Joint Apparel Associations Forum draws 5-point plan to sustain industry’s long-term growth
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.”
Cabinet approves rationalization of VAT exemptions and abolition of SVAT System
The Cabinet of Ministers granted concurrence to the resolution forwarded by the Minister of Finance, Economic Stabilization and National Policies to remove most of the releases from Value Added Tax (VAT), further retaining releases that ease the pressure on low – income families to secure the fundamental sectors of the economy as well as the releases for sectors such as education, health and agriculture, as well as to revise the provisions applicable for the Value Added Tax (VAT) act so that the Simplified Value Added Tax (SVAT) methodology can be canceled with effect from 01.01.2024 by introducing a more formal methodology for repaying the Value Added Tax (VAT) and to instruct the Legal Draftsman to prepare a draft bill for the purpose.
Venora Lanka Power Panels to set up assembly plant in Australia
By Hiran H.Senewiratne
Sri Lanka- based, export- oriented manufacturer, Venora Lanka Power Panels (Pvt) Ltd, with a state of the art electric panel factory at the Export Processing Zone, Biyagama, will set up an assembly plant in Australia.
“Once we set up the electric panel assembly plant in Australia, we will export all our panels from Sri Lanka and that plant will do 30 percent value addition to the product to supply that market, the company’s chairman/ Managing Director, engineer Sagara Gunawardena told The Island Financial Review.
Gunawardena said that the company is a value- addition assembly plant and he would be investing AUS $ 2 million for the project to be set up in Melbourne and hire 100 engineers and other professionals. He explained that the venture has enormous potential.
Venora Lanka provides power panels to mega projects in Sri Lanka and exports to Bangladesh, Maldives, Kenya, Ethiopia, Seychelles and Myanmar. Panel assembling is strictly in compliance with IEC 61439 standards, it was explained.
Gunawardena added: ‘I firmly believe that, being a truly customer focused organization, every employee and every process in the organization has to be aligned behind delighting customers. Therefore, at a time when the country is facing a major dollar crisis, my company would be aiming at bringing dollars into the country, while providing employment for local professionals, especially engineers.
‘At Venora Lanka we do not try to change customers’ mindsets. Instead, we take time to understand what they really want and focus our brand on delivering that. Venora is values- driven first and cost- driven second – creating a unique brand proposition.
‘Since the US dollar rate has come down, it is our concern that importers and suppliers do not change their prices, which is really affecting the manufacturing sector.
Company sources added: ‘The company has several wings of operation, such as local and overseas projects, switch board assembling, telecommunication infrastructure installations, earthing, lighting and surge protection, incorporating world renowned brands.
‘Venora Lanka Power Panels is the first Sri Lankan company to receive the licence, in accordance with the UK Trade Mark Act 1994, to use the trade mark “Best Enterprise”. It won a global award at the event, ‘Golden Awards for Quality and Business Prestige’, held in Geneva, Switzerland, in 2015.
‘Within a short span of time, with the perfect blend of progressive thinking and expertise, Venora Group has expanded to consist of, Venora International Projects, Venora Telecom, Venora Industrial Solutions and Venora Lanka Power Panels (BOI approved). Further, Venora has established its overseas presence through Venora Engineering Kenya and Venora Engineering Myanmar.’
Share market moves into positive territory; indices up
By Hiran H. Senewiratne
CSE trading got off to a positive note yesterday but during the last session of the day the momentum slowed. However, the market is now moving towards positive territory following the Central Bank announcement of a downward trend in interest rates, market analysts said.
Amid those developments the market witnesses improvements in both indices and in the turnover.
The All- Share Price Index up by 12.8 points and S and P SL 20 rose by 6.97 points. Turnover stood at Rs 710 million with one crossing. The crossing was reported in JKH which crossed 430,000 shares to the tune of Rs 60.2 million; its shares traded at Rs 140.
In the retail market top seven companies that mainly contributed to the turnover were; JKH Rs 212 million (1.5 million shares traded), Access Engineering Rs 44.7 million ( three million shares traded), Lanka IOC Rs 34.5 million (264,000 shares traded), Browns Investments Rs 28.6 million (5.3 million shares traded), LOLC Finance Rs 23.8 million (4.7 million shares traded), Capital Alliance Rs 22.9 million (615,000 shares traded) and First Capital Holdings Rs 19.2 million (574,000 shares traded). During the day the 31.4 million shares volumes changed hands in 9000 transactions.
Yesterday, the Central Bank’s US dollar buying rate was Rs 285.16 and the selling rate Rs 298.85.
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