Sri Lanka’s branded apparel makers eye bigger domestic market

June 23, 2014 (LBO) Sri Lanka’s apparel makers are targeting a bigger share of an estimated two billion US dollar domestic market, officials said.

The association said that the plans are on pipeline to open up a whole sale mall for international and domestic buyers to buy any fabric requirements and branding cloths.

“This will cater as one stop shop for any buyer to cater their apparel requirement,” Dharmawardane said.

“This will help us to position our self as a hub for fabrics and help to spread about our quality garments to the world.”

Official said the mall will be located in Colombo and the plans are still being negotiated with the government.

“What we want is to have one location where we can display all the Sri Lankan brands,” Gehan De Soysa, executive committee member of the Sri Lanka Apparel Brands Association said.

He said the industry sees Middle East and Africa as potential markets for Sri Lankan garments.

In the first four months of 2014 apparel and textile exports rose 20.9 percent to 1,601 million US dollars from a year earlier, making up 44 percent of total exports.

“We need to popularize Sri Lankan brands among local people,” Indradatta Dharmawardane, President of Sri Lanka Apparel Brands Association said.

“There is a huge untapped market locally where we need to address and cater good quality garments for an affordable price.”

He was speaking at the launch of Sri Lanka Apparel Brands Association (SLABA), which was rebranding the Domestic Garment Manufacturers Association (DGMA) founded by the late A Y S Gnanam.

Dharmawardane said that the local manufactures cover only 40 percent of the domestic market.

“From now onwards our target would be to replace the balance 60 percent and drive a brand driven market for our own citizens,” Dharmawardane said.

Analysts say the industry should not try to take market share by calling on rulers to push up import duties on ready-made apparel to achieve autarky of ‘self-sufficiency’ by oppressing the less fortunate citizens through protectionism, like some other rent seeking industries are doing.

In the 1970s and 1980s Sri Lankans were oppressed and their freedoms stolen by a handful of state and private textiles firms and forced to buy kerosene-smelling cloth at high prices under protectionism to be self-sufficient.

Import protection for textiles was ended in the 1990s and now some Sri Lanka based textile firms export their product in addition to supplying locally based apparel firms.

In other sectors such as building materials, food and cosmetics, businessmen have turned to the coercive power of the state to earn rents, instead of using quality and price, critics have said.

The retail value of the domestic market is estimated to two billion dollars which comprises imports and domestic products, the association said.

The domestic industry has grown 10 percent from the last year.

“If you take the time of 10 years, there are lot of new domestic brands has come to the market like Kelly Felder, Avirate, Amante,” Dharmawardane said.

“These brands have emerged due to the demand of the market and that is a positive sign.”

Hameedias, Reborn, Avirate and Amante are among the few brands that have started expanding abroad.

“We intend to recognize and grow our local brand in to global,” Dharmawardane said.

“All these effects are to position Sri Lanka as an apparel hub to the world and at the same time we will enhance our capacity to cater into global market.”

The industry accounts for around half of the country’s exports.

“It’s a challenge to find human resources but expanding our roots in to regions will help us to get the numbers,” Dharmawardane said.

USA imports 80 percent of the total garment exports in Sri Lanka.

Sri Lanka is heading towards achieving the apparel export target of 10 billion US dollar by 2016.

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