Apparel Industry Sri Lanka - Strategical Solutions

APPAREL INDUSTRY SRI LANKA

Ravi KumudeshUniversity of Colombo

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Apparel Industry in Sri LankaHistory

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Before 80s

Independence

Tea, Coconut & Rubber

Becoming a Republic

Self sufficiency motive

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Late 70s and Early 80s

Open Economy

Rapid Changes

Insurgencies

Investments Slow Down

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Late 80s

Insurgency – again!

Industries in Trouble

Lack of Investments

Slow Growth

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Early 90s

Change of Leadership

Focus on Development

200 Factory Program

Sri Lanka becoming a Garment Country?

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Caught up in Y2K!

Truce & Short term Boom!

Tsunami!

Change of Leadership

End of Quota!

New Millennium

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Apparel Industry in Sri LankaProspects and Challengers

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Factors Moving Towards the Growth

Human Resources Skilled Labor Motivation Abundant labor force

InfrastructureGovernment policies

Custom procedures International agreements

Factors Moving Backwards the Growth

Increased Production Cost High Lead Time Emerging Market

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Export of Apparel 2007 - 2012

Rivals in Apparel Industry

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Foreign RivalsIndiaChinaBangladeshVietnam

Contribution to GDP

Gradual deduction of GDP

contribution Reflection of GDP

Less domestic value added as 65% of material inputs are imported.

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Potential Competitors

China Low production cost with quality and speed High backward and forward linkages Establishes as global supplier

Bangladesh / Vietnam / Turkey Low labor cost Low utility cost

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Apparel Industry in Sri LankaSolutions

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Opportunities

1. High industry attractiveness2. Effective Multi Fiber agreements3. Emerging economies of Eastern countries4. Strategic location and connectivity

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Threats

1. Cheap labor in competitive countries2. European Economic recession3. New entrants within supplier/distributors’

countries4. Rapid development in retail industry5. Removal of GSP

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Strengths

1. Reputation in industry

2. Compliance with international labor laws

3. Supportive government policies

4. Educated, adaptable workforce

5. Fast developing infrastructure

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1. Increasing labor cost2. Lack of geographical diversification3. Absence of prominent local brands4. Higher utility cost5. Social perception6. Labor turnover and absenteeism

Weaknesses

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