Apparel industry up against Government’s iron wall

Thursday, 11 November 2010 00:50 -     - {{hitsCtrl.values.hits}}

  • Top exporters call for more Govt. support and told to honour commitments
  • Give tax simplification to offset 20% rise in costs

By Sunimalee Dias

Apparel industry leaders on Wednesday called for more Government support saying that they are up against an iron wall since most of their contentious issues still remain.

The newly-appointed Chairman of the Sri Lanka Apparel Exporters Association (SLEA) Rohan Abeykoon made these observations and sent a strong message to the Government to extend its support and commitment going forward.

These observations were made at the Annual General Meeting of the SLEA held on Tuesday at the Cinnamon Grand.

Abeykoon pointed out the “sense of disconnection” experienced between the industry and the Government had led to the industry losing its voice with regard to exercising some influence on how their trade could be chartered.

He insisted that the Government must understand that the industry was made up of patriots and not an “elite sector of society” that would uproot and run with their factories to other countries to set up business where it was more lucrative and conducive.

It was noted that the industry had no hidden agendas and they called upon the Government to assist them when its services are required. “Please hear us and help us. Support us and work with us,” Abeykoon said.

While there are many “cool” industries emerging in the wake of the post war scenario, it was observed that the apparel industry still continues to command, at a base level, the opportunity for large scale employment even with a reasonable investment.

Noting the time taken by the Government to weigh in when requests are made, they called upon the Government to “honour its commitments” as in the case of delivering on the promise of the export development reward scheme.

In addition, he said there was a need to focus inward and not outward alone, by looking at each other as partners and not feel threatened as competitors.

Immediate Past Chairman Kumar Mirchandani highlighted the increase in costs incurred by the industry this year alone, which tops 20%.

However, he observed that with the industry’s “can do” attitude, the apparel industry would have enhanced relevance. In this respect, the olicy makers were called to continue with their dialogue with the industry.

In addition, he asserted that a “dignified exit strategy” for businesses that do not compete in the market was required to be set in place, in a bid to ensure these establishments will not go on to close down later, causing uncertainty to employees as well.

“A support system for viable Small and Medium Enterprises (SMEs) is required today, with the definition of the term requiring a change. A new tax regime that is simple and easy on businesses is needed, without a plethora of taxes being in place.”

Chief Guest Industry and Commerce Minister Rishard Badiudeen addressing the industry leaders commented on the Government’s commitment and noted the sector’s contribution to the economy with appreciation.

The largest net foreign exchange earner to the country, the combined apparel export earnings of Sri Lanka accounts for 70% of total exports.

Currently the industry is bringing in US$ 3.2 billion in earning and is 45% of the total export revenue earned. The Government noted this had been targeted to achieve US$ 5 billion by 2015.

Netherlands Ambassador Leonie Culinare noted that while being an EU member state it recognised the challenges, but noted that irrespective of the external and internal factors, the industry must bring forth a vibrant and growing segment of society.

The industry’s labour force amounts to 270,000 direct workers, she said.