Footwear industry seeks higher profile

The footwear industry which is highly labour intensive clearly has a significant potential for being a key contributor to the economy of Sri Lanka.

Value addition in the footwear sector is between 40 to 50%. The Sri Lanka Export Development Board (SLEDB) in collaboration with the Ministry of Industrial Development and the Sri Lanka Footwear Association is organizing a 'Footwear & Leather Goods & Travel Goods Exhibition' from November 24-26, 2007 to be held in Sri Lanka. The exhibition will consist of approximately 200 trade stalls and around 50 stalls exhibiting raw materials, machinery, components and other services. The SLEDB is planning to invite buyer delegations from Italy, France and other countries to visit the fair.

At present, the industry employs about 20,000 people, directly and indirectly. This includes seven large export companies, 30 medium scale companies and around 3000 small scale manufacturers. A diverse range of modern shoes like canvas and rubber boots, thongs, sports shoes and leather shoes are produced using a variety of raw materials.

The Sri Lankan government has recognized the footwear industry as having a vast export potential which could make large scale contributions to the local economy. Thereby, the government has offered duty free concessions to raw materials, machinery and equipment used for processing and manufacturing leather goods and leather products. Furthermore, the government increased the present cess on imported shoes to safeguard the local industry from the influx of imports.

The European Union (EU) has offered duty free concessions to the footwear and leather products imported from Sri Lanka under their GSP+ scheme. Sri Lanka is the only country in the Asian region which has been offered such a concession. Furthermore, the anti dumping duties imposed on China (19.4%) and Vietnam (16.8%) by the EU would make local products competitive in the international market.

Sri Lankan footwear exporters have already established themselves as supplies of fashion footwear to well known international brands such as Marks & Spencer, Bata France, HH Browns, Clarks, Aerosoles and Nike. Sri Lankan exports of footwear during January to June 2007 were US$9 million, indicating a 42.74% growth compared to the corresponding period in 2006. In 2006, the major export markets for footwear was the United Kingdom at 32%, Italy at 25%, Spain at 12%, the United States at 7% and Japan at 6%.

The SLEDB said the Sri Lankan footwear industry has not yet achieved its due recognition compared to other industries such as garments.Sri Lanka started its garment industry without having any raw material but due to the dedication of industrialists and the support of the government, the industry has grown tremendously. The footwear industry is similar to the garment industry in operational aspects. Both industries use the same accessories and skills. The SLEDB contends that since apparel and footwear go together as clothing accessories, the footwear industry could also absorb the displaced labour of the garment industry.

In order to boost the recognition of the footwear industry, the exhibition scheduled for later this year is intended to identify the most creative and skilled small and medium scale manufacturers to be developed as potential exporters.

The exhibition also seeks to unveil hidden talents and capabilities of the small and medium enterprises (SME's) and build a link between the SME's and the large scale manufacturers. It further aims to create awareness on the opportunities for Sri Lankan manufacturers to export to the EU under the GSP+ scheme.