Fairtrade: Export strategy for SL?

Exports decline by 5.8% to $ 7.3 b from Jan-Sept 2012
Industrial exports decline by 6.9% and agriculture by 8.2%

Exports crashing
Sri Lanka is feeling the heat from the downward trend in the global economy and the withdrawal of GSP+, with overall exports declining by 5.8% to $7.3 billion in the first nine months, the apparel business declining by 9.2% in September, and overall industrial exports crashing at 11.6%.
This is worrying given that Sri Lankan exports have been on the decline in an overall context since the month of January 2012. Whilst one can take solace that the global economic downturn is impacting Sri Lanka’s international trade, the fact of the matter is that if a country’s total exports are less than two per cent of global exports, this impact must be marginal.

Whilst this information calls for reforms on export policy with new markets and new marketing strategies, a new report coming in has revealed that there are many product categories in Sri Lanka that can command a high price based on the principle of dialogue, respect, and greater equity in international trade. This is also termed Fairtrade and I feel there is some merit for us to pursue this agenda based on the good work the private and public sector has already done.
SLDF 2012 and Fairtrade?
Last week whilst watching the Craft Festival of the Sri Lanka Design Festival 2012, the thought of Sri Lanka driving a Fairtrade proposition became clearer given that I saw how artisans from distant Mullaitivu, Jaffna and Mannar were responding to the new designs that were being driven on the new product development side, and from a demand chain perspective the merchandise was attracting a better price globally on the ethos of alleviating poverty, which is essentially the basic fundamentals of the Fairtrade dialogue.
If I am to quote a definition, Fairtrade means better prices for merchandise due to decent working conditions, local sustainability and fair terms of trade for fairness. This will also mean companies having to pay higher prices for goods purchased (which are never lower than the market price), which addresses the injustice of conventional trade which is essential to what Sri Lanka Design is doing in Sri Lanka.
This concept is interesting, given that Fairtrade label sales last year crossed the two billion dollar mark at a growth of 43%, which means that there is a group of consumers who continue their behaviour of purchasing products based on a certain value system. This is exactly what we saw as an outcome of the Sri Lanka Design Festival.

SL is right there
If I am to highlight some work that Sri Lanka has done on this line, a case in point is the apparel industry of Sri Lanka that was born in the 1980s and was just contract manufacturers and some even used to refer to the industry as tailors, but today, with some strategic thinking by the Industry, it has given leadership to the world by making Sri Lanka the fashion apparel of the world for ethically manufactured clothing that promotes decent working conditions, local sustainability, and fair terms of trade for fairness.
This has given teeth to the industry in competing with price-savvy merchandise coming in from Cambodia, China, and Bangladesh. Today this noble industry is targeting five billion dollars in export revenue by making Sri Lanka an apparel hub in Asia for R&D and technology sharing for fast fashion.
Ceylon Tea is slowly but surely taking the same route with the recent award of Sri Lanka being the first ozone friendly certified tea producing nation. From where it was when the plantation industry was nationalised in the 1970s under the baton of the government, the industry broke away from the shackles of the London auction system and today, the Colombo Auctions command the highest values for tea globally with value addition tea at almost 43%.
Ceylon Tea has also taken the high ground with some focused decisions on conforming to global standards on MRL levels and has gone further by developing a new standard for tea that has resulted in Ceylon Tea being the first certified ozone friendly tea globally, which no other tea producer has received. This has also resulted in the industry fighting for decent working conditions, local sustainability, and fair terms of trade for fairness, which means we are on track for a Fairtrade badge soon.
Fairtrade minimum price?
Given the above development, if I may throw more light to this concept of Fairtrade, there is a ethos of minimum price in this structure, which is the lowest price that a buyer can pay for products under this label based on a consultative process that includes the market dynamics of supply and demand at a moment in time.
However, a point to note is that currently only certain product ranges can go under this umbrella but the system is open for consultation on any new categories provided that its values can be adhered to, which is interesting.
The current product portfolio includes bananas, fruit and vegetables, tea, juices, nuts/oil seed, honey, cut flowers, ornamental plants, and spices, to name a few, but as I mentioned many others can take this proposition if the business model can be shaped to the procedures.
Maybe the Divulapitiya weavers who were showcased at the 2012 Sri Lanka Design Festival can be test marketed on this concept and rolled out globally so that the best practice can then be linked to other product sectors in the Sri Lankan export basket.

Fairtrade premium?
There is also an interesting rule on Fairtrade that can actually be attractive to Sri Lankan exporters. It’s called Fairtrade Premium. What this means is that one agrees to pay money on top of the minimum price point that has to be directed to such causes of social, environmental, or economic developments of the community which produces the merchandise.
This is a ideal fit for the ethically manufactured handloom industry of Sri Lanka where a pilot project is currently in progress in Maruthumune and being rolled out to other key towns in the north and east of Sri Lanka, under the ‘Peace Collection’ brand. May be the ‘Ethical Eco Label’ in the apparel industry can be modelled and launched globally so that any organisation’s merchandise that is staged at SLDF can find a global market on this badge.

How Fairtrade works
Once a producer meets the requirements as stipulated under the Fairtrade certification, one can agree to a licence agreement as per the Fairtrade mark. Any product that comes under this umbrella can use the two concepts of ‘Fairtrade Minimum Price’ and ‘Fairtrade Premium Price’.
I would argue that Sri Lanka should test this concept given the looming double dip economic scenario and our export basket being skewed to the US and EU, apart from the other strategies that are being pursued by the export community of Sri Lanka such as perusing business under the Indo-Lanka FTA as well as APTA.

