SLASA focuses on regaining status | Sunday Observer

SLASA focuses on regaining status

27 August, 2023
The panel moderated by SLASA Secretary General Gopal K Iyer (far right) with panellists (from left) SLASA Secretary Gayan Galapitage, Ex-Co Member Padmal Silva, Member Sandun Silva, Chairman Wilhelm Elias and Vice Chairman Azmeena Kareem
The panel moderated by SLASA Secretary General Gopal K Iyer (far right) with panellists (from left) SLASA Secretary Gayan Galapitage, Ex-Co Member Padmal Silva, Member Sandun Silva, Chairman Wilhelm Elias and Vice Chairman Azmeena Kareem

The Sri Lanka Apparel Sourcing Association (SLASA) held a sundown meeting to move beyond immediate challenges facing the apparel industry and obtaining the buy-in of the industry to make it more competitive, given the lessons learned this year.

While the Sri Lankan apparel industry’s export figures were phenomenally good in 2022 despite the fallout from the pandemic and the economic crisis –USD 5.5 billion, the highest increase of 10 percent since the crisis, the industry’s performance hit a low from the beginning of 2023.

SLASA Secretary Gayan Galapitage said, “Global inflation, softening retail markets, the Russia-Ukraine war and uncertainty in financial markets all helmed the challenges that led to Sri Lanka’s apparel exports reducing 16.5 percent in the first five months of 2023 with the primary markets of US, EU and UK all facing unprecedented challenges. US orders regressed by 22 percent, the UK by 15 percent and the EU by 14 percent.”

SLASA Chairman Wilhelm Elias, Vice Chairman Azmina Kareem, Ex-Co Member Padmal Silva and Committee Member Sandun Silva were the panellists at the discussion. SLASA’S Secretary General Gopal K Iyer moderated the session.

Elias said that Sri Lanka imports about 70 percent of the fabric requirement which translates to high fabric prices.

Outlining the reasons for the downturn in fortune for Sri Lanka’s apparel industry, Elias cited five primary reasons: “Customers being overstocked post-Covid as a result of buying in advance due to extended lead times, inflation in the UK and the EU reaching unprecedented levels, the Sterling Pound losing ground to the US dollar which resulted in 11.5 percent decline in buyer budgets, Sri Lanka’s destabilisation in May 2022 seeing customers shift to Bangladesh and India and these countries pushing costs down significantly to keep factories operational, which Sri Lanka found difficult to compete with,” he said.

Kareem said that customers having less disposable income is a fact that won’t change anytime soon. “Countries such as Bangladesh and India were hungry and with buyers chasing margins and cost becoming a major factor, they read the signs and reacted to these faster than Sri Lanka did,” she said. Sandun Silva added that “Sri Lanka overstocked in the US and was not proactive enough to understand the market changes at the time. Sri Lanka has become complacent with what the country enjoyed before and was not open to change.”

Padmal Silva said that India’s domestic market in 2022 was USD 100 billion and that by 2028 it would increase to USD 175 billion. He said, “Being the fastest growing economy in the world and one which we supply to, India has been pragmatic, studying global markets and leading the trend. US brands are in India now because they see potential. As and when premiumising happens and the massive middle-class population increases, disposable income will in turn, go up. What Sri Lanka hasn’t explored is how we leverage on those synergies and collaborations India has already forged.”

Elias said that Sri Lanka’s fabric offer although having played a vital role for 30, is very basic given that there are still only four jersey mills in the country. “We have to push boundaries, invest in research and development and strive for excellence Sri Lanka was known as a reliable and safe pair of hands that always brought new and innovative products to the table.

But we have been beaten at our own game. It’s not that we have regressed, it’s just that our competitors have progressed in our strongest points of years ago. We are just not aggressive enough.” Kareem said, “We are not being strategic as an industry; there is no newness. As an industry, we have to come together because otherwise, it’s a missed opportunity.”

Elias said that unless the industry united, focused on issues and fast-tracked a pathway for the immediate future, the future looked bleak. “We can’t go cheaper but we can be more competitive. We must focus on pricing from wash plants to trim and fabric supplies. We must strive for excellence again. We had it, but lost it and so, we must inculcate it into our culture once more. The FTAs are important as are roadshows. We have to be louder as an industry, reestablish our USP, re-set and create greater awareness of how great we were and demonstrate via a clear strategy on the changes we are making as an industry that once set the standard for this region,” Elias said.