the association’s founder Secretary General, who stepped down after a long and distinguished tenure in the role. Cooray remains with the organisation as a consultant.
Geographical Expansion
Continuation of the special trade concessions extended to Sri Lanka beyond 2023 will be subject to compliance to the new GSP scheme that comes into effect from 2024, including compliance with the 27 EU conventions, he said, noting that the apex industry body is collaborating with the authorities on this. Lawrence pointed out that Sri Lanka is in competition with the likes of Bangladesh and Vietnam which have secured trading agreements with the UK and the European market. “So, to level the playing field we also need similar agreements. The GSP scheme has certain conditions attached to it particularly in relation to the country of origin of fabric but Free Trade Agreements (FTAs) may well have fewer conditions,” Lawrence said.
“Preferably some FTAs to major markets should be favourably looked at,” he added. He also pointed out that the GSP Plus scheme requires using Sri Lankan manufactured fabrics or those from the SAARC region. The task now is to choose either free trade agreements with major markets or an amendment to the current preferential agreement scheme, he stated. “This is an ongoing conversation. We are discussing with the relevant government authority on this.” Lawrence said. The EU is Sri Lanka’s largest trading bloc, accounting for over 30% of the country’s total exports in 2020 of which textiles and apparels accounted for around USD 1.8 billion worth of exports.
Now, maintaining those benefits past December 2023 is being and should continue to be promoted strongly, Lawrence said. The association has also brought back initial discussions with the authorities to start an FTA with China. Similarly, with the neighbouring India the industry is trying to push for the existing quota of 8 million pieces under the ISFTA to be increased up to at least 12 million pieces, Lawrence stated. The first phase of setting up of the Eravur Fabric Park is to be completed within a few months, he said, noting that by year end production will start coming in. This backward integration will play a crucial role in the post-pandemic recovery by having fabric nearer to the country’s needle point to counteract the external shocks of the pandemic.
Supporting SME Growth
Lawrence said there are around 60 small and medium enterprises which take on outsourcing for the major apparel sector companies. “They play a key role in the industry working as subcontractors. Developing them and assisting them to grow is a key part of the growth piece.” The importance of positioning Sri Lanka as a higher value, total solutions’ provider that works on sustainability is that other key pillar the association is working on, he said. Sri Lanka is recognised as a country quite focused on sustainability such as recycling garments into fabric. As such building on these unique selling points is on the agenda. Lawrence said that whilst the exchange rate issue in the country has impacted the apparel industry, exporters are now able to meet their US dollar requirements for raw materials.
He added that this would need to be addressed going forward in order to avoid it becoming a bigger issue. With the vaccination drive, the apparel factories are attracting big orders and workers are back into the swing of things, he said, pointing out that the export target is set at USD 6 billion which is almost a 20% increase from last year’s USD 5.1 billion. Social dialogue is a key component of the industry plan and in this respect the JAAF has signed an MOU with trade unions and is also working with the ILO on a bespoke ‘Better Work’ programme for Sri Lanka for training on occupational health and safety and gender diversity and inclusion issues. The Better Work programme will have elements focused on the SME sector.