Financial Times

Industry
Good news for the struggling garment industry
As anticipated, the government provided sops to an apparel industry struggling to face up to the challenges of a quota-free era next year. "All the proposals that we made have been accepted and included in the budget proposal and we are thankful to the government," said Tuly Cooray, Secretary General of the Joint Apparel Association Forum (JAAF).

He said the industry was pleased as its role in the market and the present situation had been recognized, adding that they were looking forward to the implementation of the proposals. Ashraff Omar, Chairman of JAAF echoed Cooray's comments, saying, "We are very excited about the SME scheme and the funds for training."

"It is a good start for the companies to continue," noted D. P.Gunawardane, Director of the Textile Training and Services Centre. Under the incentives proposed for the textile industry all textile requirements of armed forces, police, health services, prisons and other government agencies would be manufactured locally.

Gunawardane said that the manufacture of school uniform material which was sourced to the local manufacturers this year had been very successful and was able to produce all of next year’s requirements on time.

This fact was also mentioned in the budget. Gunawardane added that if the budget proposals were implemented, the local textile manufacturers would have an assured market.

The budget had some benefits for the tourism industry, the fastest growing in recent years. Udaya Nanayakkara, Chairman Tourist Board, said it is focused on rural development. "The development on the rural sector certainly helps tourism. The government is correct in identifying the importance of the tourism sector to the economy and also its decision in not taxing the industry on its recent success is principally sound. Overall I would say that it's a tourism-friendly budget."

Ratna Sivaratnam, Chairman of the Export Development Board (EDB) was upbeat. "I commend the Ministry and the Treasury for taking up the recommendations by the private and public sector through the NCED, and what satisfies me is that the representation made by chambers which fell into deaf years in the previous budgets have been recognized this year."

He believes that it is a progressive budget, which can be exploited towards growth, by the "big boys" who have not had any heavy burdens placed on them, and also the Small and Medium Enterprises (SME's), who have received a lot of encouragement with support and concessions.

He added that the SME's have to be educated about global trends and demands in order to have quality products that are globally accepted. Commenting on the wage increase for the public sector, Sivaratnam said, "There is nothing called a free lunch. The wage increase is linked with longer working hours. This will justify the increase."

A huge responsibility has been placed on the EDB in the export oriented budget proposals and this is a challenge that the EDB is willing to take, says Sivaratnam.

The EDB has been granted funds from various sectors and this money will be used properly to build up the SME's and related projects. The EDB will be concentrating on the gem and jewellery industry, rubber products and protected agriculture industries in the coming year and will be gearing up to make these industries creative, innovative and competitive.

He praised the setting up of a SME Bank as this will enable the industrialists to attain necessary funds without any problems. Sivaratnam believes that 15-20 per cent growth for the coming year is not out of line.

Back to Business