How a small island nation can aspire to be a "regional hub" can be best adjudged when we consider the case of Sri Lanka. An international clothing and textile conference has reviewed how the growing retail market in the Asia - Pacific region may enable emerging economies such as Sri Lanka to realise ambitious dreams to become regional production hubs.
"The top six retailers that are growing are not in North America, [but] in the Asia Pacific. This region is where the growth is," Kurt Cavano, founder, vice chairman and chief strategy officer of cloud computing company GT Nexus, told the South Asian Apparel Leadership Forum in Colombo. "The opportunities for Sri Lanka to be part of this massive growth and to contribute to this growth are huge," added Cavano, who was also the event's co-chair.
Speaking to an audience comprising top Sri Lankan industrial leaders and clothing industry experts from across south Asia, Europe and the US, he noted that a key area of growth would be in Chinese e-commerce. "China commands more online deliveries than all electronic commerce sites in the US combined. So the race is on," he added. Cavano stressed that fashion and apparel companies in Sri Lanka wanting to seize this opportunity needed to improve their supply chains, offering new design services and other innovations. "You can be part of a huge revolution. This is the time to seize the moment," he told the conference.
The Sri Lankan government certainly wants to ride this wave, passing industry-friendly legislation and negotiating a series of upcoming free trade agreements with big Asian markets, such as China and Japan. For instance, it recently enforced a new regulation designating Sri Lanka's main two ports - Colombo and Hambantota - as free ports, with reduced customs dues and trade bureaucracy.
"The new regulation will ensure export growth stability, increase foreign direct investments, along with the setting up of new enterprises across the country, amidst the island's strategic location in the Indian ocean," Tuli Cooray, Secretary General of the joint Apparel Association Forum OAAF) told the meeting. He said there was plenty of growth in demand for apparel made in south Asia, with output from Sri Lanka, Bangladesh, India and Pakistan growing 58% over the past four years - momentum Cooray believes will continue in coming years.
As for trade deals, planned agreements with China and Japan would, said Mahesh Amalean, chairman of MAS Holdings, the largest apparel manufacturer in Sri Lanka, have a positive impact over the next five years. "The future FTAs with China and Japan will be very important to our industry and its future growth," he said.
In his view, Sri Lanka's success has been prompted by reliability, which has been especially important given the growth of Bangladesh as a rival centre and Sri Lanka's exit from the European Union's (EU) Generalized System of Preferences Plus (GSP+) system of tariff preferences. "The greatest strength in our industry is when we take on a commitment, when we take upon an order we do everything we can do deliver it, increasing the trust partners place on us, therefore, our customers continue to stay with us unlike with some other countries," he said.