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Joint Apparel Associations Forum draws 5-point plan to sustain industry’s long-term growth

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The Joint Apparel Associations Forum (JAAF) has formulated a 5-point framework to coordinate the industry’s response to challenges stemming from COVID-19 and to drive stakeholder collaboration towards ensuring sustained long-term growth of Sri Lanka’s entire apparel sector.

The five points are:

ensure a safe working environment for employees

enhance backward integration

high-level collaboration with the authorities on retaining and improving export market access

position Sri Lanka’s apparel industry globally for the future, and

develop the competitiveness of the Small and Medium Enterprise (SME) players in the sector.

“At this crucial juncture, the entire industry must collaborate if we are to effectively address challenges stemming from the pandemic and create conducive conditions for long-term growth of the sector,” JAAF Secretary General, Tuli Cooray said. “This Five-Point Plan is a framework which all industry stakeholders can use to collaborate in achieving our shared vision for Sri Lanka.”

Action on the plan’s first priority – worker safety – has already been initiated, with an accelerated vaccination programme. As of August, 90 per cent of the workforce has received first doses, and up to 50 per cent of workers have received their second doses.

Swift progress is being made to complete vaccinating the entire workforce by the end of September 2021. Further, JAAF will continue to engage with local health authorities to ensure the industry keeps its high vaccination rate up. Next, families of staff need to be vaccinated to ensure the continued safety and well-being of the communities that employees are part of. Inoculation of unvaccinated adult family members is expected to commence soon. Sri Lanka is currently projected to vaccinate everyone over 30 by the end of September as well.

As per the guidance provided by the Board of Investment (BOI) and the Ministries of Health and Labour, besides vaccination, JAAF members have put in place the required infrastructure and safety protocols to be followed strictly to restore production while minimising the risks of future outbreaks. JAAF members are also working with employee representatives to improve awareness and thereby the safety of employees and their communities.

In enhancing backward integration, the Eravur Fabric Processing Park will be a key development. It will aid in increasing the sector’s local value addition from the current 52 to 65 per cent, a significant increase. However, the success of such initiatives would depend on the country’s ability to attract investments. JAAF expects to collaborate with the authorities to develop a conducive policy framework to attract investments to Sri Lanka for fabric production.

In addition, JAAF and its members will pursue other avenues to promote such investments – for example, by attending relevant international investor forums and leveraging existing partnerships to foster investment in Sri Lanka. Effective backward integration also requires raising the standard of locally-produced fabric (particularly by smaller participants in the industry) to globally accepted levels, for such inputs to be used for exports. This will also be an area of focus for JAAF.

JAAF will partner with the government to ensure the continuation of GSP+ by the EU; this is particularly necessary when the industry faces significant challenges in the post-pandemic world. High-level collaboration by JAAF with trade authorities will focus on both retaining and enhancing export market access for apparel exporters.

JAAF will also work to ensure continued benefits for its members from the United Kingdom’s GSP scheme, for which it will engage with Sri Lanka’s Department of Commerce (DoC) and the UK Trade and Investment (UKTI) authority. JAAF will continue to seek permission for members to use fabric originating in the Association of Southeast Asian Nations (ASEAN) countries for both EU and UK GSP+, which will improve supply chain flexibility.

JAAF will also engage with the Sri Lankan government on improving market access for apparel exports through bilateral trade agreements – including with the UK and via the proposed Free Trade Agreement (FTA) with China. Similarly, the possibility of greater penetration into the Indian market will be explored.

Further, JAAF will work towards positioning Sri Lanka as the hub for global apparel manufacturing operations. JAAF will work with local authorities to create a conducive business environment where Sri Lanka can be the headquarters for global apparel manufacturing. This would facilitate the inflow of highly skilled front-end design and development job opportunities to Sri Lanka from around the world.

In positioning Sri Lanka’s apparel sector globally for the future, especially as a premium apparel exporter, the industry will look to go beyond the success of its ‘Garments without Guilt’ initiative. Emphasis will be placed on excellence in sustainable and ethical manufacturing, aspiring to become the standard by which other countries are measured. Certain industry initiatives have already been launched (circularity in fashion, sustainability, and carbon neutrality). In fact, even today, Sri Lanka plays host to the world’s first net-zero carbon apparel manufacturing facility, the world’s highest-rated LEED platinum building, South Asia’s only Passive House, and the world’s first apparel group to have all its facilities certified as a net-zero carbon emitter.

JAAF will also work towards supporting sustainable growth in Sri Lanka’s apparel sector by adopting a series of coordinated measures to strengthen the SMEs in the industry. These initiatives will include providing assistance to improve the compliance capabilities of these players, advocating for greater government support on their behalf on aspects such as financing and export market access and engaging with the Department of Labour to improve its awareness of issues faced by the SMEs.

“This framework is also designed to measure progress and report back on all these fronts,” Cooray said. “It’s about walking the talk, and seen to be doing so.”



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SLT-MOBITEL donates fourth PCR machine to Matara District Hospital

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Group Chairman of SLT-MOBITEL Rohan Fernando handing over the donation to Deputy Director of Matara District Hospital Upali Ratnayake accompanied by Dr.Thushara Vidanapathirana, Dr.Deepika Priyanthi and Group CEO of SLT-MOBITEL Lalith Seneviratne.

Recognising the importance to enhance Sri Lanka’s PCR testing capacity to curtail the spread of COVID-19 and to protect citizens, SLT-MOBITEL continues its support by donating yet another vital PCR machine to the District General Hospital in Matara recently.

