GSP+ too big to miss!

By Uditha Jayasinghe

Despite apparel exports recording a 7% year on year increase to US$ 3.5 billion, industry pundits are uncertain about fortunes in 2011 and point out that growth figures would have doubled if GSP+ was still available.

Sri Lanka Apparel Exporters’ Association President Rohan Abayakoon told the Daily FT that the growth rate for this year would have to be between 10%-15% if the industry is to meet its target of US$ 5 billion exports by 2015.

Even though the first quarter is looking to continue the growth of 2010 with a 10% growth in the pipeline when compared to 2010 Abayakoon pointed out that this was due to external factors more than any steps taken by the industry.

“At the moment there is nothing special that the industry is doing to record this growth.

The events taking place around the world are mostly responsible,” he opined adding that the unrest in north Africa, labour price increases in China and capacity issues in Bangladesh were providing impetus to Sri Lanka.

He said that 2010’s apparel exports growth of 7% to $ 3.5 billion as “good” but pointed out that the GSP+ facility would have helped generate growth numbers closer to 20% and that what the industry could have achieved should be kept in context when comparing statistics. “Growth would definitely have been better if GSP+ concessions were intact,” he added. The GSP+ scheme allowed duty free access to Europe whilst from mid-August Lankan products were slapped with between 8 and 10% duty.

Exports in December 2010 grew by 35.6% to $ 465.7 million. Earnings from garment exports to EU and USA increased by 33.9% and 31.4%, respectively, in December 2010.

Though up by 7% over 2009, the 2010 export figure of $ 3.5 billion is only marginally high from the 2008’s figure of $ 3.46 billion. In 2009, exports dipped by 5.6% to $ 3.27 billion over 2008.

Abayakoon went on to say that the stellar reputation that Sri Lanka apparel has earned over the years has also stood it in good stead with buyers returning because of the trust they have in local companies. “Sri Lanka is seen as a reliable destination and so customers always return to us.” Maintaining the current growth Abayakoon stressed will depend more on these external elements creating a market rather than anything that the industry can do internally. “The misfortune of the rest of the world is our good fortune,” he quipped but commented that growth projection depended on world events. 

India’s garment manufacturers begin two-day nationwide strike

New Delhi, (PTI) Garment manufacturers today began their two-day strike, closing down their factories across India demanding rollback of 10 per cent excise duty imposed on branded apparel in Budget 2011-12.

The strike call has been given by Clothing Manufacturers’ Association of India (CMAI), an industry body that claims to represent over 20,000 companies in India, including readymade garment manufacturers, exporters and retailers.

It has also been supported by other bodies such as the Intimate Apparel Association of India (IAAI) and Federation of Hosiery Manufacturers Association of India (FHMAI).

According to IAAI President Rakesh Grover, production units in Kolkata, Mumbai, Ludhiana, Tirupur and Ahmedabad remained closed. IAAI claims a membership of about 500 manufacturers and retailers of intimate apparels.

The strike will continue tomorrow also and garment makers will hold a rally from Ram Lila Maidan to Jantar Mantar here in the Capital, he added.

FHMAI, which claims to be an association of around 3,000 hosiery manufacturers, said its members are also undertaking a two-day hunger strike as part of the protest.

“At Metro Channel in Kolkata protesters have gone on a hunger strike from today and it will last till tomorrow evening,” FHMAI Vice-President Sanjay Jain said.

The garment manufacturers have been demanding roll back of the 10 per cent excise imposed on branded apparels by Finance Minister Pranab Mukherjee in Budget 2011-12.

The manufacturers had earlier gone on strike on 4 March.

CMAI had earlier said that the two-day strike will result in a loss of Rs. 600 crore.