Tourism & Tea in Sri Lanka

by Daily Mirror, Colombo, January 5, 2007

Tourism in Sri Lanka recorded a negative growth with arrivals dropping by 3.0 per cent to 549,308 in 2005...The Loss of Tourism earnings was much more severe than the loss in arrivals, with a drop of 54.5 per cent, to Rs. 36,377.3 Million (USD 362.3 mn) during 2005

Western Europe continued to be the single largest source of tourism to Sri Lanka, accounting for 41.3 percent of the total arrivals... South Asia 27.9 per cent; North America – 8.4 per cent; North East Asia – 6.7 per cent; South East Asia – 6.1 percent and Australasia – 5.4 per cent.

Value of Sri Lankan tea exports during the period January/November 2006 reached a highest ever Rs.83 billion... Russia/CIS is the prime destination with an absorption of 72MnKg, up from 63 in 2005. The UAE has also grown from 33 to 41Mnkg. Syria 28Mnkg, Iran 24MnKg, Turkey 12MnKg, Iraq 11Mnkg and Japan 10MnKg follow.

Visit Lanka chief calls for re-branding tourism

The tourist industry will have to reposition from its cultural focus to promoting Sri Lanka as a beach destination says Nihal Illeperuma a leading tour operator in the country.

Nihal Illeperuma, Managing Director of Visit Lanka, an inbound tour operator says that with ongoing security issues in the country, Anuradhapura and Polonnaruwa considered risky areas, the time has come for Sri Lanka to show case our beaches. This change would be purely tactical but a move that will ensure the survival of the highly endangered industry.

These tour operators say that Sri Lanka can get a much larger share of tourist arrivals from places like European countries if a re-branding is done to the destination by removing the cultural tag. The Visit Lanka tour operators say that they have been successful in their “beach only” packages in the recent past.

The current tourist season which began in November is a very depressing period for the industry and Illepuruma even foresees a drastic drop in the off season tourist arrivals next year since there is talk of the airline with direct flights to Sri Lanka from Benelux countries are considering to stop.

Visit Lanka, which has a large share of this off season market from the Benelux countries, says that these tourists help sustain the industry even though they are low paying as their minimum stay is fourteen days.

Tourists staying at 40 US$ a night have now become the standard and most of these are beach tourists with possibly a night’s stay in Kandy. Tour operators like Visit Lanka are now saying that investors in this industry should think again before they build luxury hotels. “If you build a 100 or 150 dollars a room resort when the market is only demanding a 40 dollar rate it will be hard to recover the investment” says Nihal Illeperuma.

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http://www.sangam.org/2007/01/Tea.php?uid=2162

Playing Tough

Vietnam, vanishing margins, wages worry Sri Lanka apparel trade in 2007

by Zainab Ibrahim, LankaBusinessOnline, January 1, 2007

Over 50 percent of the island's export earnings come from the 2.7 billion dollar garment industry, which has carved out a niche to turn out top quality apparel, exotic lingerie at a quick turnaround time.... Vietnam [is] counting on WTO membership for greater access into Sri Lanka's biggest market – the United States... Sri Lanka is falling behind on exports to the US, dropping one percent as of end September 2006 to 1.2 billion dollars... "This is the first time that the industry got involved in official level talks with the US. They were quite impressed with our 'Garments without Guilt' program."

Vietnam, vanishing margins and wages will top the list of concerns of Sri Lanka's apparel trade this year, as it counts on expanding trade ties with Europe to pull it through.

Over 50 percent of the island's export earnings come from the 2.7 billion dollar garment industry, which has carved out a niche to turn out top quality apparel, exotic lingerie at a quick turnaround time.

Sri Lanka is the largest supplier to lingerie chain Victoria's Secret, also ships clothes to top brands like GAP, Levis, Marks & Spencer and Tesco in the United States and Europe.

But from this year, as Vietnam joins the ranks of free trade countries with its entry into the World Trade Organization, Sri Lanka has a bigger fight on its hands.

When a country joins the WTO, trade restrictions between it and the rest of the world are relaxed, with Vietnam counting on WTO membership for greater access into Sri Lanka's biggest market – the United States.

"Vietnam joining the WTO will definitely be a threat to us because they compete in a majority of the same product lines as us such sports wear and casuals. They have also grown 25 percent this year, without even entering the WTO," A Sukumaran, Group Managing Director of Star Garments Limited, told LBO.

