|
|
Sri Lanka apparel makers increase backward integration
Saturday, 9 June 2007 - 4:56 AM SL Time
|
|
|
Sri Lanka`s garments industry has increased sourcing of fabric from the region and making accessories at home under its backward integration plan to strengthen its base, an industry official said.
More fabric mills are also being set up in the island and existing ones expanded to support the apparel exporters and shorten lead times, A. Sukumaran, chief executive of Star Garments Group said.
The industry is trying to increase its backward integration as well as manufacture of non-textile accessories and trims to ensure it can sustain itself in the quota free era, he told the Sri Lanka Economic Summit organised by the Ceylon Chamber of Commerce.
`Exports in the first quarter of this year are up 14 percent compared with same quarter the year before, which is a very good sign,` Sukumaran said.
Last year Sri Lanka`s exports to the United States fell, though the EU market was healthy.
Garments are a key source of foreign exchange and employment generation for the island.
The industry grew rapidly because of the market access guaranteed under the Multi Fibre Arrangement, producing clothes from imported material.
But the end of the MFA and quota system changed the way the industry works, making it difficult for pure cutting and making operations.
In response to the end of quotas, the industry began implementing a five-year strategic plan to develop the industry base and increase backward integration, Sukumaran said.
Apparel exports increased by 21 percent since 2003, when the industry plan was launched.
Market share in the US has remained at 2.35 percent but in the European Union has grown to 1.24 percent from 1.16 percent in this period.
`One of the main reasons exports to the EU has grown is the GSP (Generalised System of Preferences) Plus scheme,` Sukumaran said.
This gives preferential access to Sri Lankan garments into the EU market.
Sukumaran also said the number of fabric mills in the island has increased to support the industry, allowing for shorter lead times.
There are now six mills ? two woven and four knit ? compared with two woven and two knit mills in 2003 ? and their capacities have also increased, he said.
One woven mill had doubled capacity to 200,000 yards a week and another had increased capacity from 115 metric tonnes a week to 175 metric tonnes in 2006.
One knit mill plans to double capacity to 200 MT a week next year and 300 MT by 2009, another to increase output from 250 MT a week to 350 MT and a third to raise capacity from 140 MT a week to 190 MT this year and 350 MT by 2009.
`This means fabric mills which came here have realised it was a viable business,` Sukumaran said. `They have expanded and have future plans to expand further.`
The industry wants to get more fabric mills and also increase sourcing of fabric from the region, mainly Pakistan, India and Bangladesh.
The value of fabric imported from the region has grown markedly ? to 143 million dollars from 87 million in 2003 ? with imports from Pakistan almost doubling.
But this was still only 12 percent of the total of 1.2 billion dollars in fabric imports.
`We`re trying to increase this as it will help us streamline our supply chain,` Sukumaran said.
The industry was also increasing its production of non-textile items. These include hangers, bra moulding, fabric printing, lingerie elastic, zippers, labels, thread, buttons, and packing materials.
In the pipeline are lamination and moulding, high quality foam, transfer prints, garment dyeing, fabric printing, and bra components, Sukumaran said.
Local production of ancillary items had made more progress than textiles.
In 2003 the industry imported 194 million dollars worth of accessories and trims but this fell to 181 million dollars in 2006 despite exports going up because of local production and value addition.
|
|
|
|
Search All News and Discussions