No Plan B for Apparel sector

The apparel sector has no backup plan to face the global downturn and is struggling to garner the benefits of the government’s relief package.

Despite terming the demands of the government to retain staff and maintain productivity as “impractical,” Joint Apparel Association Forum (JAAF) Chairman Ajith Dias admitted that the stimulus would give the industry the chance to pursue aggressive growth in beleaguered times. However, he noted that retention of GSP+, adjustment of the exchange rate, reduction of utility costs and a competent stimulus package were essential for this turnaround. If these infusions do not come, however, the apparel sector has no other plans, according to Dias.

“The industry target remains a confident US$ 5 billion and consolidation of factories is to be expected during this time. By the end of this year we expect the number of garment factories to reduce to around 200. There are strong expansion opportunities in the Eastern Province and we have been approached by the government to make investments. Three garment factories are already under construction and a training facility has opened up in Samanthurai to feed this addition. Regional collaboration is vital as well,” he said.

Dias presented the interesting idea that Sri Lanka’s competitors India and China could be encouraged as markets through bi-lateral agreements, with Japan and Russian following close on their heels. However, internationalisation of micro problems particular trade unions “have made problems that are self inflicted” aggravated by massive brain drain to even countries like Thailand and Bangladesh, the latter employs over 1,000 middle managers from Sri Lanka. 10%-15% downturn is expected in the global market making the rest of 2009 gloomy indeed.