The Garment Industry in Sri Lanka Why Sri Lanka? Sri Lanka’s apparel industry has grown to be one of the largest contributors to the export revenue of the country. coun try. The country having established itself as a reliable supplier of quality garments at competitive prices, also upholds ethical practices backed by legislation, thus being identified as a producer of “garments with no guilt” Being the single largest employer in the manufacturing sector the apparel industry provides close to 75% of Sri Lanka’s employment either directly or indirectly. The industry has been positioned as a socially responsible and preferred destination for apparel sourcing. Sri Lanka is also the the only outsourced apparel manufacturing country in Asia having signed up to 30 of the ILO conventions. It stands out as a reliable source that pays fair wages to its workers while discouraging sweat shops an d child labor in its businesses. Environmental issues too are given precedence, thus ensuring that raw material used in the manufacturing of garments have passed all the standards specified and approved by high street customers; this has gone a long way in creating a friendlier and more sustainable environment. The Industry itself, after decades of assembling garments together is now moving towards positioning itself as a ‘fashion’ industry. One of the key advantages advan tages of sourcing from Sri Lanka is the island’s central and advantageous location which facilitates the shortest shipping time to Europe, which under normal circumstances takes less than 16 days. [Page Break]
PEST analysis for apparel industry Political Factors • •
Government polices – tax benefits (BOI), free trade zones zo nes New rules and regulations -
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Interest rates Exchange rates Economic growth
Social factors Attitudes and culture Partnerships Cultural trends – woman come for work before they get married. When they get married they levees the factory People lives in towns don’t care about the people who work in garments. In villages if woman is working in garments, men will willing to marry them than woman who were not working. • • •
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Technological factors • •
New technology introduce Global network
SWOT analysis for the Company
Strengths
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Market chare Product portfolio Financial sustainability
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Reliability on core business
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Weakness
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Emerging economies
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Environmental effects Legislative effects Interest rates Huge competition
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s M&S goes eco with its lingerie, our fashion director checks out their green new factory in Sri Lanka Last updated at 11:02 AM on 12th November 2008 • • •
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The clothing industry has been getting a lot of bad press of late. Reports of children sewing our High Street bargains in appalling conditions. The current mania for ever more disposable, ever faster fashion that is not only bad for our wallets, it’s devastating for the environment. But I am standing in a palm-filled courtyard filled with bird song in Thurulie, two hours’ drive from Colombo, the capital of Sri Lanka and, to be honest, what I'm seeing has restored my faith in fashion as a force for good. I am in the world’s first 100 per cent carbon neutral, 100 per cent green, 100 per cent ethical factory. Scroll down for more
Marks & Spencer's 100 per cent carbon neutral, 100 per cent green, 100 per cent ethical factory in Thurulie, Sri Lanka Funded and built by Marks & Spencer in partnership with a local, award-winning manufacturer called, confusingly, MAS, this temple to sustainability is about to produce the world’s first eco underwear: the Per Una organic cotton bra, at £14, with matching knickers at £6, available in shops in January. There are 'cool roofs', which reflect the sun. There are huge windows that magically let in natural light, but keep heat out. There is rainwater harvesting, which has reduced water consumption by 50 per cent, and Sri Lanka's biggest array of solar panels, reducing electricity consumption by 40 per cent. And staggeringly, every single one of the workers has a view of palm trees and the natural lake with its lily pads, flocks o f pelicans and the mountains beyond. I am taken on a tour of the effluent treatment works – my, fashion can be so glamorous – that convert waste into drinking water, and am shocked to learn that of all the garment manufacturers in the world, only M&S insists each of its factories treats its waste.
