FTZ apparel exports at crossroads hitting Rs. 5 Bn in 2022 | Daily News

FTZ apparel exports at crossroads hitting Rs. 5 Bn in 2022

Dhammika Fernando
Dhammika Fernando

The Free Trade Zone Manufacturers (FTZMA) apparel exports have reached USD 5 billion in 2022 which is an increase as against last year but exporters warned that this healthy trend is not going to continue.

Secretary Free Trade Zone Manufacturers Association, Dhammika Fernando said that last year Free Trade Zonal apparel exports companies’ revenue was around USD 4.8 billion and there is a USD 200 million increase as against 2021.

“Though it’s true that our exporters have bettered the 2021 annual figure, the export revenue in the last two quarters of 2022 have seen a drop and we also see this trend continuing. This is because of a dip in globe demand resulting in a world economic recession,” he said.

Fernando said that the profit margins of the manufacturing companies are drastically coming down due high manufacturing costs.

“Zonal apparel exporters are also facing other revenue losses due to new taxes introduced by the government, high electricity charges and other overheads.”

He said that due to these factors some of the companies are folding operations and moving out of Sri Lanka to other countries which have lower tax regimens and low manufacturing costs. He said that this will not only create a loss of foreign exchange revenue to Sri Lanka But also lead to unemployment as well. Fernando said that in the past it was the small-time manufacturers that brought these issues but now even large sector companies have trimmed down their staff and taking huge cost cutting measures.

FTZMA says that since the apparel sector is among the top two foreign exchange earners to Sri Lanka along with foreign remittances the government must look at offering more ‘support’ to the industry by way of reducing tax and offering other concessions. If this is not done, apparel exports will fall down to around the fifth or even lower place in the Sri Lanka foreign export earning export basket.


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