Financial Times

Needles found in baby clothes in a British store
Sabotage at Lankan garments unit
By Duruthu Edirimuni
Top British clothing store Marks & Spencer has withdrawn a consignment of baby garments shipped from a Colombo-based supplier after sewing needles were found in some, in what local industry officials described as sabotage.
The supplier was S. R. Gent, a UK-based manufacturing group that sources garments from independent factories in Sri Lanka, China, Indonesia or India. In this case the disputed clothes came from the British firm’s Colombo quality assurance unit.

Joint Apparel Association Forum (JAAF) officials said what happened was an act of sabotage. “It is widely believed that the children’s clothes have been taken out of the factory that produced them and that an act of sabotage was done at the quality assurance plant of S.R. Gent,” one official said. He said S. R. Gent has had an issue with some of the workers at their quality assurance plant and they had done this to be vindictive. “The company was trying to get rid of some workers and as a way of getting even with their employers they had inserted needles inside the clothes,” he said.

S.R. Gent declined to comment on the issue saying the matter is under investigation. “At the moment we cannot comment on this, because it is under investigation,” a senior official at the company’s Colombo office said.
Marks & Spencer said in a statement on Saturday that it withdrew 12,000 children’s clothes in the same product line, all produced by the same company after receiving two complaints about needles in late May and early June.
JAAF officials said the recall was a serious issue to an industry that is struggling to cope with the end of textile quotas and demands from overseas buyers for quality compliance on a range of issues.

After a disastrous production month in April, the industry recovered slightly in June with somewhat of a surge in orders for tee-shirts and pants on the back of restrictions by US and European authorities on supply from China, the world’s largest garments supplier.

Big groups like MAS Holdings placed advertisements seeking extra capacity from other factories to meet their needs. Industry sources said some buyers had also panicked and were booking orders worried that a supply crisis could emerge. These developments came during a week when the government announced credit guarantees for loans to SMEs to upgrade the infrastructure, technology and modernization of factories in order to enable the apparel sector to comply with international quality standards.

Fifty percent of the loan has been guaranteed by the government.
However small industrialists said interest rates were still too high. “I am upgrading my factory to meet compliance standards at a cost of Rs 1 million taken at 17 percent interest and this is an unbearable cost,” one southern industrialist. He said at least 150 factories have shut down in the past year from the MFA fallout.

“We are struggling to survive and many of us are in debt,” he said noting that the big players in the industry were better off because they had access to foreign loans at four percent interest. But JAAF Chairman Ashraff Omar said the SME loan scheme was a positive development and enables companies to have access to credit with little collateral needs.

The industry suffered immensely in April when the EU postponed its planned implementation of the GSP + due to a dispute between member states over issues relating to the new GSP scheme. Orders slumped that month.

Following a visit to Europe last month by a government cum private sector delegation to persuade EU authorities to expedite the GSP + scheme that would benefit Sri Lankan exporters, another delegation is also due to visit Britain to pursue these initiatives.

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