Financial Times

Apparel industry seeks investment in fabric mills
Foreign investors are considering setting up fabric mills in the island as part of the apparel industry's drive to form backward integration links to better face the quota-free era after 2005, the Joint Apparel Association Forum, the industry's apex body, revealed last week.

The government is planning to offer attractive incentives to entice investors to relocate their mills to the island, it said. Industry representatives have been holding talks with industry associations in the US, EU and Hong Kong to explore the potential for developing fabric mills here.

Ashraff Omar, head of the JAAF, said its aim was to transform the sector from a contract manufacturer to a provider of fully integrated service, covering design, manufacturing and selling.

It also wants to increase market penetration to premium market segments of the global apparel industry by supplying more value added high fashion garments, he told a news conference. "We want to become internationally recognised as a superior manufacturer of specific product categories focusing on sportswear, casual wear, children's wear and intimates," he said.

Under the five-year strategy drawn up by the industry to face the phasing out of textile quotas, which had hitherto protected the industry, knitted manufacturing and synthetic dying projects are to be set up in the island.

Pugoda is to be turned into a textile site while the cost of utilities, particularly energy, is to be reduced to entice more investors into the apparel industry. Omar said the industry aims to double turnover in five years at an estimated 12 percent annual growth to over $4.5 billion from $2.3 billion today.

As part of measures to improve logistics, the industry has got the approval of the Customs and the Sri Lanka Ports Authority to remain open on Sundays to clear goods.
It is also trying to hasten the implementation of the Electronic Data Interchange System that will reduce paperwork and speed up trade documentation. Low cost funds are being sought to help the smaller players in the industry to modernise their factories while labour reforms are being pursued to improve productivity. The JAAF has also launched a campaign to improve the industry's image, particularly that of sewing girls who account for the major part of its labour force, Omar said.

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