Business

‘Free Trade Agreements essential to enhancing Sri Lankan apparel’s resilience’

Published

4 years ago

2022/10/22

Apparel sector in urgent discussions with government on FTAs to boost exports

With fears of a global economic recession looming, the Joint Apparel Association Forum (JAAF) is actively stepping up engagement with top Government and Foreign Ministry officials to expedite negotiations on Free Trade Agreements (FTAs) to help boost exports and strengthen the industry’s resilience.Elaborating on the progress thus far, Deputy Chairman of JAAF and Chief Executive Officer and Managing Director of Omega Line Felix Fernando outlined key priorities for the industry moving forward. Following are excerpts:

Q: What progress has been made in engaging with the Government to address challenges faced by the apparel sector?

A: There has been strong progress made and we are appreciative that the Government has given weight to our concerns. Most recently, we had separate meetings with the Secretary to the President, the Prime Minister and President. During these meetings, we voiced our concerns over the various challenges faced by the industry resulting from both local and global volatility.

In fact, even in August, we saw a 20% increase in turnover generated by the sector. If this trend continues, we anticipate apparel sector earnings to increase to approximately USD 5.6 billion by the end of 2022. However, it is difficult to anticipate industry performance moving into 2023, given the geo-political tensions and economic volatility created by the situation in Europe – which is home to many of Sri Lanka’s most valuable markets. Currently, the US, EU and the UK comprise about 86% of our total exports.In such a challenging environment, it is essential for Sri Lankan apparel entities to diversify their markets. Hence a central focus for our discussions with Government has been the urgent need to finalize FTAs with countries like China, India, Japan and Australia.

,JAAF was pleased to note that the Secretary to the Prime Minister has been appointed to head a task force to expedite the Chinese FTA, and we are already seeing promising signs of progress. We are also pleased to note that JAAF has already been called in for these discussions although they remain at a preliminary stage at present.

Q: What role will economic reforms play in the apparel sector’s ongoing revival?

A: Fundamental reform in economic policy is absolutely critical. Sri Lanka is a small country with 22 million people, which means we simply cannot generate the economies of scale necessary to directly produce everything we require within a closed economy – especially if we hope to continue having access to quality and reasonably priced goods. Therefore we have to focus on export development in order to fund imports of commodities and goods imperative to keep our economy moving. Fortunately, the Government and the industry are in complete agreement on this point.

We also have must remember that at present, Sri Lanka is not competing on a level playing field. Our main competitors, countries like Bangladesh, Vietnam, and some African nations have duty concessions in global markets, which we do not have. Sri Lanka’s only concessions are for the UK and the EU markets, and those come coupled with a variety of strict conditions pertaining to the origin of raw materials which means that utilisation of these preferences remain around 50% for apparel.

Securing new FTAs can help reduce barriers for Sri Lankan apparel exporters to diversify, hence the Chinese FTA is our first priority. We hope to gain clarity on a timeline for these negotiations from the Department of Commerce in the coming weeks, but further progress will also depend on our sovereign debt restructuring negotiations with China. Further trade concessions will help to better integrate Sri Lanka with regional markets. If for example we are able to penetrate the Indian market, even 10% would be equivalent to 100 million people, where we are presently limited to supplying just 8 million pieces. JAAF has reiterated its request to have this quota increased. There’s also opportunities to lobby for the including of apparel into the new round of Canada’s GPT+ scheme. To move forward on such opportunities, we definitely require the support of the Government and diplomatic corps.

Q: How have import restrictions impacted the apparel industry- especially in terms of the raw materials needed?

A: As the sector was permitted to use its foreign remittances for the purpose of payment for imported raw materials, for the most part, the industry was able to meet its requirements without an issue. The export figures for recent months bear testament to the industry’s ability to deliver during this difficult period.. However, the crisis also meant a significant tightening of financing and this has been particularly challenging for the SME sector as they operate on small margins, and mainly provide support services to the main exporters. This is a sector which provides livelihoods for approximately 40,000 people, hence it is critical that we support them.

In many instances, they lack the working capital and foreign currency needed to purchase machinery and spare parts in order to expand capacity to service larger orders. Despite all the struggles faced, SMEs are still surviving for now, but without formal programmes to support them, this may not last. Most SMEs depend on the larger exporters and manufacturers. Once their orders are cut down, SME orders also decline. With the higher cost of living in Sri Lanka, salaries have also been adjusted across the apparel industry, but with orders declining, employees may see a reduction in earnings, impacted by the decrease of production incentives and overtime. This will affect employees’ monthly earnings and we need to be conscious of the cascading potential social impacts this could have, as their buying power is also weakened.

