Table of Contents
Current News Country Overview Economic Overview Political Stability Technology Environment & Climate State of the Industry Transportation Manufacturing & Shipping Business Etiquette Conclusion
Current News Sri Lankan Government Aids Farmers
President Maithripala Sirisena has commanded that 10,000 rupees be given monthly as relief aid to farmer families affected by the severe drought.
EU & EN pledge to help Sri Lanka
There is still a lot of reconciliation needed in the country of Sri Lanka after the 25 year civil war that ended in 2009. Both the EU & EN have decided to help aid and fund the country toward unity.
Brexit Gives Advantage to Exporters
Brexit will give a window of advantage to Sri Lankan apparel exporters as many countries that once enjoyed duty free exports will now lose the privilege therefore evening the playing ďŹ eld.
Country Overview In the 6th century B.C. the first Sinhalese arrived in Sri Lanka likely originating from Northern India. The first civilizations developed began in the cities of Anuradhapura and Polonnaruwa. The island was surrendered to British control in 1796 and formally united under British rule by 1815. The island then became independent in 1948 under the name Ceylon; the name officially changed to Sri Lanka in 1972. A two decade long war between the Sinhalese majority and the Liberation Tigers of Tamil Eelam (LTTE) devastated the country economically. Since its end in 2009 Sri Lanka Lan has been focused on moving forward by reconstructing its economy mostly through loans from China and resettling displaced civilians. As of January 2015, Sri Lanka has elected new government officials that the country hopes will help progress toward rehabilitation.
Location
Sri Lanka is an Island in Southern Asia located right off the coast of India.
Government
Presidential Republic Elected January 9, 2015: President Maithripala Sirisena Prime Minister Ranil Wickremesinghe
Population & Size
22.235 million | July 2016 Land: 24,954 square miles Water: 378 square miles Total: 25,332 square miles Slightly larger than West Virginia
Ethnic Composition Sinhalese 74.9% Sri Lankan Tamil 11.2% Sri Lankan Moors 9.2% Indian Tamil 4.2% Other 0.5%
Median Age & Sex Ratio
Education Level
One of the most literate populations of the developing world at 92.6% Right to free education included in the Sri Lankan Constitution of 1978 -Includes free books & uniforms up to year 11 Mandatory schooling between ages 5 to 14 Mand
The median age is 32.5 years old 96 males for every 100 females
Currency
Religion
Language
Buddhist 70.2% Hindu 12.6% Muslim 9.7% Christian 7.5%
Sri Lankan Rupee Sinhala 74% Tamil 18% Other 8% English spoken fluently by 10% of population
Economic Overview Budget Revenue 10.98 billion
Budget Deficit
5.5% of GDP About $13.5 billion
GDP
Labor Force
Service 45.9% Agriculture 28.4% Industry 25.7%
Unemployment Rate 4.5%
$246,618,394,774 $11,763 per capita
Inflation Rate
Growth Rate
Exchange Rate
4.8% annually
4.3%
146.6 Sri Lankan Rupees per US dollar
Exports
Textiles and apparel, tea, spices, rubber manufactures, precious stones, coconut products, and ďŹ sh
Export Partners US 26% UK 9% India 7.2% Germany 4.3%
Imports
Import Partners India 24.6% China 20.6% UAE 7.2% Singapore 5.9% Japan 5.7%
Petroleum, textiles, building materials, mineral products, foodstuffs, machinery and transportation equipment
Political Stability The relationship between Sri Lanka and the United States is based on their mutual commitment to the ideals of democratic governance. The Trade and Investment Framework Agreement (TIFA) was signed between the two countries in 2002. As a part of this agreement the countries have recently launched a five year plan in order to reform Sri Lanka’s trading and investment to meet world class standards, improve the competitiveness of Sri Lanka’s current exports, promote more interaction between US and Sri Lankan businesses, and the strengthening of ethically and environmentally conscious manufacturing processes. Ma 2000, the Indo-Sri Lankan Free Trade Agreement was signed giving Sri Lanka the ability to export over 4,000 product lines to India duty free. The current In March agreement between these two countries involves trades in goods, but there has been a proposed arrangement to include trade in services, investment, and economic cooperation. Corruption remains a major issue for the Sri Lankan government. There is a lack in transparency when it comes to government decision making and often political elites go unpunished for corruption crimes. Former President Mahinda Rajapaksa was involved in such crimes as abduction, murder, and large scale corruption including embezzling millions of dollars meant for 2006 tsunami victims. He remains under investigation because the Sri Lankan government is not equipped to handle such large crimes and many citizens still support Rajapaksa. However, Sri Lanka has placed new government officials in power and put an end to the 25 year civil war ushering in a new beginning for the country. Looking ahead, Sri Lanka plans to focus on the reconstruction of its economy with the help of such countries as the United States, China, and India. The government of Sri Lanka is committed to upgrading education and supporting small businesses and agriculture which they believe to be the backbone of a strong economy. Sri Lanka’s other main objective is to achieve 20% renewable energy by 2030. Sustainability is extremely important to the people of Sri Lanka and this is reflected in the way they manufacture their apparel and textiles.
