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by Chandani Jayatilleke

Leading garment manufacturers are willing to invest in expansion projects and also support 'sick garment factories' if the Government continues to give concessions such as tax holidays, a top industrialist told the Daily News yesterday.

"We are willing to buy small garment industries which have run into financial difficulties and also expand our own ventures if we get enough support from the government," Anis A. Sattar, Director of Fergasam Garment Industries (Pvt) Ltd and Timex (Garments) Ltd said.

The two companies when taken together become the 13th biggest garment exporter in the island. It exported garments to the value of Rs. 1.98 billion from January to August 2002. The company exports ladies' garments to overseas markets such as the US, UK, Canada and Italy.

Big garment manufacturers have not gone into expansion programs in recent years as they are either in the completion of tax holidays or they have already completed the concessionary tax holidays.

There are many small-scale garment factories which are on sale at present. "But, unless we are given enough encouragement, we will not be able to go for expansion projects," he said. Anis is a member of the Sri Lanka Apparel Exporters' Association and National Apparel Exporters Association.

The garment industry, one of the top foreign exchange earners in the country has created over one million direct and indirect employment opportunities and is one of the dynamic contributors to Sri Lanka's overall economy.

Anis said that major markets of garments are still down and prices are sluggish. "The government should continuously support the industry to tide over this difficult situation.

We hope that this situation will improve sooner, but to sustain as an industry we have to inject more money in expansion projects," he said.

Vietnam, a new entrant in the global garment industry is becoming an emerging investment location, already having 900 factories there. "Vietnam is a major competitor and we have to work hard to retain our markets over Vietnam," he said. The government should strongly lobby for a quota free and duty free industry.

"At a recent seminar organised by AMCHAM, an American official said that his country would consider making our products duty free in the US market, if Sri Lanka would increase its trade activities (Imports in particular) with them.

At present, we pay taxes from 20 to 30 percent. The other competing region Africa is also in an advantageous situation following the Sub Sahara agreement with the US," he said.

He said that Sri Lanka urgently needs to develop a strong fabric base which will drastically reduce the unit cost.

"As a leading garment exporter in the world, we must develop a fabric base from which our industrialists could outsource their fabric requirements.

This will not only reduce our costs but also save Sri Lanka's reserves flowing out.

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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