Felix A Fernando, Director, Omega Line Ltd was appointed as the new Chairman of the Sri Lanka Apparel Exporters Association (SLAEA) at its Annual General Meeting, held at Jaic Hilton Residency, Colombo.
Rehan Lakhani and Azeez Rumi were appointed as the new Vice Chairman and Treasurer.
Fernando, the new Chairman of SLAEA pledged his best support to the industry, together with the executive committee and the council. He expressed gratitude to his predecessor, Saifuddin Jafferjee for an outstanding job done in the last two years.
New Chairman's speech revolved around the importance of apparel industry to the economy of the country and the state of the global apparel industry today. He said, the export of textile and apparel accounted for 46% of the total exports, and it accounts for 6% of the GDP of the country.
“Income from the Apparel Industry is the second largest source of foreign exchange. Apparel industry also accounts for nearly one million direct and indirect employments out of a total labour force of 8.3 million. In other words, 12.5% of the country's total labour force is employed in the apparel industry, and it is equivalent to 46% of the total employment in the industrial sector”, said Fernando.
He added, “Although it was disheartening to digest the current economic realities and the state of world economy and our own economy, we value the current government's desire to achieve a sustainable development through export led growth with globally connected value chains. The Prime Minister, in his recent Economic Statement acknowledged the importance and hoped for the revival of the industry with the restoration of the GSP+.”
“Our position is that the restoration of GSP+ will give some room to breathe and consolidate the industry. The GSP+ benefit we will enjoy for the next 3 or 4 years, can be used to accomplish many other medium and long term goals, which will not only be beneficial to the apparel, but to boost all the exports from our country.
We have already made a commitment to the government authorities to increase our exports to the EU by US$ 500 million annually once the GSP+ is restored.
If the proposed FTA with China can be successfully concluded, we will have a great opportunity to expand our market in China. The same cannot be said however about the proposed FTA with India. It is necessary to remove the quota in its totality in respect of the apparel sector, if our industry to see a significant benefit from the proposed ETCA.
We must enter into more FTAs with few other countries including Japan, Russia, Korea, Brazil, and South Africa. Sri Lanka must also seriously consider negotiating a trade agreement with the EU, since the GSP+ can be enjoyed for a maximum of 4-5 years at most.
We thank the Hon Minister of Finance for the 75% rebate proposed for the additional profits from exports, as a result of government's drive to encourage and increase the country's exports. Regrettably, the government has abolished the SVAT scheme, which was a hassle free system for the exporters. While acknowledging the government's aspiration to collect the taxes due on time, we urge the Finance Ministry to take due care in ensuring that refunds will be made on time. We are of the view, until the RAMIS system is fully tested and implemented, SVAT scheme need to be continued.
We need to re-visit the system of holidays. We do not propose to reduce the number of holidays, but to rationalise them to avoid holidays in the middle of a week. We all need to find and diversify into new markets for exports.
Considering the reputation Sri Lanka has for its quality, and our inability to compete on the low end value products which are made in neighboring South Asian countries, we must increase the production of higher value added products, such as formal wear and high-end outerwear.
Few major players are investing in automation, but largely the use of automation in the industry is lacking. This will become even a critical factor in time to come, when one considers the lack of labor supply in the country.
Labor turnover is on the increase compared to a decade ago. Female workers who quit the industry are more than the new entrants to the industry. We humbly request from the media to help elevate social status of the female factory worker in the society.
Our country has reasonably good training facilities including University of Moratuwa, Sri Lanka Institute of Apparel & Apparel (SLITA) and few other private sector institutions. Our industry must fully utilize the training resources available for us”, said Felix A. Fernando.
The out-going Chairman, Saifuddin Jafferjee said they are very disturbed by the proposal to abolish the SVAT scheme which is currently functioning smoothly. Prior to SVAT scheme VAT refunds were the no one pain point for every exporter and we see no merit to make any changes to a scheme that is functioning well”.
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