Apparel sector gets incentive package

Uditha Kumarasinghe, Irangika Range and Sandasen Marasinghe

Export Development and International Trade Minister Prof. G.L. Peiris told Parliament yesterday that the Cabinet has decided to provide a stimulus incentive package to boost the apparel sector which was the largest exporter and Rs. 3.1 billion foreign exchange income earning base to the country.

Presenting several orders relating to cess levy under the Sri Lanka Export Development Act No. 40 of 1979 to Parliament, the Minister said the Government fully realised its responsibilities of protecting local industries from the consequence of the world economic crisis.

The Cabinet after studying the impact of the world economic downturn, has decided to grant concessions to develop both the apparel and tea sectors, which play vital roles in the economy.

It has decided to exempt the apparel sector by 15 per cent of electricity surcharges for this year. Meanwhile, the industry will also be totally exempted from economic service charges.

"These opportunities will lead the apparel sector towards progress as it would reduce their production cost immensely," Minister Peiris pointed out.

Almost three million of people out of the 19 million population mainly in the rural areas contribute to the industry both directly and indirectly, he said.

"We have also decided to grant a special incentive of five per cent on their value added garment exports for 2009," he said.

"We are in a strong position in the economical states compared to other countries," he stressed.

People have not lost their jobs though a number of countries have cut off job opportunities in a large scale due to the global economic crisis. Brandix Company will open its largest factory in Batticaloa shortly to provide nearly 1, 700,000 job opportunities to people in the area," he noted.

"With the reduction of one litre of furnace oil by Rs. 10, the entire industrial sector is expected to boost further," he added.

The Minister said Sri Lanka has 80 per cent of market shares in the world tea market.

"Sri Lankan tea which is well - known as 'ceylon tea' export to Latin America, Chile Brazil, Argentina etc. while we are exploring new market potentials in Western European countries. Tea is the third largest exporter earning Rs. 1.1 billion to the country. "We will not allow tea prices to fall and Rs. 45 will given to tea producers for a kilo of green tea," he said.

Prices of Ceylon tea have stabilised in the world market and a kilo of tea is sold at Rs. 300 in the global market, Prof. Peiris said.