Leveraging on creativity and experience in many fields such as Design, R&D and Innovation, the Sri Lankan Apparel Sector has shown steady growth over the past three decades. This flagship export sector has evolved from the traditional low-wage driven cost-competitive model of production, to where the island’s manufacturers now provide sophisticated solutions to the industry’s more complex needs of the world’s leading brands.
The apparel industry earned US$3938.85 million in export revenue in 2020 contributing 39.74 % of the country’s merchandise exports (EDB Sri Lanka, 2020). According to Sri Lanka Apparel, the website of the Joint Apparel Association Forum of Sri Lanka (JAAFSL), the industry directly employs 350,000 people with approximately twice the number of people employed indirectly to sustain the 350,000 strong workforces. These direct employees represent 15% of the country’s total industrial workforce. In a country that struggles with female workforce participation, the apparel industry has leapt to the forefront of empowering women to be financially independent. Sri Lanka’s ability to grow apparel exports year after year despite paying the highest wages in the region is astounding and tantamount to the industry’s desire to grow responsibly, accountably, and transparently.
The 2020 COVID-19 pandemic had also taken a toll on Sri Lanka’s textile and clothing sector. With a slowdown in global demand, exports were forecast to plummet 30% in 2021. Although most factories reopened soon after shutting down in response to COVID-19, the restrictions imposed by the government including curfews, social distancing at workplaces limited attendance and overall capacity. The pandemic however was a double-edged sword for the Sri Lankan apparel industry presenting it with some real opportunities. It did not take long for the industry to start responding to orders to produce personal protective equipment (PPE).
Just as Sri Lanka's apparel industry is a world leader in its adherence to ethical labour standards, the industry is also a world leader in environmental sustainability initiatives. On top of countless sustainable products, the country had its first facility certified as carbon neutral in 2012 and since then, many facilities have followed suit, operating as net-zero carbon emitters.
As per AIA New York, the country is host to South Asia's first Passive House certified project and the world's second Passive House certified factory building in the world. Passive House is the world's leading standard in energy-efficient construction based on stringent standards for quality, comfort, and energy efficiency. Additionally, Sri Lanka has several LEED (Leadership in Energy and Environmental Design) certified facilities; the world's most widely used green building rating system.
According to Business Wire, the global leader in press release distribution and regulatory disclosure and a Berkshire Hathaway company, the global apparel market reached a value of nearly USD 527.1 billion in 2020, having declined at a compound annual growth rate (CAGR) of -0.6% since 2015. The decline during this historic period is primarily down to lockdown and social distancing norms imposed by various countries and economic slowdown across countries owing to the COVID-19 outbreak and the measures to contain it. The market is then expected to recover and grow at a CAGR (Compound Annual Growth Rate) of 9.8% from 2020 and reach USD 842.7 billion in 2025, and USD 1,138.8 billion in 2030.
The major opportunities in the apparel market segmented by type will crop up in the women's wear segment, which will gain USD 162.4 billion of global annual sales by 2025. The major opportunities in the apparel market segmented by fabric type will crop up in the man-made fibres segment, which will gain $231.4 billion of global annual sales by 2025. The major opportunities in the apparel market segmented by distribution channels will crop up in the offline sales segment, which will gain $158.5 billion of global annual sales by 2025. The apparel market size will gain the most in China at $54.0 billion.
The projected global demand for Apparel over the next decade spells massive growth opportunities for the export Apparel sector in Sri Lanka. The sustainability initiatives ardently embraced by the Sri Lankan Apparel Manufacturers, increasing investments in R & D and advanced manufacturing technologies, enormous local talent in fashion design and advanced education programmes to groom that talent, the skilled workforce and visionary leadership all combine to help the country enlarge our market share both by winning over more buyers in the existing markets and by penetrating new markets through clever marketing endeavours and high quality and innovative offerings.
The PPE market opened by the Covid-19 pandemic will continue to generate earnings as the pandemic is still far from over. The active intervention and multidisciplinary support led by the BOI and the other government agencies in charge of the development of the export apparel sector will encourage the local entrepreneurs and the foreign investors further to capitalise on the emerging opportunities and double or even quadruple Sri Lanka’s current apparel export earnings. The Apparel Manufacturers and Exporters in Sri Lanka too must pay even closer attention to the emerging trends and benchmark their products to suit what’s sought by the global fashion labels and explore the possibilities of innovation, capacity expansion and productivity gains.