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Instead of air conditioning there is an ingenious system called 'evaporative cooling', which uses 75 per cent less energy. 'The building had to work,' says Vidhura Ralapanawe, the super-enthusiastic manager of sustainability. 'We couldn’t have perspiration on the clothes.' The factory, that will soon be making a high percentage of all M&S undies, was opened in April this year by Sir Stuart Rose, executive chairman of Marks & Spencer. Early in 1997, having watched An Inconvenient Truth, Al Gore’s documentary about climate change, he came up with Plan A ('because there is no plan B'): a five-year, 100 point initiative to take the lead on environmental and ethical issues. Much has already been achieved: food carrier bag usage is down by 80 per cent; 70 million coat hangers have been recycled (staff are now trained to say, 'Can I recycle your hanger for you?' as they wrap your purchases); 90 per cent of food packaging is recyclable; fairtrade cotton sales are up 105 per cent; the 'Wash at 30’ campaign has saved over 50,000 tonnes of CO2. M&S already bans leather from India because of its ethical and environmental issues, has recently inspected its cashmere farms in inner Mongolia (I’d have preferred M&S to inspect first, buy later), and is committed to changing all its pork to free range. This building is a big, shiny (not that shiny; as well as the 'cool roofs' there are 'green roofs', covered in vegetation) culmination of the brand’s commitment to trading fairly. They are very into 'empowerment' here. Women, who make up 90 per cent of the 915 workforce, are encouraged to maintain a good work life balance, and to climb their way up the career ladder: a third of management are female. The factory has deliberately been built in a rural area, so that employees can remain in their villages.
The organic cotton lingerie made in the Sri Lankan factory is reasonably priced, at just £14 for a bra and £6 for knickers Wages are 35 per cent more than the minimum: the monthly package (including social security contributions, free breakfast, a free health clinic and counseling, a transport allowance) starts at 10,480 Sir Lankan Rupees, which is about £58 (teachers here earn about £36 per month). Walking round the factory floor, instead of the endless monotonous production 'lines' there are 'cells', each with 24 members, who take it in turns to be cutters, machinists, packers, thus avoiding boredom. Pregnant women, who wear white scarves for easy identification, are given lighter work loads, special food and 84 days’ paid maternity leave. There are three employees with disabilities (M&S started an initiative to employ disabled people in Asia in 2004). There is no one here under the age of 16.
All workers have a view of palm trees and the natural lake with its lily pads, flocks of pelicans and the mountains beyond What I found incredible was that whereas in West we might moan about having to recycle, about not flying abroad on holiday, the people I meet in Sri Lanka, at the sharp end of climate change, are committed to helping solve a problem they didn’t even create. Factory worker Sudhammika Herath, 27, says she finds working in the eco factory 'less hot, much more cheerful. And I take what I learn here home: I recycle, I never waste water'. When I tell Krishan Hundal, head of technology for clothing, home and beauty and who is giving me a guided tour, that it all seems too good to be true, and ask how on Earth such practices can be economical, he explains that 'Plan A, 22 months in, is cost neutral: we put money in the budget to pay for it but we just haven’t used it. 'There is less waste, because quality is second to none; we retain our highly skilled staff, and there is less absenteeism, because people feel part of something, that the business belongs to them, that we care'.
Marks & Spencer basque, made in the Thurulie factory, is £29.50 If it makes such sound economic sense, why don’t more brands follow suit? 'Already, others are interested. The factory has just been visited by Unilever, and by several Chinese firms. But, yes, the majority of brands don’t care: they think in the short term, aren’t overly concerned about quality.' M&S uses two other eco factories. The second, about an hour’s drive away, which makes casual clothing, has just been converted to green, and is the first in the world to receive the top-level certification for energy efficiency and overall environmental impact awarded by the US Green Building Council. A third has just opened in Westbridge, Wales, producing furniture. When I ask Krishan Hundal how he can know that the remaining factories around the world come up to scratch if not in a green sense at least in the way they treat workers he says simply, 'We don’t sub-contract. We have 24 full-time Ethical Compliance Managers whose job it is to inspect the factories that work with us. We know every aspect of our supply chain.' M&S produces a guide to best practice in 14 languages, shares knowledge and if a factory does fall short 'we stick around and help,' says Krishan Hundal. 'We give them a final warning. We don’t cut and run.'