Q: How would an economic downturn impact orders from the US and EU moving forward?

A: Both markets last year recorded strong sales. But they may have overestimated demand as most buyers’ inventories are still full. Thus, they don’t want to restock for at least another 4 to 6 months.Recently, the US increased its lending rates by 0.75%, and there is a possibility that certain commodity prices might decline. If that happens, this whole situation can change, but it’s still too early to predict. Logistics and energy costs increased exponentially not just in the US but also in the EU, primarily due to the Ukraine war. If these issues ease by December, orders may pick up. But this is a global issue and not unique to Sri Lanka. Although the first 8 months of the year had a growth in exports, we envisage a decline in our apparel exports by 25-30% for the remainder of 2022.

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Business

Saudi Arabia deepens investment in Sri Lanka with USD 50 mn medical faculty

Published

17 hours ago

2026/07/7

Sahan Weerasooriya

Dignitaries at the launching of the new medical faculty.

Saudi Arabia has reaffirmed its long-term commitment to Sri Lanka’s economic and social development with the inauguration of the USD 50 million Faculty of Medicine at Sabaragamuwa University, a flagship investment expected to strengthen higher education, healthcare capacity and human capital while reinforcing the growing bilateral partnership between the two countries.

The project, financed by the Saudi Fund for Development (SFD), was inaugurated on Saturday in the presence of Prime Minister and Minister of Higher Education Harini Amarasuriya, Saudi Ambassador to Sri Lanka Khalid Hamoud Al Kahtani, SFD Deputy Chief Executive Officer Eng. Faisal Al-Kahtani, senior government officials and representatives of both countries.

Addressing the ceremony, Prime Minister Dr. Harini Amarasuriya described the project as another milestone in the enduring partnership between Sri Lanka and Saudi Arabia, expressing appreciation for the Saudi Fund for Development’s continued support in expanding higher education and creating opportunities for future generations of Sri Lankan students.

The premier said the new Faculty of Medicine would help address the country’s growing demand for qualified medical professionals while strengthening the national healthcare system.

Ambassador Khalid Hamoud Al Kahtani said the inauguration reflected the “strong and enduring partnership” between the Kingdom of Saudi Arabia and Sri Lanka and underscored the two nations’ shared commitment to education, healthcare and sustainable development.

The Ambassador added:”This achievement stands as a testament to our shared commitment to advancing education, healthcare and sustainable development.”

The Ambassador paid tribute to the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al Saud, and Mohammed bin Salman for their vision and continued support for international development initiatives that foster economic cooperation and sustainable growth across partner countries.

He also commended the Saudi Fund for Development for financing and implementing the project, describing the Faculty as an investment in human capital, knowledge and Sri Lanka’s future healthcare workforce.

“We are confident that this new Faculty will play a vital role in educating future generations of medical professionals, serving the people of Sri Lanka and further strengthening the close friendship and cooperation between our two countries,” the Ambassador said.

SFD Deputy CEO Eng. Faisal Al-Kahtani said the project represented far more than a new academic institution.

“It is an investment in people, knowledge and opportunity. For more than four decades, the Saudi Fund for Development has partnered Sri Lanka in projects that improve lives and support sustainable economic and social development,” he said.

The state-of-the-art Faculty of Medicine features modern laboratories, para-clinical teaching facilities and a comprehensive library, significantly expanding Sri Lanka’s medical education infrastructure.

Since 1981, the Saudi Fund for Development has provided approximately USD 422.7 million through 15 development loans supporting 12 major projects in education, healthcare, water supply, transport and energy, making Saudi Arabia one of Sri Lanka’s key development partners in long-term infrastructure and human resource development.

By Ifham Nizam

Business

Arpico Insurance welcomes finance professional Naresh Tillekeratne to Board

Published

17 hours ago

2026/07/7

Sahan Weerasooriya

Arpico Insurance PLC, a renowned life insurance provider and a subsidiary of the blue-chip conglomerate Richard Pieris & Company PLC, has announced the appointment of Naresh Tillekeratne to its Board of Directors. This move further reinforces the Company’s commitment to operational excellence and stakeholder value as it embarks on its next phase of growth.

