| China - Sri Lanka partnership
in garments
By Dilshani Samaraweera
CHINA, Shanghai -- Sri Lankan garment exporters
are linking up with garment giant China to form an Asian coalition.
The Sri Lankan apparel industry is joining its
Asian counterparts to form an Asian coalition for the garment industry
- centred on China. The alliance is expected to enable greater regional
cooperation in the garment trade and is expected to directly benefit
Sri Lankan garment producers.
“Asia is the fastest growing apparel supplier
to the rest of the world but competition between our countries is
also increasing. So we (garment representatives from a number of
Asian countries), held a meeting in March this year and agreed to
form an Asian Association of Garment Manufacturers and for Sri Lanka
the Apparel Exporters Association signed the declaration. Countries
like Bangladesh, India, Vietnam, Burma, both South and North Korea
and Taiwan participated and others are expected to join,”
A Sukumaran, Chairman, of the Sri Lanka Apparel Exporters Association
(SLAEA), said during a visit by a Sri Lankan garments’ delegation
to China.
In addition to the regional agreement on cooperation,
the Apparel Exporters Association also entered into an agreement
with one of China’s largest ventures in the garment business.
“We also signed an MOU with the Shanghai
garment machinery zone. This is a one-stop-shop area for all the
machinery requirements for the garment industry,” said Sukumaran.
The link-up with Chinese machinery manufacturers
is expected to directly aid Sri Lanka’s apparel industry by
providing access to lower cost Chinese machinery. At the moment
the garment factories are mostly purchasing Japanese machinery.
“Chinese machines are half the price of machinery made in
Japan and spare parts costs will also be much lower. So if the quality
requirements can be met by Chinese machinery suppliers, our industry
can benefit,” he said.
Through the MOU Sri Lankan apparel manufacturers will have direct
presence inside the industrial zone with access to the latest machinery
produced within the zone.
“We will have an office inside the zone
and our companies will be able to use it to source machinery and
to know about developments,” Sukumaran said.
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Shanghai on the map
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| Opening ceremony of Shanghai
Fair |
Last week Chinese officials and businesses
inaugurated the Shanghai International Garment Machinery and
Accessory exhibition - SIGMA 2006 and opened the Shanghai
International Fashion Centre and Machinery Zone. This is part
of the Chinese government’s development plans for Shanghai
- to position the city as a supplier of machinery, fabric
and fashion to the global apparel industry. To promote the
zone and its capabilities internationally industry participation
and media coverage from 14 other apparel manufacturing countries
in Asia and outside, were invited for the inauguration. A
Sri Lankan delegation of 38, made up of garment company representatives
and media, participated through the SLAEA.
China is already the single largest producer
of apparel and textile in the world with output shooting ahead
after quotas ended on December 31, 2004. The ending of quotas
saw China’s share of the global apparel market balloon,
absorbing market share from many other countries, and within
months of quota removal Chinese production was once again
reigned in, through country specific controls. At the moment
both the US and the EU have re-imposed quota controls on specific
categories of Chinese textile and clothing.
However, these controls are limited and
China is revving up her massive production engines to take
on world markets from all sides. The Shanghai International
Fashion Centre and Machinery Zone is targeting the back end
of the garment business. Currently Asian countries make up
the largest regional apparel producing bloc and China is already
a large supplier of fabric and accessories for the region.
Now China is also gearing to capture the machinery market.
Its latest industrial zone to manufacture machinery for the
garment industry is targeting machinery needs of thousands
of garment factories in Asian countries.
The Shanghai International Garment Machinery
City, located in the town of Fengjing, is a 1.5 billion Yuan
(about US$ 192 million) investment covering an area of 570,000
square metres. The Chinese government is providing concessions
on land use and taxes for companies inside the zone and is
also providing support in areas like labour and infrastructure.
The zone is already linked up with large highways, power and
communications and factory buildings are ready for use. The
massive complex is designed to not just produce and sell garment
machinery but also to host large exhibitions and to do research
and development and trading in second-hand goods. The complex
is due to expand by another 120,000 square metres to incorporate
hotels, banks, shopping malls and other facilities.
Already Fengjing town has 40,000 textile
and garment manufacturers and the town’s existing garment
machinery manufacturing factories report an annual output
of 100 million Yuan (around US$ 12 million).
Once the machinery zone is underway the Chinese authorities
are looking at expanding further to add-on a 50,000 square
metre International Fabrics and Accessories Trading Centre.
In this case too, Sri Lankan garment manufacturers are expected
to benefit by strengthening links with the zone.
“When fabrics and trims come in the
second phase we will benefit because already 70% of these
goods are already coming from China. Our factories either
buy them directly or import through agents,” said Sukumaran
said.
The SLAEA says that in addition its membership
that is covered under the MOU with the Shanghai Machinery
City, other garment manufacturers too can make use of the
opportunity. The SLAEA membership accounts for around 70%
of total Sri Lankan garment exports.
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