Financial Times

Garments brace for rising competition
By Quintus Perera
Sri Lankan garments manufacturers could go off the garments radar if they don't steer themselves to maintaining high quality standards and keep to delivery schedules when the end of the textiles quota regime in the US raised competition levels.

This note of concern came from Hemaranjana Fernando who recently took over as President of the Katunayake Free Trade Zone Investors Association (KFTZIA).

Fernando, also the Director/General Manager, Bratex (Pvt) Ltd, a BOI company exporting women's underwear, told The Sunday Times FT in an interview that Vietnam, Cambodia and China were all Sri Lanka's main competitors in the international garments market

"It is a worrying situation since we would be open to heavy competition. Everything then would depend on the ability to compete in the open market without any protection. We will have to fight (battle for stakes) in the market."

He said that though big companies like his group could handle the transition in 2004/2005, small companies who supply garments on contract would find it very hard and most probably, get knocked out, resulting in job losses for many.

Fernando was elected President, KFTZIA in March and for the first time a delegation from the 22-year old association met three workers from each factory in the zone to resolve some of the problems workers face. These association-worker meetings will continue on a regular basis.

There are some 60,000 workers at more than 90 factories at the Katunayake Free Trade Zone, the first investment zone set up in 1978. Fernando said the KFTZIA has more than 70 members and they are involved in manufacturing various types of items such as foundation garments, normal garments, gems cutting, bolts and nuts, electrical and electronic items and a host of other items.

One of the objectives of the zone is to look after the interests of investors, mainly foreigners, and also provide some help to workers, most of who come from rural Sri Lanka and are not familiar with the ways of management and the authorities.

"Today things are changing rapidly. The original proposals or plans are not what is in existence today. Most of these foreign investors came to Sri Lanka on the promise that there won't be any trade unions. But now trade unions are allowed to be formed, breaking that original promise (by the government)," he added.

He said investors were earlier told that they would be allowed 100 percent duty free (imports) but now on certain imports, a duty is levied. In addition to problems of investors, there are many problems and hardships encountered by the mostly-female workforce.

Fear of losing employment or sacked without a proper cause, poor accommodation, insecurity, transport difficulties, lack of proper bathing facilities, difficulty in getting a proper nutritious meal and lack of recreation and proper entertainment are some of the problems faced by workers.

Fernando said the KFTZIA after extensive discussions is now in the process of implementing some programmes for the benefit of these women. He said some basic shortcoming in Free Trade Zones has been lack of or unhygienic residential facilities for many of these girls who come from distant places of the country.

The present situation is such that local politicians and councils have allowed matters to deteriorate without taking action against house owners who run ramshackle, wooden boxes and shanty type boarding houses.

In countries like China, Fernando said that adequate residential facilities have been provided inside the industrial complexes. The Association also expanded the free medical clinic for workers, increasing the number of doctors to four from two. Workers wanted more female medical officers and this request was acceded to.

KFTZIA also arranges various merchandising companies to come to the zone during the salary time every month. These merchants sell their utility products to workers at reduced prices. Harassment and sexual abuses of these girls is a common problem and rampant in the Zone.

Police, Fernando said, have chosen to ignore some complaints of harassment and abuse. On the other hand innocent village girls who become workers are found to be easy prey for dozens of perverts hovering around the area.

The KFTZIA wants to spend around a million rupees to buy a suitable building to start a counseling centre inclusive of medical advisers and counselors for the workers Fernando rejected the theory that zone workers had no prospects of rising up the ladder. Factory workers have chances of rising in their careers and there are enough workers who have risen in the ranks over the years due to experience and quality work. He said some even enjoy managerial positions.

End of quotas no threat to textile exports - US envoy
The US envoy in Sri Lanka has said the phasing out of textile quotas next year is unlikely to affect apparel exports to America because the island's garments were of a higher quality than that of its competitors.

Ambassador Jeffrey Lunstead said the ending of quotas might affect certain garment producing countries in Asia. But garments produced in Sri Lanka would enjoy the same, if not an enhanced market due to their high quality, a statement from the Ministry of Labour Relation and Foreign Employment quoted him as saying.

Lunstead remarks were made during talks with Labour Relations and Foreign Employment Minister Athauda Seneviratne recently. Seneviratne had inquired whether the ending of US textile quotas would endanger the market for Sri Lanka garments it presently enjoyed.

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