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- Textiles (including dyeing) - both woven and knitted
- Childrenswear, woven & knitted
- Ladies wear, woven & knitted
- Mens wear, woven & knitted
- Personal protective garments
- High fashion garments
- Accessories - such as buttons, zippers, embroidery,
- Labels, yarn, thread, elastic
- Garment Buying Offices
- Other
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Overview of the Sri Lankan apparel industry
The apparel industry in Sri Lanka plays a pivotal role as one of the main
economic revenue gainers in Sri Lanka. Today, the industry is a
significant contributor to Sri Lanka's economy. In 2006, apparel products
alone contributed to 50% ( GDP) of the country's export revenue and
accounted for approximately 40% of industrial production and two thirds
of industrial exports, whilst generating employment to nearly 340.000
persons.
The Sri Lankan Apparel Industry constitutes of 830 registered
enterprises in operation of which, about 75% to 80% are classed as
Small & Medium Enterprises (SMEs). As a result, there is a high
concentration of the apparel business in the large enterprises. Sri
Lanka's main export markets are the US, EU and Canada.
As Sri Lanka's largest export industry, the apparel sector has
considerable potential for development. The opportunity/potential is
based on the following facts. Although currently customers develop most
of the design specification, a few Sri Lankan enterprises have developed
their capabilities to match international design standards. The potential
therefore exists for Sri Lanka to become a total service provider for the
global apparel industry.
Sri Lanka, at present, manufactures the entire range of apparel with no
attention given to specific product categories. However, with the
increasing sophistication of the market coupled with the skill, training and experience of the labour force Sri Lanka is seriously considering
specializing its production / output so as to become internationally
acceptable as a superior manufacturer of specific product lines.
Sri Lanka's competitive advantages in the garment sector
- A well established, export oriented manufacturing industry.
- A ready supply of raw material and an expanding resource base.
Products manufactured include buttons, zippers, hangers, yarn, thread,
fabrics, interlinings, packaging, elastic, padding, quilting, etc. The
services offered range from, dyeing and finishing, screen printing,
embroidery, training, washing, etc.
- A literate, trainable workforce. The work force is highly productive, has
good hand to eye coordination, proven precision and dexterity. The World
Bank has ranked Sri Lanka far ahead of other SAARC and ASEAN
counterparts in human resources. The Sri Lankan apparel industry is also
recognised worldwide for adhering to international best practices in labour
standards
- Sri Lanka's geographical location & infrastructure advantages.
- Compliance with the best international labour and environmental laws
and practices.
- Prevailing Electronics Visa Information System (ELVIS).
- Market and investor friendly policies of the government.
- An array of attractive incentives extended for the textile/apparel industry.
Preferential access provided by the EU through the GSP Plus concession
scheme.
- Unlimited quota free access to the EU markets.
- Preferential access to the Indian market including duty-free
concessions provided by the Free Trade Agreement (FTA) between Sri
Lanka and India.
Overview of the Dutch apparel industry
The Netherlands ranked 7th as EU importer of outerwear with an import
value of EUR 4.4 billion in 2004, of which 53% came from developing
countries (DCs). Germany, China and Turkey were the leading suppliers
of outerwear to The Netherlands. Imports from Asian developing
countries grew by 6.2% (mainly China, but also Bangladesh, Thailand,
Vietnam and Cambodia). There are around 10,700 outlets in the
outerwear sector exploited by 6,400 companies, of which 60% can be
classified as independent retailers. Price is a key determinant of
competivity, especially in the lower segments of the clothing market,
whereas in the higher segments (higher added value) factors like quality
and fashion are more important than price. In the lower segments of the
clothing market, retailers have little room to manipulate prices because
competition is very fierce and margins are leading them to source
products in low-cost countries and, probably, of products with a higher
design content. The middle range market segment offers a lucrative
business opportunity to developing countries like Sri Lanka. However
Dutch-Sri Lankan links in the apparel front have been limited. There is
great scope for Sri Lankan companies to seek out business partners in
the highly cosmopolitan culture where it is estimated the number of
garments purchased per head of population will continue to rise but
prices will not follow this growth rate.
Potential areas for Trade & Investment |
Positive developments in spending on children's outerwear including
babies wear is estimated in the coming years. Forecasts for women's
and men's outerwear depict a higher growth in volume than in value.
Whilst growth is estimated in the smart casual wear segment at the
expense of formal wear, growth in leisure wear and sportswear is
estimated to be laggardly.
Expenditure on outerwear in The Netherlands is forecast to grow by
7.2% during the period 2005-2007, resulting in EUR 9.6 billion in 2007,
of which women's outerwear will reach EUR 5.0 billion. Wholesalers,
importing manufacturers, clothing multiples, buying organisations and
non specialised chains, like hypermarkets, discounters, home
shopping companies, department and variety stores and sports chains
are potential trade channels for exporters in Sri Lanka.
Sri Lanka has low technological, product, and design know-how. Joint
venture business partnerships and building strategic alliances are
encouraged as an effective way of importing this knowledge in to the
Sri Lankan industry.
- To develop backward linkages with the apparel industry
- Currently Sri Lanka's average manufacturing lead time is a high of 90
days when compared to the competitors of the region. Strong backward
linkages are therefore essential for Sri Lanka to establish a “one stop
shop” for apparel requirements by building a strong support base and
thereby effectively reducing lead times for the industry.
- To establish forward linkages
- The apparel industry is heavily dependent on international buying
offices for export orders. With the abolition of the quota system in the
year 2005, the global apparel industry made a significant transition to
that of a buyer's market forcing Sri Lankan industrialists to market their
products directly to the buyer. By enhancing product development and
further developing the marketing, design and logistics capabilities;
Sri Lanka will be in a better position to establish direct links with
international brand names thereby escalating up on the value chain.
- To invest in technology.
- In order for the Sri Lankan apparel industry to be competitive globally it
is of vital importance that the manufacturer focuses on upgrading their
technology. Investment in technology can be broadly categorized as;
- a) Process and manufacturing technology
- b) Marketing technology
- c) Information technology
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