The document summarizes the history and current state of Sri Lanka's apparel industry. It discusses factors that have contributed to the industry's growth, including human resources and infrastructure development. However, the industry now faces challenges from cheaper labor costs in competitor countries like China, India, Bangladesh and Vietnam. While Sri Lanka has a reputation for quality, it also struggles with increasing costs and a lack of geographical diversification in its customer base. The industry will need to focus on developing local brands and diversifying exports to maintain growth.

1. Ravi Kumudesh
University of Colombo

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Apparel Industry in Sri Lanka
History

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Caught up in Y2K!
Truce & Short term Boom!
Tsunami!
Change of Leadership
End of Quota!

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Apparel Industry in Sri Lanka
Prospects and Challengers

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Factors Moving
Towards the Growth
 Human Resources
 Skilled Labor
 Motivation
 Abundant labor force
 Infrastructure
 Government policies
 Custom procedures
 International agreements

10.  Increased Production Cost
 High Lead Time
 Emerging Market
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Export of Apparel 2007 - 2012

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 Foreign Rivals
India
China
Bangladesh
Vietnam

13. Gradual
deduction of
GDP
contribution
Reflection of GDP
Less domestic
value added as
65% of material
inputs are
imported.
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

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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 Lanka
Solutions

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1. High industry attractiveness
2. Effective Multi Fiber agreements
3. Emerging economies of Eastern countries
4. Strategic location and connectivity

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Threats
1. Cheap labor in competitive countries
2. European Economic recession
3. New entrants within supplier/distributors’
countries
4. Rapid development in retail industry
5. Removal of GSP

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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 cost
2. Lack of geographical diversification
3. Absence of prominent local brands
4. Higher utility cost
5. Social perception
6. Labor turnover and absenteeism
Weaknesses

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