By: Staff Writer

December 31, Colombo (LNW): Sri Lanka’s apparel sector, a cornerstone of the country’s export economy, has experienced a mix of achievements and challenges in 2024.

Renowned globally for its commitment to ethical production and sustainable practices, the industry has seen fluctuating export revenues, reflecting both global economic uncertainties and shifting market dynamics.

This analysis delves into the year’s key trends, highlighting the sector’s resilience and areas for improvement.

In November 2024, apparel exports grew marginally by 1% year-on-year (YoY) to US $375 million. This marked the lowest monthly export figure since April’s $293 million and was notably below October’s $397 million.

In contrast, August saw exports surge to $511.13 million—the first time in two years that monthly revenues surpassed the $500 million mark. Despite these fluctuations, cumulative apparel exports during the first nine months of 2024 grew by 5.27% to $4.33 billion.

However, the first half of 2024 recorded a 1.4% decline in garment exports, totaling $2.2 billion compared to the same period in 2023.

The industry remains vital to Sri Lanka’s economy, with the domestic apparel market projected to generate $1.7 billion in revenue by the end of 2024.

This market is expected to expand at an annual growth rate of 2.14% from 2024 to 2029. Sri Lanka continues to gain recognition for its sustainable and ethical apparel production practices, home to pioneering initiatives like the world’s first eco-friendly “Green Garment Factory.

 Growing global demand for sustainable fashion presents opportunities for the country’s apparel manufacturers to maintain their competitive edge.

Market-specific performance has been mixed. In November, exports to the USA increased by 2.05% to $144 million, while exports to the EU (excluding the UK) fell by 8.6% to $115.7 million.

Exports to the UK, however, rose by 4.74% to $60.6 million, and exports to other markets recorded a significant 17.31% increase to $64.6 million.

Compared to the industry’s benchmark year of 2019, November exports showed declines across most major markets, with drops of 18% overall, including a 31% decrease to the USA and 9.4% to the EU.

However, diversification efforts have borne fruit, as exports to other markets grew by 6%. Year-to-date analysis reveals positive YoY growth across all major markets except the EU.

Exports to the USA rose by 6.25% to $1.73 billion, to the UK by 9.37% to $626 million, and to other countries by 9.4% to $702.5 million.

Despite this, total exports in the first nine months of 2024 remained 10.5% lower than in 2019, emphasizing the need for strategic initiatives to reclaim lost ground.

As Sri Lanka’s apparel sector navigates a challenging global landscape, its strengths in sustainability and market diversification remain crucial for future growth.

By: Staff Writer

December 31, Colombo (LNW): A special audit by the National Audit Office (NAO) has revealed significant irregularities in Sri Lanka’s controversial electric vehicle (EV) import scheme for migrant workers.

The program, initiated by the Foreign Employment Ministry, was designed to allow Sri Lankan expatriates to import EVs based on their foreign remittances.

 However, the audit exposed extensive misuse, with just two out of 31 registered institutions controlling 64% of the issued permits.

According to the NAO report, Auto Capital Investment (Pvt) Ltd and Overland Auto Mobile facilitated 335 and 305 permits, respectively, amounting to 640 out of the total.

Despite 510 licensees importing EVs under the scheme by June 30, only 375 vehicles were registered with the Department of Motor Traffic (DMT) as of July 9. Of these, 84 vehicles were transferred to third parties, violating the scheme’s intent.

The audit also highlighted that only 28.6% of the permit holders had registered with the Sri Lanka Bureau of Foreign Employment, a basic requirement of the scheme.

 Among the categories of migrant workers who benefited, seafarers topped the list with 164 permits, followed by managers (150) and directors (96). Others included engineers (78), officers (61), consultants (24), three doctors, and even an international cricket umpire.

The parliamentary Committee on Ways and Means had earlier uncovered that 119 electric cars, valued at nearly Rs. 1,200 million, were imported by misusing permits. Shockingly, a single importer was responsible for 75 of these vehicles.

The scheme, initially intended to support migrant workers, was instead exploited by vehicle importers in collaboration with corrupt officials. They used the permits to bring luxury EVs into Sri Lanka, bypassing the program’s original purpose, and sold them on the local market.

The scandal extended to policy mismanagement. Initially, the government had sought advice from global manufacturers to ensure the scheme’s sustainability.

However, subsequent changes removed key safeguards, such as manufacturer warranties and price caps, enabling the importation of ultra-luxury vehicles. This policy shift disproportionately benefited wealthy individuals, further undermining the program’s integrity.

The findings have sparked outrage. Auditor General W.P.C. Wickremaratne has submitted a detailed report to parliament, with further updates expected after the November 2024 general elections.

