Local textile manufacturers appreciate the Government’s proposal to set-up textiles clusters, set out in the budget speech 2017, which is a positive approach towards developing the industry.
The local textile industry was set up by pioneers in the field during the 1950s and some such industries were Wellawatta Mills, J.B. Textiles, Kundanmals, Hidaramani’s etc. During the 1960s from the grants received from countries like China, the Government was involved in setting up textile industries all over the country, which included three composite (spinning, weaving, finishing together) mills namely Thulhiriya, Veytex and Pugoda. There were many spinning, weaving knitting and finishing plants and four composite mills in our country at that time and it was a vibrant industry until the year 1997.
When the local textile industry was set up there was no established export apparel industry and this sector started developing only after 1977 with the introduction of open economy. Therefore the existing textile industry catered mainly to the local market. All the machineries were also suite to produce to the local market needs of 36” and 45” width material and weaving plants were mostly equipped with power looms (shuttle looms). The local textile industry catered to the total requirement of the local market. When the apparel industry started coming up in the country after 1977, local textile industry could not supply to the needs of the apparel sector as their requirements were different which were 59/60” width fabrics produced in modern shuttle-less looms. Hence apparel sector was compelled to import their fabric requirements from other countries. When the local textile industry at its peak and the output was at the highest level, the Government at that time took a policy decision to remove the import duty for textiles in 1997 expecting free flow of fabrics to the apparel sector and end result was the collapse of the local textile industry as there was no protection for the industry.
Importers started dumping all the low quality fabrics into the local market at very low prices. These were not even suitable to domestic market let alone the apparel sector. Many mills including the large composite mills compelled to wind up operations as they could not compete with low quality imported products as always they produced good quality material suitable to the local market. As an assistance to revive the industry, the Government offered the industry to produce uniform material requirement for the schools and for the defence forces.
Few industries benefitted with this assistance and most of the other survived industries continued to struggle until a Cess was introduced for imports in 2009. With the introduction of a Cess for imported textiles, the industry commenced the upward journey once again. Many industrialists mainly SMEs invested heavily since then on modern machinery. But still the local industry caters to the local market as the investment requirement is huge in setting up large scale modern textile plants which could be catered to the apparel industry.
Therefore the decision taken by the Government is timely to develop textile clusters in order to cater to the apparel industry.