Local textile manufacturers have appreciated the Government’s decision to suspend the recovery of SME loans.
Not only textiles but SMEs in all sectors were thankful to President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa taking such initiatives as SMEs were the backbone of any country, the incumbent Chairman, Sri Lanka Textile Manufacturers’ Association Nimal Perera, told Daily News Finance yesterday.
Nimal Perera, also a former Chairman of both the Ceylon National Chamber of Industries (CNCI) and that of the Joint Business Forum, that his Association, whose members were mainly SMEs, highly appreciated the Government’s decision to suspend the recovery of SME loans and taking new initiative to revive SMEs.
“This decision came at no other better time than this as the industry was operating at its peak getting ready to cater to seasonal demand. Nature of this business is such that the demand for textile was mostly seasonal and hence the requirements of funds for working capital purposes were also high to produce fabric and store it till the festival season arrives. Therefore the suspension of recovery of SME loans would benefit the local textile industry immensely, he said.
In a highly developed country such as Japan, the SME representation exceeds 99%,” he noted.
“Demand for textiles in Sri Lanka is in two fold. Requirement for local market need and the apparel Industry need. Local textile Industry had been set up during 50s and 60s, mainly to cater to the local market,” he said.
“When the apparel industry for exports was established with the opening up of the country’s economy in 1977, there was no development plan for an export oriented textile industry to support the apparel industry. This compelled the apparel sector to import their fabric requirements and a good opportunity was lost to the country. Presently there are few export oriented knitted fabric production plants operating in the country.”
Once a very vibrant local textile industry, which catered to the total requirement of the country, it virtually collapsed with the sudden removal of import duty for textiles in 1997. Many industries including three large mills wound up operations while others continued with great difficulties. Total requirements of schools uniform material too were produced by local textile industrialists, “ he said.
With the introduction of CESS for imports of textiles few years later, the local textile industry started the upward journey once again. Since many have invested heavily in the industry, industrialists have many a times sought Government the assistance of the Government to modernize the textile manufacturing plants. Governments in textile producing countries such as India, Pakistan provide grants for modernization of textile production plants he explained
He said: “As per the last report of Department of Census and Statistics, textile was the 4th largest industrial sector of the country having 40,711 employees in 187 establishments.
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