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Exporters to face serious challenges in 2009 - JAAF
08
Nov '08
The Sri Lanka Apparel Institute organized the 'Apparel South Asia Conference (ASA) – 2008' at the Bandaranaike Memorial International Conference Hall (BMICH), Colombo, on 5 and 6 November 2008. This event was designed for manufacturers and exporters of apparel in South Asia, with special reference to Bangladesh, India, Pakistan and Sri Lanka.

Speaking at the event, Mr Ajit Dias, Chairman of Joint Apparel Association Forum (JAAF), stated, “I think we're heading for somewhat of a crisis next year and the industry is gearing itself for it. We're definitely going to face serious issues next year. It will probably be one of the worst years we have had in a long time."

Mr Dias said the US $3.2 billion apparel export industry is the largest contributor to Sri Lanka's economy, accounting for 10 percent of gross domestic products and employing 270,000 people. However, exports to the US, the biggest market till recently, fell 11 percent in the first six months of this year. On the other hand, shipments to the EU rose almost 12.6 percent.

The Chairman stressed, “For the first time we're exporting more to the EU than the US. This is significant because we're losing our market share."

The GSP+ deal comes up for renewal by the end of this year. Under the scheme, the government will give about 100 million dollars to exporters. Mr Dias assured, “According to the GSP + regulations, even if it is not renewed, it will not severely affect exports for the first six months of 2009. The scheme will continue until May 2009, and very probably for six months after that.”

However, he stated, that due to rising costs and falling orders, the loss of the duty free access to Europe would mean reduction in the number of exporters. "There is top line pressure on retailers in overseas markets. Several of our buyers are downsizing and now, after the financial crisis, the situation has got worse. We're definitely going to face serious issues next year."

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