Technology Sri Lanka is currently an industry leader in the utilization of cutting edge technologies in its thriving garment manufacturing industry that supplies top fashion brands across the world. Some of the country’s innovative manufacturing techniques include the production of wearable technology, e-textiles, automatic cutters, and the use of environmentally safe fabric treatment and color processing ingredients. Due to Sri Lanka’s priority of workers’ rights and environment preservation, most of the factories that the country houses are LEED certified by the US Green Building Council. LEED certification verifies environmentally friendly conditions as well as extremely safe conditions for both workers and equipment. ce
Environment & Climate Sri Lanka’s climate is tropical meaning throughout all twelve months the average temperature is at least 64°F (18°C) and there are only two seasons, a wet season and a dry season. Lavish rainfall often results in monsoons and flooding during the rainy season ranging from May to December. Droughts are not uncommon in the dry season which usually lasts from the end of December through March. Other possible environment issues to be aware of in Sri Lanka include landslides, earthquakes, tsunamis, and coastal erosion. Although these rarely have huge impacts on apparel manufacturers it is important to keep these in mind for possible delays in lead times of production.
State of the Industry Sri Lankan apparel manufacturers are globally renown for producing high quality fashion that is both environmentally and ethically made. Apparel and textiles is one of the most signiďŹ cant exports of the country and the strongest contributor toward strengthening the economy. The industry has grown rapidly in Sri Lanka over the past four decades and continues to only get stronger. Apparel and textiles account for 40% of total exports and 52% of industrial products exports. The main product category is lingerie and swimwear but also includes sportswear, loungewear, bridal, workwear, and childrenswear.
Apparel Categories
Main: Lingerie and Swimwear Sportswear, Loungewear, Bridal, Workwear, Childrenswear Export volume to US: $2.37 billion
Human Resources
Employed in industry: over 300,000 workers Wages: 8,970SLR-11,330SLR/month based on skill ($60-76) Workers are treated with respect & paid fair wages
Transportation International Airports
Sri Lankan Ports
Railways & Roads
Bandaranaike International Katunayake, Sri Lanka
Colombo to Savannah 22-41 days, $1,342
Road transport accounts for 93% of land transport
Mattala Rajapaksa International Mattala, Sri Lanka
Colombo to Los Angeles 13-54 days, $1,476
12,210.36 km of roadways and expressways
Colombo to New York City 19-36 days, $1,325
1,449 km of railway track
Ratmalana Airport Colombo, Sri Lanka
All prices based on Port of Colombo as it is the main port for exporting apparel.
Train routes connect the main cities of all 9 provinces of the country
Shipping & Manufacturing
Ceylon Shipping Corporation Ltd. 27 Bristol Street Colombo, Sri Lanka Tel: +94 11 2328772-3 Email: cscl@cscl.lk Web: www.cscl.lk
Sri Lanka Shipping Company Ltd.
Robert Senanayake Building 46/5 Navam Mawatha Colombo, Sri Lanka Tel: 94 11 2 336853 Email: pvicmb@slsc.lk Web: www.srilankashipping.com
Colombo
Emdee Exports
Underwear, athlectic wear, childrens wear Customers: Hugo Boss, Diesel, Helly Hansen, Nero Perla, Gap, F&F Tel: +94 11-4409600 Email: info@penguinsl.com Web: www.penguinsl.com Add Address: M&M Centre, 3rd floor No 341/5 Kotte Rd. Rajagiriya, Sri Lanka
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Linea Aqua
Swimwear Customers: Speedo, Brandot Intl. Tel: +94 36-4279600 Email: anilw@lineaaqua.com Web: www.lineaaqua.com Add Address: Thanahenpitiya Estate Kapugoda, Sri Lanka
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Mas Intimates
Hela Clothing
Wide range of men’s, women’s, & childrens wear Customers: Calvin Klein, Tommy Hilfiger, Tesco, Marks & Spencer Tel: +94 11-4791888 Email: info@helaclothing.com Web: www.helaclothing.com Add Address: 304 Grace Land Building 1st Floor Peliyagoda, Sri Lanka
Lingerie Customers: Victoria’s Secret, SOMA, Marks & Spencer Tel: +94 11-4207300 Email: info@masholdings.com Web: www.masholdings.com Add Address: 7th Lane off Borupana Rd. Kandawala Estate Ratmalana, Sri Lanka
Intima
Navalanka Industries
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Lingerie Customers: Victoria Secret, Giorgio Armani, Marks & Spencer Tel: +94 38-5674674 Email: ceo@intima.lk Web: www.intima.lk Add Address: 45/11 Modarawila Industrial Estate Pandura, Sri Lanka
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T-shirts, dresses, skirts Customers: Kmart, Macys, Nordstrom, Walmart, Von Maur Tel: +94 11-2448227 Email: rathiesh@sltnet.lk Web: www.rathilanka.com Add Address: 245-2/1 George R. De Silva Mawatha Rd. Colombo, Sri Lanka
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Business Etiquette Meeting & Greeting
Di Different greetings correspond with different ethnic groups within Sri Lanka. It is not expected of foreigners to be aware of the small differences but it is well received to try. The older generation will use namaste to greet which is a bow with palms clasped together at chin level and includes a slight nod of the head. The younger generation typically shakes hands firmly. Women often refrain from physical contact with men so wait for a women to extend her hand first. Formal titles are extremely important in Sri Lanka make sure to use Sir or Madam if unsure of someone’s title. Gifts are not expected although if appropriate Sri Lankans give and receive gifts with two hands. Gifts are not generally gene opened upon receiving. Hindus should not be given gifts of leather and both black and white are colors of mourning. Any gift received should be reciprocated.