The Committee on Ways and Means has directed authorities to take immediate action against those involved, including complicit state officials.

The scandal has prompted calls for tighter regulations. New guidelines were issued by the previous government to manage the scheme, capping vehicle values at $25,000 to prevent misuse. However, motor traders have lamented the delayed response, likening it to “shutting the stable door after the horse has bolted.”

As investigations continue, the fraudulent activity serves as a stark reminder of how programs meant to benefit vulnerable groups can be hijacked for profit. Ensuring transparency and accountability in such initiatives is critical to preventing similar abuses in the future.

By: Staff Writer

December 31, Colombo (LNW): Hambantota International Port (HIP), operated by the Hambantota International Port Group (HIPG), is making strides to enhance its container operations and emerge as a central hub in regional maritime trade.

The port’s new focus on the relay cargo market, alongside its existing transshipment operations, aligns with Sri Lanka’s ambition to handle 10 million TEUs between 2025 and 2026.

Relay cargo, which involves transferring containers between vessels of the same carrier at an intermediate port, optimizes shipping routes and reduces transit times.

Unlike transshipment—where containers are moved between different carriers—relay cargo offers efficiency gains for shipping lines. HIP’s entry into this market is supported by its strategic location on Sri Lanka’s southern coast, at the crossroads of major maritime routes.

HIPG CEO Wilson Qu emphasized the port’s unique geographical advantage and its ability to attract customers who may not have previously considered Sri Lanka a viable option. He highlighted HIPG’s commitment to competitive rates, exceptional service, and continuous infrastructure investments as key drivers of its growth strategy.

A significant part of the port’s plan involves the introduction of advanced crane technology in February 2025.

This upgrade will enable HIP to handle up to one million twenty-foot equivalent units (TEUs) annually, further enhancing its operational capacity. Additionally, the port is exploring feeder operations with Colombo to expand its service offerings.

HIPG’s “seaside strategy” targets untapped markets and aims to boost connectivity across the region. A particular focus is on transshipment opportunities from BIMSTEC countries, where over 70% of containerized cargo bypasses Sri Lankan ports.

By improving operational efficiency and launching aggressive marketing campaigns, HIP aims to capture a significant share of this market.

On the “landside,” HIPG is developing an industrial zone to generate gateway cargo and attract shipping liners.

The industrial zone recently secured its first investment—a sponge mattress factory targeting export markets in the U.S., Europe, and Canada.

 This initiative is expected to create employment opportunities and foster collaborations between local entrepreneurs and international businesses. Additional agreements for industrial investments are anticipated in 2025.

The industrial zone is a critical component of HIPG’s strategy to move beyond its geographic limitations. It complements the relay cargo initiative by attracting industries that will generate consistent export volumes, thereby driving sustained growth for the port.

Wilson Qu reiterated that HIP’s expansion efforts represent a significant opportunity for Sri Lanka to solidify its position as a competitive player in global logistics. By leveraging its location, innovative operations, and targeted investments, Hambantota International Port aims to become a preferred choice for shipping lines and industrial investors in the region.

Through its combined seaside and landside strategies, HIP is positioning itself as a comprehensive logistics hub capable of transforming Sri Lanka’s maritime industry and contributing to the nation’s broader economic goals.

December 31, Colombo (LNW): Emirates airline is set to enhance its services between Colombo and Dubai with the launch of an additional scheduled flight, beginning January 02, 2025.

This new addition marks a significant increase in seat capacity and reflects the airline’s commitment to supporting Sri Lanka’s ambitious goals to boost tourism in the coming year.

The new flight, designated as EK654/655, will operate six times a week, offering a 30 per cent increase in the total seat capacity on this popular route.

This expanded service is expected to play a crucial role in Sri Lanka’s plans to attract more international tourists in 2025, contributing to the country’s recovery and growth in the travel sector.

The flight will depart from Dubai International Airport (DXB) every day except Wednesdays, with the first leg, EK654, leaving Dubai in the evening and arriving in Colombo the following morning.

From 1st April 2025, an additional flight will be introduced on Wednesdays, providing a seventh weekly service on this route.

The added flight can accommodate up to 360 passengers, offering a mix of luxurious travel options, including eight First Class suites, 42 Business Class seats, and 310 Economy Class seats.

This spacious configuration is designed to meet the demands of both leisure and business travellers, further strengthening Emirates’ position as a key player in connecting Sri Lanka with the world.

Since its first flight to Sri Lanka in April 1986, Emirates has become a crucial link for travellers flying to and from Colombo, having carried more than 12 million passengers over the years.