Fabric and accessory industry optimistic of $ 800 m target

• Says order books full for the season; factories operating at full swing adhering to health guidelines
• Opines in-country sourcing has helped SL to limit foreign exchange outflow, eye opener to have reasonable control over country’s supply chain
• Shortage of foreign reserves, suppliers refusing to accept LCs, ever-increasing freight charges and raw material prices and ships bypassing, listed as key constraints
• Commends Govt. for aggressive vaccination drive
• FAAMA working closely with Govt. to find sustainable solutions for waste management issues

By Charumini de Silva

The Fabric and Apparel Accessories Manufactures Association (FAAMA) last week expressed confidence in achieving the $ 800 million turnover target for the year, with the industry’s order books for the October-December quarter being full.

Despite the many challenges the industry faced last year with the outbreak of the COVID pandemic, the FAAMA stakeholders have staged a major recovery, confirming its relevance to the growth and way-forward strategy of the overall exports of the apparel industry.

“Our order books from September to December are full, which allows us to end the year with the expected target of $ 800 million. We find it as a significant achievement of the FAAMA members, to reiterate our contribution to the overall growth of the apparel industry and exports in these trying times,” FAAMA Chairman Pubudu de Silva told the Daily FT.

FAAMA is a key sub-sector of the $ 5 billion apparel industry, which has grown to be $ 800 million up from $ 500 million a few years ago.

He also said that the factories were currently operating in full swing, strictly adhering to the Health Ministry stipulated protocols, despite the additional cost borne by the manufactures.

Sri Lanka imports raw material worth $ 3 billion annually and FAAMA believes the local industry can significantly enhance its contribution with the right policies and support.

“Our value additions have increased from 30% to 50% over the past five years. The in-country sourcing has also led to the saving of foreign exchange outflow, as well as affirming that the country should have reasonable control over our supply chains,” de Silva said.

As the COVID pandemic disrupted the global supply chains and trade overall, he said it was difficult to forecast a number and confirm if the same sentiments of this year would continue for the year 2022.

“From our initial review of the industry, we have recovered and progressed well beyond our expectations. Our strategy now is to manage each situation, while taking necessary steps to navigate in uncharted waters. The industry will continue to be optimistic as we have been throughout the pandemic,” he added.

The Government had set an ambitious $ 6 billion export target for the apparel industry, but it was later revised to $ 5.1 billion due to setbacks resulting from the fourth wave of COVID. Last year, apparel exports dropped to $ 4.1 billion from $ 5.6 billion in 2019.

The shortage of foreign reserves, suppliers refusing to accept LCs, ever-increasing freight charges and raw material prices and ships bypassing Sri Lanka, were listed out as key issues being faced by the industry at present.

Although the port-related logistics issues have been taken up at a number of occasions with the support of Joint Apparel Association Forum (JAAF) and relevant authorities, de Silva said that the issue with the foreign exchange crisis in the country had further aggravated the challenges faced by all exporters.

It was also noted that FAAMA was working closely with the Government to find sustainable solutions for waste management issues.

FAAMA, like its parent JAAF, commended the Government for its aggressive vaccination drive, which had been a great support for industry employees in sustaining reliance and growth momentum.