Prospects for the textile and clothing industry in Sri Lanka, October 2010

The textile and clothing industry in Sri Lanka accounts for almost half of the country's exports and nearly a tenth of its gross domestic product (GDP). In addition, it provides direct employment for 300,000 people. However, the clothing sector, which accounts for bulk of the industry, is overdependent on imports for its supplies of textile materials. Also, most producers lack design, marketing and product development skills. As a result, their business is at risk from firms in larger clothing producing countries -- notably China and India -- which are able to source their own inputs quickly and cost effectively.

On the positive side, Sri Lanka has a number of advantages -- including low wage levels, a young and well educated population and a high literacy rate. Also, it has a skilled workforce which is capable of producing quality products. Exporters benefit from good seaport facilities in Colombo, and a new port being built in Hambantota will be conveniently placed for shipping routes from South- East Asia to Europe. Also, the country's internal transport infrastructure will improve when three major road building projects are completed. The industry benefits from strong government support in the form of investment incentives and a number of established and fully serviced industrial zones, estates and parks. There is also the privately-owned "eco-sustainable" MAS Fabric Park spread over 165 acres.

Export growth has been spurred by preferential trade agreements with the USA and the EU, and important relationships have been established with well known brands such as Gap, JC Penney, Macy's, Marks and Spencer (M&S), Next, Tesco, Tommy Hilfiger and Walmart. Until recently, Sri Lankan garments were permitted to enter the EU duty-free under the EU's GSP+ scheme. But in August 2010 GSP+ status was withdrawn because of allegations that Sri Lanka had failed to meet certain conditions concerning human and labour rights. To counter negative perceptions and highlight the country's relatively good labour conditions, a branding campaign has been launched under the slogan "garments without guilt". Also an Asian Development Bank (ADB) study has shown Sri Lanka to be in compliance with internationally agreed labour standards. Perhaps the most positive development, however, is the prospect of relative social and political stability now that the ethnic conflict with the Tamil Tigers has been brought to a close.

To read the full report buy issue 147 now	Subscribe

• World Markets for Textile Machinery: Part 3 -- Knitted Fabric Manufacture, (October 2010)
• Trade and trade policy: the EU clothing import market and its ten largest suppliers, 3rd quarter 2010, (3rd Quarter 2010)
• World textile and apparel trade and production trends: South Asia and South-East Asia, June 2010, (June 2010)
• Prospects for the Textile and Garment Industry in Pakistan, (November 2009)
• Prospects for the Textile and Garment Industry in Bangladesh, (May-June 2008)

Six times a year, Textile Outlook International provides up to 200 pages of intelligence, expert analysis and insight on the global textile and clothing industry.

What's in it? Each issue provides an authoritative source of information on key industry topics, including: circularity; cotton; environmental sustainability; fibre prices; innovation; production and consumption forecasts; imports and exports; industry giants and emerging brands; international trade fairs; key geographical markets; recommerce; retail; supply chains; textile and clothing trade; textile machinery; trade and production trends; world markets; and yarn and fabric manufacturing. A single issue of Textile Outlook International includes: an editorial think-piece on a topical issue from an industry expert a report on textile and apparel trade and production trends a round-up of the latest international trade fairs a feature on textile and clothing imports and exports or fibre prices, production and consumption a report on a key geographical market insight and analysis of a key market leader or fast-growing start-up An annual subscription to Textile Outlook International is a cost-effective way to keep informed about trends and developments in the global textile and clothing industry. Subscriptions are available in printed and/or digital formats. Printed and digital subscribers receive each issue in printed format in addition to a digital PDF file, which is available immediately on publication. Like all Textiles Intelligence publications, Textile Outlook International is a reliable source of independently sourced business information, and it does not carry advertising. This is what our customers say: "The quality of your reports is very high" (The British Textile Technology Group (BTTG))