When I point out that many High Street brands at the bottom end of the market often say they share production lines with M&S, he says this is just not true: 'Less than 1 per cent of our factories are used by other labels.' But I am worried that the devastating effects of the current economic downturn – last week, M&S’s sales figures made gloomy reading: in the period April to September 2008, adjusted profit before tax was £297.8m, 34 per cent less than in the same period last year – will push the environment to the bottom of the agenda of even the most caring companies. When I put this point to Stuart Rose at the end of last week, he assured me that, 'Plan A remains an absolute a priority - it’s an integral part of the way we do business. It might be a challenging time in the economy but Plan A makes us think about new ways of working. We know customers expect us to take a lead on ethical and environmental issues, and we will continue to do so.'
Left, bra, £19.50 and knickers, £9.50, and right, basque, £29.50. The Plan A collection will hit M&S stores in a couple of weeks In these difficult times, won’t customers, especially mums strapped for cash, still scuttle to Primark? I conducted a quick vox pop in the Oxford Street flagship store the other week, and not a single shopper could tell me what on earth M&S’s Plan A was all about. Do British shoppers really care about the environment and the lives of women and children they have never even met? I really wish they could meet the young women who sew their bras and their children’s clothes and their husbands’ chinos, look them in the eye, and tell them their lives don’t matter. As Krishan Hundal points out, 'Basically, we can sleep at night. And our shoppers can sleep at night, too.'
Read more: http://www.dailymail.co.uk/femail/article-1084266/As-M-S-goes-ecolingerie-fashion-director-checks-green-new-factory-Sri-Lanka.html#ixzz1RzhXqFZi
Stop labor rights violations in the apparel sector of Sri Lanka and comply with ILO standards to protect US GSP
-Trade Union Confederation (July 02, 2010, Colombo - Lanka Polity) The US government has accepted a petition to
review the US GSP status enjoyed by Sri Lanka. The American Federation of Labour and Congress of Industrial Organisations (AFL-CIO) filed the petition. Sri Lanka is now at the brink of losing both EU and US GSP regimes. The Republic of Maldives lost its US GSP due to such complaints at the beginning of this millennium. The TUC wishes to state that the US GSP complaint accepted this week by the US government is a direct result of poor labour conditions and non-compliance with international labour standards of the ILO especially by the ap parel sector employers and the government of Sri Lanka. It draws attention to poor enforcement of labour laws in Export Processing Zones and the apparel sector, restrictions to form union federations consisting of public-private sectors, etc.. The AFL-CIO submitted the complaint to the US government as all efforts of local unions to address issues with Sri Lankan labour authorities failed despite repeated attempts. The complaint could have been avoided if local labour authorities discharged their duties effectively and impartially. The AFL-CIO complaint is inundated with solid and verifiable evidence relating to a plethora of violations of labour standards i.e. restrictions on freedom of association and collective bargaining, anti-union discrimination, sever exploitation, non enforcement of labour laws impartially etc.. in the Sri Lankan apparel sector. It is no more possible to sweep these issues under the carpet or cover them with expensive fake PR campaigns such as “garments without guilt”. The pathetic labour situation in the apparel sector is now an open secret. All cases against Sri Lanka, of the last two decades before the ILO quasijudicial body based in Geneva, are exclusively on the Sri Lankan apparel sector or involving apparel sector organisations. These international body findings have exposed the violations of rights and exploitations in the apparel industry. It is shocking to note that some of Sri Lanka’s top apparel exporting companies stand accused of serious workers’ rights violations in the complaint. The complaint exposes the duplicity of these apparel conglomerates. A key factor raised