With a career spanning over 35 years in International Banking and Non-Bank Financial Institutions (NBFIs), Tillekeratne brings deep expertise in enterprise risk management, compliance, and corporate structuring. With over 15 years in C-level and senior management roles across Sri Lanka and the Middle East, he has forged a reputation for driving bottom-line efficiency and structural transformation.

Commenting on the appointment, Ramal Jasinghe, Chairman of Arpico Insurance PLC, stated “We are pleased to welcome Naresh Tillekeratne to our Board. He is a respected figure in the financial services landscape, recognised for his risk-management acumen and strategic foresight. As Arpico Insurance continues to scale and navigate complex and ever-evolving business and governance environments, his extensive cross-border experience will be invaluable in safeguarding stakeholder value and steering our sustainable growth trajectory.”

Prior to joining the board at Arpico Insurance PLC, Tillekeratne served as Chief Executive Officer of Assetline Finance PLC (previously Assetline Leasing Company Ltd), following a tenure as General Manager – Credit & Operations at AMW Capital Leasing and Finance PLC.

Jayalal Hewawasam, CEO of Arpico Insurance PLC, added “We are entering a dynamic phase of innovation and growth at Arpico Insurance, and strong corporate governance remains at the very heart of that journey. We are delighted to welcome Naresh Tillekeratne to our Board of Directors and the Company Management looks forward to working with him, and to harness his expertise in supporting our growth trajectory. We are confident that his proficiency in international banking, coupled with his acumen in enterprise risk management, will add tremendous depth to our leadership structure.”

Tillekeratne’s international exposure includes C-level responsibility at the Abu Dhabi Commercial Bank (UAE), where he engineered the restructuring of credit approval mechanisms and documentation controls to maximize portfolio returns. Prior to that, he completed a distinguished tenure spanning over two decades at Citibank NA Middle East, ascending to the level of Senior Vice President and Regional Head of Credit Risk Management for the Middle East, Egypt, and Pakistan. During his time with Citibank, he was also a key member of the specialized projects team tasked with advising and structuring financing for iconic state-backed development projects across Saudi Arabia, the UAE, Qatar, Egypt, and Bahrain.

Speaking on his new role, Tillekeratne noted “It is a privilege to join the Board of Arpico Insurance PLC, an institution anchored by the enduring 90-year legacy of the Richard Pieris Group. My primary focus will be to enhance our risk-governance architectures to ensure we meet our promises to policyholders while driving growth and innovation. I look forward to collaborating with the Board and the Senior Management to drive our strategic evolution with absolute integrity.”

Business

EFC new Chair reaffirms commitment to national employment policies and responsible business initiatives

Published

17 hours ago

2026/07/7

Sahan Weerasooriya

Sanath Manatunge (Chairman) and Dinal Peiris (Vice Chairman)

The Employers’ Federation of Ceylon (EFC) recently concluded its 97th Annual General Meeting at the BMICH. At this general meeting, the Board of Trustees and Council Members representing different employer groups were appointed for the financial year 2026/27.

The outgoing Chairman, Dinesh Weerakkody expressed his appreciation to the Council, Members and the EFC Secretariat for the invaluable support extended to him throughout his tenure. Sanath Manatunge, Managing Director/CEO of the Commercial Bank of Ceylon PLC was appointed as the new EFC Chairman while Dinal Peiris, Chairman and Managing Director of the Lanka Aluminium Industries PLC Group was appointed as the Vice Chairman.

In his inaugural address, the new Chairman, while underlining the significance of the Federation, stated that, as the National Employers’ Organisation, the EFC will continue to contribute to labour law reforms that support future-ready businesses while driving responsible business initiatives. Manatunge who counts 36 years of experience having held very senior positions in the financial sector, presently serves on the Boards of Commercial Development Company PLC, and Commercial Bank of Maldives (Pvt) Ltd. as the Deputy Chairman. He is also the Chairman of the Sri Lanka Banks’ Association. Following his appointment as the new EFC Chair, the senior professional further emphasised the importance of engaging with the tripartite stakeholders to collaboratively advance shared objectives and strengthen Sri Lanka’s employment landscape.

Manatunge also represents key industry interests as a Member of the UNICEF Business Council, the Ceylon Chamber of Commerce, and the World Bank Group’s Private Sector Advisory Council. His regulatory and advisory contributions include serving as an Ex-Officio Member of the Stakeholder Engagement Committee of the Central Bank of Sri Lanka, as well as a Member of the Project Steering Committee (PSC) for the Central Bank’s Fraud Risk Management (FRM) System.