Competiveness of Sri Lankan apparel

industry

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 Sri Lankan apparel industry

• Sri Lankan Apparel Manufacturers & Suppliers are

reputed worldwide for producing top quality ethical fashion
apparel trusted by the iconic global fashion brands.

• Sri Lanka’s apparel export industry is the most significant

and dynamic contributor for Sri Lanka’s economy. The
industry has enjoyed epic growth levels over the past four
decades and is today Sri Lanka’s primary foreign exchange
earner accounting to 40% of the total exports and 52% of
industrial products exports. This industry, entirely privately
owned has successfully exploited the opportunities in the
international market.

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Assessing the Competiveness of Sri Lankan
apparel industry using diamond model
• Factor Conditions
– HR- Cheap labor is no longer being crucial for achieving
competitive advantage
– Skill level labor is positive factor
– Most apparel plants now have JCC rather labor unions which
resulted good employee relationship

– Physical Resources- 12 EPZ s

– Removal of GSP+ of EU on 2012 has enables apparel

companies to think alternative methods to improve their
productivity to reduce the cost

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• Knowledge factors – SL government universities
provides knowledge workers for apparel sector

• Infrastructure:
– Advantage of Strategic location
– The efficiency in customs procedures complement each
other in minimizing transit periods for shipments
involved in international trade have made Sri Lanka
more internationally competitive
– Zero VAT for export Industry
– Focus to improve speed on delivery using strategic
location advantage, coupled with the conducive
business friendly environment within the country.

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Demand Conditions

• Local apparel industry the demand conditions are not up to

the level required to be competitive in the apparel
manufacturing industry. Sri Lanka does not have much
fashion conscious/ brand conscious consumers when
compared with its export markets such as EU or USA.

• The standards or the quality level is not very high when

compared with the foreign consumer in US and EU.

• Local demand condition makes very low level of input to

market information about the consumer requirements in
newproduct development.

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 Related And Supporting Industries
• The growth of local raw material suppliers as
well as equipment suppliers in recent years due
to foreign direct investments can be given as a
positive initiative

• SL has good accessories suppliers like lace,

elastic, bra wires, hooks, bottons are all made
locally.

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 Firm’s Strategy, Structure, And Rivalry
• Apparel giants Brandix, MAS & Hidramani in Sri Lanka focus on
differentiation strategy through the continuous innovation of
products and the constant maintenance of stringent quality
standards that the company is renowned for.

• Focus eco-friendly apparel production facilities.

– Hidramani- ‘Mihila’ (the world’s first custom built eco-friendly
apparel factory,)
– MAS- Thrulie (the world’s first clothing factory powered solely by
carbon-neutral sources.)
– Brandix- Brandix casualwear -Seeduwa Green Plant-(world-first
Platinum rated Green Factory)

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• Intense local competition between apparel giants
Brandix, MAS, Hydramani to capture renown brands
such victoria secret, M & S, Nike… which enables both
companies to improve their quality, production
procedures which improve overall success of apparel
sector in Sri Lanka

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Government

• Government propose separate AL subject call fashion design under

technological stream

• 2017 Budget proposal suggest a formation of textile cluster to

include sizing, dying & finishing units by private sector

• 300Mn allocated for vocational training for scholarships to generate

trained workers for apparel & textile sector

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