Business
Because of o the importance of hierarchy in Sri Lankan culture it is most important to use formal titles and to include them on your own business card. Business cards are usually exchanged after an initial handshake and are to be treated with high respect. Offer and receive business cards with two hands. A first meeting should almost always be about relationship building only. Sri Lankans are non-confrontational so it’s important to try and read between lines and pick up on body language. First meetings will often be with a middle ranked business person and if it goes well then you will get the opportunity to meet with the lead decision maker, nothing happens without meeting and pleasing the decision maker. It is customary for meetings to be interrupted by other business and this should not be taken as an insult. pl
Dining
Sri Lankans Lan often plan a time to meet for a meal but the food will typically not arrive until hours later so if you are invited somewhere to eat at a certain time make sure to not arrive on an empty stomach. Wait to be shown where you are supposed to sit, order often matters. Make sure to wash your hands if you are asked whether you would like to or not. Use only your right hand to eat. Use bread and balls of rice to scoop items onto your plate. Keep elbows off the table. Leaving a small amount of food on your plate signifies you are full if it is all eaten you are showing that th you are still hungry. Once the meal ends expect to leave within half an hour, all socializing occurs before the meal.
Conclusion Risks
•Increasing innovation and technology may drive prices higher •Consistent flooding may affect lead times •Because Sri Lanka is an island it may be more expensive to ship
Benefits
•Competitive pricing while maintaining fair wages & safe factories •Advanced technology in garment production •Good relationship with the US-reduced tariffs
Conclusion
Sri Lanka as a whole is starting a new beginning after many years under inner turmoil. The country is now healing and rebuilding. This fresh start is aiding its garment industry toward becoming a world leader in quality apparel that is made consciously. The advancement has just begun and already Sri Lanka is a wonderful choice for garment manufacturing.
References Breaking News. (n.d.). Retrieved February 22, 2017, from http://www.dailymirror.lk/news/60 J. (n.d.). Department of Commerce Sri Lanka. Retrieved February 22, 2017, from http://www.doc.gov.lk/web/index.php?option=com_content&view=article&id=113&Itemid=115&lang=en Freight Calculator. (n.d.). Retrieved February 22, 2017, from http://worldfreightrates.com/freight Get Insights By Country. (n.d.). Retrieved February 22, 2017, from http://globaledge.msu.edu/countries/sri-lankan/economy Home. (n.d.). Retrieved February 22, 2017, from http://www.commisceo-global.com/country-guides/sri-lanka-guide Joint Statement on the 12th Joint U.S.-Sri Lanka Trade and Investment Framework Council Meeting | United States Trade Representative. (n.d.). Retrieved February 22, 2017, from https://ustr.gov/about-us/policy-offices/press-office/press-releases/2016/april/joint-statement-12th-joint-us-sri Professional web design and web development by www.tnt.co.th. (n.d.). About Us. Retrieved February 22, 2017, from http://www.thaibizsrilanka.com/lk/about/page4.php Qadijah Irshad Colombo. (2016, February 08). Sri Lanka's former leader Mahinda Rajapaksa is no longer 'untouchable' Retrieved February 22, 2017, from http://www.independent.co.uk/news/world/asia/sri-lankas-former-leader-mahinda-rajapaksa-is-no-longer-untouchable-a6862086.html Reference guide. (n.d.). Retrieved February 22, 2017, from https://www.searates.com/reference/ G. (n.d.). Sri Lanka Corruption Report. Retrieved February 22, 2017, from http://www.business-anti-corruption.com/country-profiles/sri-lanka The World Factbook: SRI LANKA. (2017, January 12). Retrieved February 22, 2017, from https://www.cia.gov/library/publications/resources/the-world-factbook/geos/ce.html Trade Relations between Sri Lanka and the U.S. | Embassy of Sri Lanka – Washington DC USA. (n.d.). Retrieved February 22, 2017, from http://slembassyusa.org/trade/trade-relations-between-sri-lanka-and-the-us/ US-SRI LANKA TRADE AND INVESTMENT FRAMEWORK COUNCIL ADOPTS ACTION PLAN TO BOOST BILATERAL TRADE | Embassy of Sri Lanka – Washington DC USA. (n.d.). Retrieved February 22, 2017, from http://slembassyusa.org/embassy_press_releases/us-sri-lanka-trade-and-investment-framework-council-adopts-action-plan-to-boost-bilateral-trade/
By Kelly Hippenmeyer