Faced with regional competition and out priced by giants like China and India, Sri Lanka is falling behind on exports to the US, dropping one percent as at end September 2006 to 1.2 billion dollars.

Sri Lanka may be able to count on trade restrictions, at least in the short term however, with the US congress throwing out legislation in November that would have normalized trade relations with Vietnam.

The legislation would have done away with quotas on imports from Vietnam, which will now remain, but would have also made anti-dumping measures against it, easier to impose.

Europe already abolished quotas on imports from Vietnam in 2004, but Sri Lanka has duty free access into Europe for its garments that it is counting on to cushion it against competition.

Bargaining Chips

Sri Lanka is the only South Asian country to win duty free access into Europe – its second biggest market -- for its high labour standards, under the EUs Generalized System of Preferences Plus (GSP+) scheme.

This year, tough Rules of Origin, which specifies the level of local value addition needed to get the duty free benefits, is to be relaxed further, making more Sri Lankan exports eligible for the tax breaks.

The rules are likely to be brought down from a high 50 percent local value addition to about 35 percent, benefiting Sri Lanka, which imports bulk of its fabric for its clothes.

Sales to Europe surged 12 percent as at end September '06 to 832.7 million dollars, due to improved sales in UK, Italy, Germany and the Netherlands. "The trade deal with Europe is what we are counting on this year," Sukumaran said.

Though Sri Lanka re-opened talks on a trade deal with the US late last year, the industry is largely sceptical that anything much will come of it.

"This is the first time that the industry got involved in official level talks with the US. They were quite impressed with our 'Garments without Guilt' program," Ajith Dias, Chairman of the Joint Apparel Association Forum, told LBO in an interview.

"Come January, we are hoping to do a roadshow in the US." Sri Lanka recently launched a public relations campaign tied to ethical manufacture – no child labour and no sweatshops.

The campaign could be Sri Lanka's edge as buyers like M&S go ahead with their ethical trading 'Look Behind the Label' campaign and surveys in the UK show that 78 percent of shoppers want to know more about how their clothes are made.

But though buyers have lauded Sri Lanka for its high standards and efforts, exporters are not really expecting that it will be translated into a trade deal with the US.

"Sri Lanka is expensive, we have a war and we have child soldiers," one exporter told LBO. An escalating conflict between the government and Tamil rebels is threatening to spook buyers, with growing international criticism of the use of child soldiers in the war.

Orders in the last few months of 2006 had begun falling off, while pressure continued to mount on prices and margins.

"Order books for the last quarter of the year were very bad. For the first quarter of next year orders are getting filled up, but prices are low. Prices have dipped on average by around 10 percent since quotas were lifted in December 2004," Sukumaran said.

Last year, Marks & Spencer said it was cutting supplier payments by up to 5.5 percent, demanded better terms from its producers and dropped prices on clothes.

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http://www.sangam.org/2007/01/Tough.php?uid=2161

ஆமா இதில என்ன எழுதியிருக்கு....??ஃ க. போவானே......

சிறீலங்கா மிகவும் பலமான பொருளாதாரத்தோடை இருக்கிறது மட்டும் இல்லையாம்... எங்களை விட அதிகமான பணத்தையும் சிங்கள சனத்திட்ட நன்கொடையாய் வாங்கி தமிழருக்கான் போராட்டத்தை பலப்படுத்துகிறதாம்.... வெளிநாடுகள் எல்லாம் குடுக்க முடியாது எண்டு சொன்னாலும் பிச்சை எடுக்கிற நிலையிலை அரசாங்கம் இல்லை... மிக விரைவிலை வன்னியை கைப்பற்றும் அளவுக்கு வருமானம் வருக்குது.... அதோடை இல்லாமல் வன்னியை பிடித்த பின்னர் தொடர்ந்து கட்டுப்பாட்டுக்குள்ளையும் வைத்திருக்கும் திறன் மட்டும் இல்லாமல் எந்த விதமான இளப்புக்களும் வராமல் தடுக்கும் திறனோடையும் இருக்கிறதாம்...

அதாலை இலங்கைக்கு அணில் பாலம் போட்ட மாதிரி இலங்கை மீது பொருளாதாரதடை விதிக்க கூடாது எண்று கேட்டுக்கொள்ளுக்கினம், எனது அன்பர்கள்...!