SL eyeing Japanese investments for flourishing $ 13 m handlooms industry

Sri Lanka is eyeing Japanese investments for the high potential US$ 13 million handloom industry, the Ministry of Industry and Commerce said yesterday.

The industry’s potential and prospects for new investment opportunities were discussed between Minister Rishard Bathiudeen when new Japanese Ambassador N. Hobo paid a courtesy call on the former.

“Sri Lanka’s growing apparels and handloom sectors are open for Japanese investors. The the $ 13 million handlooms sector especially has strong investment potential. The industry labour used in Sri Lanka’s apparel sector is also qualified and skilled in comparison to some other manufacturing destinations providing low cost labour. Our human resource capacity has resulted in high quality apparel exports from Colombo on a continuous basis,” Bathiudeen said during the meeting.

“The demand for Sri Lanka handlooms has been steadily growing in both local and international segments. Sri Lanka’s booming tourism has become a key driver in the handloom surge. To strengthen the sector, we have set up a high priority national Handlooms Task Force in early January. Having set up the new national level task force, we are now preparing to upgrade the sector with product diversification, new training, design development, and marketing. We are planning to establish district level handloom centres under private sector management. Our promising handlooms can utilise valuable Japanese support in this new direction” he added. “We warmly welcome Japanese international investors who want to invest in our apparel sector. We are keen to increase our share of apparel exports to the Japanese market,” Minister Bathiudeen stressed.

“Our economy is now on a peaceful development path thanks to the leadership of President Mahinda Rajapaksa. The handlooms sector is a direct way to develop our rural economy. We are also developing the rural sector with projects such as Divi Neguma, which is a valuable initiative of Minister of Economic Development Basil Rajapaksa. My Ministry plans a main role in the forthcoming Divi Neguma exhibition to be held in Mannar on 21 January,”

Minister Bathiudeen revealed. According to the Department of Commerce of Sri Lanka, Foreign Direct Investment (FDI) by Japanese companies into Sri Lanka dates back to the 1970s; the first milestone was in 1972, with the establishment of a joint venture between Noritake of Japan and the Ceylon Ceramics Corporation. Since 1996, a number of large multinational conglomerates, including NTT, Mitsui Group, Kawasho Corporation and YKK, have committed substantial investments in large infrastructure and manufacturing projects. At present, there are about 60 enterprises with Japanese investment operating in Sri Lanka under the BOI Law at end of 2009, having invested about US$ 350 million, and providing more than 12,000 employment opportunities. Responding to Minister Bathiudeen, Japanese Ambassador Hobo said: “The Sri Lankan handloom sector certainly appears to be interesting. Fair trade practices are now very active in the Japanese market. Also, to advance in the Japanese market, Sri Lankan apparels and looms need to differentiate more. The main character of the Japanese apparel market is high end. Sri Lanka handlooms should encourage further product diversification and should also better connect to international markets.”

Hobo added: “This year Japan and Sri Lanka will commemorate the 60th anniversary of the establishment of our diplomatic relations. The 60th anniversary celebrations will further strengthen the friendly relations between our two countries.” According to the Export Development Board (EDB) under the Ministry of Industry and Commerce, the handloom exports valued at $ 0.90 m in 2009 rose in 2010 to $ 1.5 m and in January-October 2011 stood at $ 1.17 m. The EDB expects the handloom exports to hit $ 2.24 m in 2015. The handloom textile export target for 2011 set by the EDB under the Ministry of Industries is US$ 1.29 million (Rs. 146 million).