in the AFL-CIO complaint is Sri Lanka’s non-compliance with the recommendations of the ILO quasi-judicial body’s decision on the restriction of the right to strike. This issue was sparked before the Geneva based ILO body due to irresponsible actions of an apparel sector organisation in 2006. The ILO held the joint apparel body’s court intervention was a violation of international labour standards. These developments cast serious doubts on the fake “garments without guilt” campaign. TRADE UNION CONFEDERATION (TUC) The TUC notes, the US government prior to accepting the AFL-CIO complaint held extensive highlevel consultations with government representatives, trade unions and apparel sector employer organisations over the last 18 months. Therefore, the decision to conduct the review is not ad hoc. It’s based on credible and verifiable evidence presented. The TUC considers that the time has now come for all stakeholders in the labour sector to accept facts as they are and engage them with a view to positively improve realistic ground situations. The TUC strongly urges all apparel sector employers to recognise trade unions, stop anti-union discriminations and respect ILO principles on Freedom of Association and Collective Bargaining. The TUC strongly believes that as a nation we can overcome the challenge of the AFLCIO petition only if employers, trade unions and the government are committed to work together and present a joint position before the US authorities. There ought to be a constructive dialogue on the issues raised in the petition among the relevant stakeholders and consensus needs to be reached with a view to making positive and progressive changes in the workers’ rights situation. The TUC is willing to support Sri Lanka’s position in such an event before the US government. The TUC hopes the government will accept the support offered by it to overcome the current situation arising from the US GSP review. Therefore, the TUC urges the government to begin immediately a genuine and constructive process of engagement of relevant issues in order to put things in order and save the US GSP.
Sri Lankan garment industry struggles to attract women workers
By Labour Rights team As the Sri Lanka garment industry launches a multi million rupee campaign to attract female workers, employees within the industry continue to report exploitative wages, forced overtime and suppression of union rights. Sri Lanka’s garment industry is the nation’s biggest export earner, reporting $3.5 billion USD profits for 2010. The Sri Lankan government has projected this profit to increase by up to $5 billion USD in the next 5 years. However, reaching this target means that the sector must attract thousands of additional workers. According to the Joint Apparel Association Forum (JAAF) chairman, Mr Sukumaran, the industry has already turned away orders because it doesn’t have enough workers. In IPS news reports, the JAAF and garment firm executives claim that the industry is struggling to bring in more women workers merely because it suffers from a “bad image problem”. To combat this, they are preparing to spend 55 million rupee ($492,061.24 AUD) to “improve the image of the female garment worker”. According to Sriya Ahangamage from advocacy organisation The Women’s Centre, it is the reality of the garment industry, rather than its image, that is the problem. Sriya believes that young women join the garment sector because there are so few other jobs available. Sriya reports that workers often have to work 7 days a week for wages as little as 10,00012,000 a month (about AUD $90-$107), whereas government data indicates that a family need at least 39,000 rupee (about $350 AUD) a month to provide for basic household expenses. Anton Marcus, convener of the Free Trade Zones Workers Union, points to recent studies which demonstrate that many women garment workers can’t afford decent meals and suffer from malnutrition. According to Sriya, for all these reasons it is not uncommon for women to leave the garment sector and seek jobs as domestic workers in the Middle East. Not surprisingly, Sri Lankan garment workers have been at forefront of the Asia wide campaign for decent wages. Sri Lankan workers and their unions recently organised a tribunal in Sri Lanka’s premier Free Trade Zone area, Katunayake, under the heading: “Minimum Living Wage and decent working conditions as fundamental Human Rights”. The tribunal involved a panel of international judges, aimed at redressing the lack of decent labour conditions in the garment industry in Sri Lanka. Hopefully some of their findings might assist the Sri Lankan garment industry in making changes that really will attract more women to the sector. You can leave a message to support a living wage for Sri Lankan workers today.
Nappies 14-16? Porter's 5 forces insight -Intensity of competition amongst incumbents -Bargaining power of suppliers and buyers - Threat from substitutes and new entrants
Spectrum of competition-monopoly to perfect competition -Herfindahl-Hirschman index measure of intensity -strategies for minimizing intensity of competition
Product and brand differentiation is a key strategy -Perceptual mapping technique -Using perceptual maps for positioning products and brands
Mnemonic 5
