SL apparel industry needs to firm up vertical integration, import substitution: FAAMA

The Fabric Apparel Accessory Manufacturers Association (FAAMA) asserted the need for the local apparel sector to firm up vertical integration and import substitution.

The newly appointed FAAMA President Sahan Rajapakse pointed out that Sri Lanka has tremendous potential in this regard as most of the fabric requirements are imported, which include 10 percent synthetic fabrics, and approximately 50 percent cotton. Only roughly 10 percent are produced domestically.

“When we look at it from a numerical perspective, there’s a significant market share we can capture. But it’s not just about the numbers; it’s about how we redefine the industry, position our country, and introduce innovation. 
“It’s about creating true vertical integration, encompassing lead times, pricing, and industry flexibility. At FAAMA, we can seize this potential, establish true vertical integration, and expand into the global market and supply chain,” said Rajapakse speaking at the 16th Annual General Meeting of the Association.

Sri Lanka currently imports most of its fabric requirements and raw materials, amounting to US$ 2 billion annually.

Joint Apparel Association Forum (JAAF) Chairman Sharad Amalean, noted that while the industry is facing a drop in orders, the importance of vertical integration cannot be overlooked. Strengthening Free Trade Agreements (FTAs) with neighbouring countries like India is essential if the sector is to develop and compete with the likes of Bangladesh. “We mustn’t overlook the opportunity to engage in trade with our close neighbour, India. There’s a substantial market right there, and we need to strategise on how to become an integral part of it,” said Amalean.

Currently, Sri Lanka imports a significant amount of Indian yarn and fabric, yet our access to duty-free trade with India is severely restricted. 

“This is a challenge that we at JAAF have taken head-on, engaging directly with the President and the Chief Negotiator to strengthen our Free Trade Agreement (FTA) with India,” he added.

Meanwhile, the outgoing Chairman of FAAMA, Pubudu De Silva, pointed out that the aim to position the apparel industry as a comprehensive vertical solution. 

“In every solution we offer, we must emphasise our country’s identity as a hub for this industry,” he said. Further, as part of FAAMA’s commitment towards sustainability, the AGM also saw the signing of an MOU with MAS Foundation for Change to work collaboratively on the “Ocean Strainer Project.”