Apparel industry wary of $ 6 b export target set by Govt.

Friday, 12 March 2021 03:05 -     - {{hitsCtrl.values.hits}}

  • JAAF says 2021 forecast too ambitious; reverting to pre-COVID performance must be priority
  • Textiles and garments exports dipped by 21% to $ 4.4 b in 2020 after growing 5% in 2019 to $ 5.5 b
  • Industry yet to hear from Govt. on inclusion in national Covishield vaccine program
  • Warns SL in danger of losing major buyers to competitors 
  • Calls on Govt. to finalise FTA with China

By Charumini de Silva

The apparel industry yesterday expressed reservations over achieving the $ 6 billion export target set by the Government for 2021 given the challenges, and insisted that focus should be to revert to pre-COVID performance.

“Apparel industry is given an export target of $ 6 billion for this year. However, we feel that the figure is a bit too ambitious given the challenges the industry is grappling with post-pandemic,” the Joint Apparel Association (JAAF) Secretary General Tuli Cooray told the Daily FT.

He also said that it was difficult to achieve such an ambitious target with very strict health protocols in place due to the pandemic.

“The COVID situation is not permitting the factories to work on full capacity. Our industry was built on reliable suppliers, but post-pandemic it has come under threat. So unless something different happens right now, we see more challenges in 2021,” he added.

Cooray said the industry has not set any targets, but they at least want to achieve the numbers pre-COVID to recover the apparel sector.

In 2020 apparel exports declined by 21% to $ 4.4 billion after posting a 5.1% growth in 2019 from 2018. Last year’s decline reflects the industry’s struggle given the COVID-19 impact globally and locally.  Prior to the pandemic the industry forecast was a 6% growth in 2020.

The Central Bank yesterday said textile and garments exports in January 2021 declined by 11% to $ 423 million from a year earlier. Other made up textile articles exports in January were up 20% to $ 13 million.

Apparel industry was one of the key export sectors which was severely hit by COVID-19 due to partial or full shutdown in major markets as well as domestically whilst the pandemic also impacted the employees.

Cooray said they are yet to hear from the Government regarding the national Covishield vaccine program, to give priority to vaccinating their labour force. “The best way forward is to prioritise the rollout of vaccines to all our workforce or if ignored the industry could face deeper challenges in 2021,” he warned.

JAAF warned that Sri Lanka was facing stiff competition from other countries who had been able to meet orders, despite having higher COVID-19 patient numbers.

“We have already started discussions on this with the Government. Apparel industry accepts orders four months in advance, and if we cannot deliver the orders promised; then the clients are going to lose faith in us. Sri Lanka’s apparel industry has always maintained a reputation for reliability, but due to COVID-19 we are in danger of losing that,” he warned.

He also said that the demand for global apparel has declined by 30% and thereby posing a greater challenge for the industry and economy at large. “If we all do not get our act together, the repercussions will be detrimental to all stakeholders and the economy,” Cooray pointed out.  

Textile and garment industry is the most significant and dynamic contributor to Sri Lanka’s economy accounting for nearly 45% of exports.

COVID-19 however also offered new opportunities for the apparel industry in 2020. According to the Export Development Board, earnings from export of Personal Protective Equipment (PPE) related products in 2020 rose by 47.42 % to $ 876.44 million. The strong performance was mainly due to the increased exports of other made-up articles (HS 630790) and articles of apparel and clothing accessories of plastics (HS 392620).

JAAF Secretary General said they were also strongly promoting the Government to finalise the impending free trade agreement (FTA) with China. “The impact of the pandemic seems to continue even during this year. Therefore, it is essential for us to have the China FTA in place, to be able to sustain any further challenges ahead,” Cooray added.