Apparel factories move to labour-surplus villages
Sri Lanka’s apparel industry, in a major shift from the late 1970s Free Trade Zone (FTZ) model of growth, is seeking state approval to move out factories in the zones to labour-surplus villages.
The plan is slightly similar to the 1990s model by former President Ranasinghe Premadasa who set up the 200-factories programme aimed at rejuvenating the village economy.
“We are encouraging apparel factories to move out of the zones and shift into areas out of Colombo in a bid to increase their dependence on the workforce found in the regions,” Joint Apparel Association Forum (JAAF) Deputy Chairman Channa Palansuriya said in an interview with the Business Times on Thursday.
He noted that in this respect, they would look at the possibilities of encouraging most of the SME-based organizations to shift to areas like Moneragala and Badulla rather than concentrate in and around Colombo (in zones).
This comes in the wake of the industry facing up to issues pertaining to labour shortages and that this would only be quelled by moving into areas that have an abundance of workers who would be able to travel to work from home without migrating to other provinces where zones are located.
Currently, discussions on this issue are at the (JAAF) committee level, Mr. Palansuriya explained, adding that it would take at least three years for it to materialize due to the cost of re-location.
He pointed out that due to the high costs prevalent in Colombo this was a viable option since workers would have the option of reducing costs incurred for food, lodging and transport facilities.
MAS Intimates and Slimline Managing Director/CEO Dian Gomes speaking with the Business Times said their organization did not have any factories in Colombo and had already ventured into provinces where labour was abundant.
“It’s a matter of priority and scale,” he said adding that it was a win-win situation for both the workers and the factories.
Commenting on the zones that provide incentives that was part of an earlier plan to concentrate factories in one location, he explained that today they would prefer to go to the villages and that the government would provide incentives for those willing to shift to difficult areas.
In the late1970s (after the UNP came into power), apparel factories were relocated or new ones started in the zones like Katunayake and Biyagama as part of the initial thinking. But with improvements carried out on infrastructure development and better transportation the country moved to a different parameter.
The industry was not happy with the next line of thinking when the Premadasa administration (in the 1990s) sought to provide incentives on a quota basis to set up factories in villages. Today the model has shifted to one where location of factories depends on the supply and demand of labour in the country, Mr. Gomes explained.
At present, MAS Holdings has established at least 95 per cent of its 37 plants in distant areas of the country like Koggala, Kilinochchi, Pallekele and Mahiyangana with only about three factories located in the zones.
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