Sri Lanka’s garment industry is optimistic about the market outlook
Although there are concerns that the slow economic recovery in Europe will lead to a decrease in Sri Lanka’s textile export orders, with the recent increase in foreign investment and the growth of orders from emerging markets, Sri Lanka’s garment industry is optimistic about this year’s export market situation.
At the recent Sri Lanka International Trade Fair hosted by the Sri Lanka Export Development Board, many local high-end garment manufacturers participated. Taking advantage of the opportunity of the Sri Lankan government and the United States to negotiate the Trade and Investment Framework Agreement (TIFA) between the two countries, participating garment exporters displayed their products to many professional buyers from the United States. Sri Lankan President Mahinda Rajapaks said that at present, most foreign investors have voted for Sri Lanka’s economy.
Ready-made garments are Sri Lanka’s largest export industry. Ready-made garments and textiles accounted for 40% of the country’s total industrial product exports and 52% of the country’s total exports in 2011 respectively. Since most companies are fully loaded with orders in the coming months, the Sri Lankan industry is expecting 2012 to be a bumper year. Brandix, Sri Lanka’s largest exporter of ready-made garments, said that despite the slow economic recovery in Europe, the overall export order situation is still good. Raghuraman, director of the company’s market observation department, pointed out that Sri Lanka’s garment industry received better orders in the first quarter of this year, mainly because of rising production costs in China and full orders from Vietnam’s garment industry, which resulted in excess orders flowing to Sri Lanka.
In 2011, Sri Lanka’s total export value of garments and textiles reached US$4.2 billion, an increase of 24%. In January this year, garment and textile exports increased by approximately 1.6% year-on-year. Brandix pointed out that the growth of Sri Lanka’s garment exports can also be attributed to the country’s garment factories adhering to production standards. Although higher production standards will not bring higher profits to the Sri Lankan garment industry, it will differentiate Sri Lankan garment factories from their counterparts in other countries. Nowadays, as consumers’ awareness of the safety of garment production increases, buyers are also following health and environmental standards when placing orders. These buyers will not offer higher prices but will continue to place orders.
In addition, the 25-year civil war that ended in May 2009 also benefited the development of Sri Lanka’s garment industry. With the lifting of the travel warning, new international brands have placed orders for Sri Lanka’s garment factories. Industry insiders pointed out that the cancellation of the travel warning allows anyone to travel freely in Sri Lanka, which is conducive to the purchase of long-term customers, and the order volume of customers has also increased. Brandix’s orders are currently scheduled until July, and this situation is expected to continue until the end of the year.
Sarasavi Exports is a Sri Lankan manufacturer of cotton and linen tights and hosiery. The export markets are the United States, the United Kingdom, Germany and the Nordic region. MD SHemantha Kumara, the company’s general manager, said that the company’s financial situation in 2012 was better than that in 2011, and it is currently preparing Invest in new equipment to reduce costs and increase output. Nowadays, more and more customers are demanding products with added value, such as functional socks that are both antibacterial and fragrant.
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