Time for SL to become apparel distribution centre: JAAF

By Zohara Ghaffoor

The time is right for Sri Lanka to become a global apparel distribution centre, while also capitalizing on China’s plans to outsource its apparel production to neighbouring countries in Asia, said MAS Holdings Deputy Chairman/CEO and Joint Apparel Association Forum (JAAF) Sri Lanka Chairman Sharad Amalean. According to Amalean, Sri Lanka’s geographical location makes it ideal for a concept where the island handles stock distribution and replenishment for apparel manufacturing carried out in Asia. Speaking at the launch of the 8th edition of the Apparel Industry Suppliers Exhibition (AISEX) on Tuesday, Amalean said a few apparel buyers were already in discussions to obtain such services from the country. He said that certain countries would rather have stocks stationed in and distributed through Sri Lanka to their stores around the world, to reduce cost.
“We now want to work on a business-to-customer (B-to-C) concept,” he said.

Referring to an apparel forum held by Alibaba, he said China was planning to remove itself from the apparel manufacturing sphere and focus on higher value-added products, such as designing.
He noted that China had plans to outsource its apparel manufacturing role to countries such as India, Myanmar, Indonesia, Ethiopia, Bangladesh, Sri Lanka, etc., and use the Alibaba platform to display the designs for sale.
However, he said if Sri Lanka were to make use of this opportunity, a Free Trade Agreement (FTA) between Sri Lanka and China would go a long way, adding that the country had to take steps to be vertically integrated.
He said the positioning of warehouses and raw material in the least was necessary.
Noting that money in the apparel industry was made through additional services rendered, Amalean said if the industry was able to provide speed, it would, in turn, be able to command a better price. He was keen to note that speed in the apparel industry, to the point of bringing in it down to overnight delivery, was the ultimate target.

“How will Sri Lankan apparel cope with speed? If we take 60 days to deliver from concept to delivery, how are we to compete with Amazon’s concept of overnight delivery? Customers are now able to get their preferred products at their doorstep.”
He said the key was to incorporate digitalization and restructure the apparel industry value chain.

Last year, Finance Minister Mangala Samaraweera announced his vision for Sri Lanka to one day be seen as a hub for design, development and logistics for all major global apparel players, which would enable true value-creation in the apparel industry.
The original target of the apparel industry was US$ 8.5 billion by 2020. However, this target was revised by the Sri Lanka Apparel Exporters Association to US$ 8 billion by 2022, owing to the delay in regaining the GSP+ concession, Budget factors and global market conditions.

He said the positioning of warehouses and raw material in the least was necessary.
Noting that money in the apparel industry was made through additional services rendered, Amalean said if the industry was able to provide speed, it would, in turn, be able to command a better price. He was keen to note that speed in the apparel industry, to the point of bringing in it down to overnight delivery, was the ultimate target.

“How will Sri Lankan apparel cope with speed? If we take 60 days to deliver from concept to delivery, how are we to compete with Amazon’s concept of overnight delivery? Customers are now able to get their preferred products at their doorstep.”
He said the key was to incorporate digitalization and restructure the apparel industry value chain.

Last year, Finance Minister Mangala Samaraweera announced his vision for Sri Lanka to one day be seen as a hub for design, development and logistics for all major global apparel players, which would enable true value-creation in the apparel industry.
The original target of the apparel industry was US$ 8.5 billion by 2020. However, this target was revised by the Sri Lanka Apparel Exporters Association to US$ 8 billion by 2022, owing to the delay in regaining the GSP+ concession, Budget factors and global market conditions.