Sri Lanka’s Joint Apparel Association Forum (JAAF), the apex body that guides Sri Lanka apparel towards its ultimate goal of being the world’s number one apparel sourcing destination, held its 19th Annual General Meeting recently, re-appointing industry veteran Sharad Amalean as Chairman. It also unanimously re-elected its Executive Committee including Saifudeen Jafferjee and Felix Fernando as Deputy Chairmen.

Delivering the Chairman’s address, Amalean highlighted that JAAF identifies the importance of bringing in a new generation of young leaders with motivated youthful energy to drive the apparel industry beyond 2025. He stressed that while the past year has not been easy, the credibility JAAF has sustained over the years has undeniably aided the industry to work closely with the Government, relevant authorities and regulatory bodies. This has been a key driver in the ease of doing business in an unprecedented socio-economic fabric, a competitive edge in a challenging business climate.

While Sri Lanka ended 2022 with exports worth USD 5.5 billion which is nearly a 10% increase from previous years, a closer look at the data reveals a worrying trend - Secretary General JAAF Yohan Lawrence

“2022 was a defining moment for Sri Lanka. The textile and apparel sector should be proud that we prevailed and achieved a turnover of LKR 5.5 billion at the end of last year. I thank our stakeholders, team members and associates working in manufacturing plants all over the country for this achievement,” said Amalean. He concluded his address with the reminder to adopt a positive outlook for 2023 as the IMF assistance is on the horizon.

Past Chairman of the Sri Lanka Apparel Exporters Association (SLAEA) Aroon Hirdaramani stressed that 2023 will be a challenging year with inventory pile-ups and an increase in costs and input prices. “Luxury brands will go on to do better than others, with the US being in a superior position globally,” he noted in his address.

Highlighting vital policy priorities crucial for the industry to optimise potential in 2023 and beyond, Secretary General of JAAF Yohan Lawrence pointed out that 2022 has been a year of mixed fortunes for apparel exports, starting off with a promise but seeing declining growth in the last months of 2022. “The global recession, overstocking of retail goods in warehouses and the impact of the Ukraine-Russia war on global supply chains took its toll. While Sri Lanka ended 2022 with exports worth USD 5.5 billion which is nearly a 10% increase from previous years, a closer look at the data reveals a worrying trend,” he said.

He quantified Bangladesh’s USD 45 billion export industry growing by a massive 28% as against Sri Lanka’s YoY of 10%.  “This growth in Bangladesh indicates that competitor nations are gaining market share from Sri Lanka.  We comprise only 1 to 2% of global trade and this will reduce if the government fails to take immediate action.” He noted that with Bangladesh classified as a Least Developed Country, it has unrestricted access to the EU and the UK, while Sri Lanka’s GSP+ and DCTS programme dictate rules of origin, allowing only 50% of exports qualifying for duty free access to those countries.

Lawrence clarified that JAAF had made continuous representations to authorities for relaxation on the rules of origin for both the EUs GSP+ and the UK’s DCTS schemes on the reasoning that Sri Lanka should be considered an LDC given the unprecedented economic crisis. He further explained that India’s duty-free access for Sri Lanka’s apparel allows only 8 million pieces and that too unfairly counting a pair of socks or gloves as two pieces under the quota. While thanking the Department of Commerce for its efforts to ship out the full quota to India, Lawrence highlighted that JAAF intends to work towards having the quota used at the highest FOB values in 2023.

The AGM was also joined by JAAF’s constituent associations. Chairman of the Fabric and Apparel Accessory Manufacturers Association (FAAMA) Pubudu de Silva thanked JAAF for its efforts in sustaining operations during trying times, stressing that the challenges ahead are not unique to Sri Lanka. “With collaboration, the industry can undoubtedly emerge victorious,” he said.

Vice Chairman of the Sri Lanka Apparel Sourcing Association (SLASA) Azmina Kareem commended the industry for its resilience in the face of adversity, highlighting that global retail and consumer priorities are rapidly changing due to declining disposable income. “Buyers are under massive pressure to face changing customer needs while maintaining margins and sourcing agents will have to step up.”

Assistant Treasurer of the Sri Lanka Chamber of Garment Exporters (SLCGE) Menuka Gunawardana expressed appreciation to JAAF for sustaining the industry given the hardships faced by SMEs through the pandemic and economic crisis.

Chairman of the Free Trade Zone Manufacturers Association (FTZMA) Jatinder Biala appreciated JAAF’s role in providing leadership for the industry and urged authorities to reassess the social security levy and the increase in corporate taxation and electricity tariffs which will impact the industry’s competitive edge significantly.

Sri Lanka Apparel Exporters Association