The donation of the PCR machine valued at over Rs. 5.7 million is part of SLT-MOBITEL’s ‘Sabandiyawe Sathakaraya’ CSR initiative in further strengthening the nation’s healthcare systems and assisting communities in need.

The equipment was handed over to the Deputy Director of the Matara Hospital Doctor Upali Rathnayaka in the presence of Rohan Fernando, Group Chairman, SLT-MOBITEL; Lalith Seneviratne, Group Chief Executive Officer, SLT-MOBITEL; Kiththi Perera, CEO, SLT; Shashika Senarath, CMO, Mobitel along with Regional GM, SLT; Regional Head – Mobitel and Hospital Staff.

Previously, PCR machines were donated to the Base Hospital, Karawanella, District General Hospital, Matale and the University Hospital of the Kotelawala Defense University. SLT-MOBITEL appreciates the support received from all Sri Lankans towards ‘Daana Paaramitha’ which was conceptualized as a platform to further increase community involvement in carrying out relief efforts to support families affected by the pandemic.

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Extension of lockdown negatively impacts CSE

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By Hiran H. Senewiratne

CSE trading activities commenced yesterday in a lacklustre manner with little share-buying interest and later on became negative following the government’s announcement on the lockdown extension until October 1, stock market analysts said.

The Colombo International Financial Centre (CIFC) at the Port City was set to commence this month and has been delayed until December owing to the current Covid 19 situation. This also affected CSE trading activities yesterday, analysts said.

Consequently, the stock market lost steam yesterday, closing on a negative note as investor sentiment remained erratic due to internal and external environmental factors. Both indices moved downwards or to negative territory despite healthy turnover in the market. The All Share Price Index went down by 46.09 points and S and P SL20 declined by 17.93 points. Turnover stood at Rs. 3.8 billion with two crossings. Those crossings were reported in Expolanka, where 600,000 shares crossed for Rs. 101.1 million, its shares trading at Rs. 158.50 and Sampath Bank one million shares crossed for Rs. 49.5 million, its shares traded at Rs. 49.50.

In the retail market, some companies that mainly contributed to the turnover were; Expolanka Holdings Rs. 1.2 billion (7.4 million shares traded), JKH Rs. 604 million (4.6 million shares traded), Browns Investments Rs. 540 million (58.3 million shares traded) and Hayleys Rs. 204 million (2 million shares traded).

It is said that following two sessions of gains, the indices closed in the red due to price declines in large-cap stocks as investors opted to book modest returns after the recent sharp rally. Stocks such as Expo, LOLC, and JKH, which saw sharp gains in the past two sessions witnessed profit-taking at higher levels and weighed on the momentum throughout the session.

Further, high net worth and institutional investor participation was noted in Sampath Bank. Mixed interest was observed in Expolanka Holdings, Tokyo Cement Company and LOLC Holdings, while retail interest was noted in Browns Investments, Lanka Orix Finance and Industrial Asphalts. During the day 153 million share volumes changed hands in 24000 transactions.

As of yesterday, the current exchange rate of 1 US dollar was equal to 199.607 Sri Lankan rupees. This is an increase of 7.856656 percent (or +14.5401 LKR) compared with the same time last year (17 September 2020), when 1 US dollar equaled 185.067 Sri Lankan rupees.

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Lockdown takes toll on Sri Lanka’s manufacturing sector activities

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The resurgence of the COVID-19 pandemic in August 2021 has slowed down the manufacturing activities in the country. Accordingly, the manufacturing PMI recorded an index value of 45.1 in August 2021 with a fall of 12.7 index points from the previous month, mainly driven by the decrease in New Orders, Production, Employment, and Stock of Purchases sub-indices. The decline in New Orders and Production, especially in the manufacture of food & beverages, furniture, and textiles & wearing apparel sectors, have mainly contributed to the overall decrease of the manufacturing PMI. Many respondents in those sectors highlighted that their local orders and distribution channels were affected due to the lockdown imposed as a measure of containing the pandemic. Further, many of them also emphasised that factory operations were disrupted due to the spread of the COVID-19 virus among employees. Employment sub-index also declined in line with these developments.

The decrease of Stock of Purchases was in line with the decline in New Orders and Production. Further, the difficulties encountered in placing purchase orders and in settling foreign payments also adversely affected the supply chain of raw materials and production schedules. Many respondents stressed that the continuous increase in the cost of imported raw materials adversely affected their profit margins. Meanwhile, Suppliers’ Delivery Time lengthened at a slower rate in August 2021. The manufacturers cautioned that the uncertainty over the COVID-19 pandemic would continuously hinder the prospects of the manufacturing sector, yet, overall expectations for manufacturing activities for the next three months remained above the neutral threshold.

Services PMI dropped to an index value of 46.2 in August 2021 with the restrictions imposed to contain the further spread of the COVID-19. New Businesses, Business Activity, Employment and Expectations for Activity sub-indices recorded declines. New Businesses decreased in August compared to the previous month mainly with the declines observed in wholesale and retail trade, insurance, real estate, and education sub-sectors. Business Activities across most of the sub-sectors such as, wholesale and retail trade, real estate, insurance and other personal activities reported considerable declines indicating the adverse effects of travel restrictions on their business operations. Nevertheless, transportation sub-sector recorded some improvements solely due to the growth in freight volumes. Moreover, financial services sub-sector also indicated improvements despite the disturbances from travel restrictions. Employment continued to fall at a higher pace as retirements and voluntary resignations exceeded the number of recruitments carried out during the month. Backlogs of Work increased at a higher pace in August along with the reduction in staff availability amid travel restrictions and growing COVID-19 infections of staff. (CBSL)

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