Demand for Fairtrade?
Apart from the 43% increase in sales under the Fairtrade label and its flexibility of branching out to specific positioning like ‘Garments without Guilt’ or Ozone Friendly Tea’ that Sri Lanka is already pursuing, we also see a trend in the modern trade that commands almost 60 per cent of share of wallet globally where priority space is allowed for products under this banner.
Separately we have seen many promotional opportunities that are afforded to Fairtrade label products in the traditional media of TV, radio, and press, and in the recent past the viral social media platforms have also joined the fray, which is encouraging given the penetration of these new methods of communication that are being diffused at a very strong pace.
I guess the time is right to test this opportunity that is hip in the global market place. It is all the more attractive given that the Fairtrade business model is people-centred trade that effectively reduces poverty and also improves the standard of life in the developing world.

Fairtrade and climate change
We also see that Fairtrade is continuously addressing the key issues of the world and changing its business model, which keeps the brand consumer-oriented. The latest is the inclusion of reducing energy consumption by the use of renewable energy, which Sri Lanka as a policy has agreed to be 10% of energy in the long term that adds to the argument to pursue this strategy.
Even though the Sri Lankan economy has experienced accelerated growth from a 20 billion dollar economy in the 1990s to be a 59 billion rupee economy and with some arguing that Sri Lanka’s economy should have been 100 billion dollars by now, the fact is that Sri Lanka’s development has been retarded due to the war. But one can also make the insinuation that due to the development not being so rapid, the pollution levels are reflective at a low ebb and in the UN report on climate change, we register a MtC02 emission of a low 11.5, which is the lowest in the region.
Hence it is fair to say that against the backdrop of economic engines in the Asian region like China, India, and Pakistan, Sri Lanka will emerge as a ‘less polluted country’. It is a positioning opportunity that is fast emerging for our beautiful little country in the backdrop of the apparel industry saying ‘the first Ethical Sourcing destination’ and the tea industry being painted as ‘the first Ozone Friendly Tea Nation of the world’.
Due to the strong product features like the beaches, wildlife, 2,500 year heritage, and family-oriented culture, maybe a typical positioning can be ‘Treasures of Sri Lanka’ which can be seen in the ethical way. This can be built into the Fairtrade principles of decent working conditions, local sustainability, and fair terms of trade for fairness.

Next steps for Sri Lanka
I guess the next steps for Sri Lanka can be the following:
Study the value chains of the export basket of Sri Lankan products and identify which items can best fit the Fairtrade business agenda.
Analyse if the Fairtrade label will add value to these identified product categories, not only from an export value perspective but from an economic and social agenda. Maybe some products from the ‘Divi Neguma’ one million economic units drive can fall under this mandate; the logic being that Fairtrade is all about poverty alleviation.
Maybe some quick win products can be targeted so that we understand the practical challenges when implementing the business model of Fairtrade. Thereafter it can be rolled out.
Once the test phase is completed it can be incorporated to the overall national game plan of achieving 20 billion dollars by 2020, with apparel, tea, and tourism already on route.

(The author is a Board Director of Sri Lanka Design Festival and a Director for the Government of Sri Lanka on the areas of Industrial Development, Export Trade, and Business Policy. The thoughts are strictly his personal thoughts and not the views of the organisations he serves in Sri Lanka or globally.)

EDB plays key role in promoting Lankan apparel industry

Supports the apparel industry fashion show and the seminal South Asian Apparel Leadership Forum at SLDF

Sri Lanka Design Festival (SLDF) 2012, backed by local industries and the Government, was held under the theme of ‘Locally Global,’ taking Sri Lankan design to the world as an internationally relevant yet, locally rooted industry.

The Export Development Board (EDB), the apex Government organisation for developing and promoting the export of products and services from Sri Lanka, partnered the event as a key stakeholder to promote Sri Lanka’s largest export industry – apparel. EDB embraced Sri Lanka apparel’s campaign to be the South Asian leader through two key events: the seminal South Asian Apparel Leadership Forum and the international fashion show by Sri Lankan apparel makers.
The South Asian Apparel Leadership Forum saw several global apparel leaders sitting together with Sri Lankan industry icons to discuss and decide solutions for existing problems and came up with new initiatives to place Sri Lanka at the South Asian apparel front.
For this forum, EDB brought down several apparel luminaries whose opinions and voices are extremely influential in the world. These personalities included Michelle Mone, founder of the Ultimo lingerie brand in UK, Mark Green, Vice President for Global Supply chain for PVH Corporation that leverages a diversified portfolio of brands – including Calvin Klein, Tommy Hilfiger, Van Heusen, IZOD, ARROW, and Bass, the sustainable fashion icon Jonas Eder-Hansen of the Copenhagen Fashion Summit, and Mike Todaro, AAPN’s Managing Director along with David Burnbaum – renowned apparel strategist and author of the monthly global newsletter ‘The Birnbaum Report.’
EDB Chairman and Chief Executive Janaka Ratnayake met these luminaries along with local apparel icons such as Ashroff Omar, CEO of Brandix, Mahesh Amalean, Chairman of MAS Holdings, Nikhil Hirdaramani, Director of the Hirdaramani Group, and Kumar Mirchandani, Group Director of Favourites.
“We are keen to promote the Sri Lankan apparel industry and associated industries to keep abreast of the changing trends and needs in the global market and also to promote their ground-breaking initiatives to the world. We’re proud to recognise our apparel industry as a regional visionary among exports and it’s very important for us to portray this to the world,” said Ratnayake.
The Sri Lanka apparel fashion show was also supported by EDB, and was a global platform for swimwear, lingerie, sportswear and casual-wear depicting the design, dyeing and finishing capabilities and manufacturing excellence of the local apparel industry.
SLDF was founded by Sri Lanka’s international design campus AOD (www.aod.lk), and was supported by the Ministry of Economic Development, the Export Development Board and JAAF as the key stakeholders, Sri Lanka Tourism Promotion Bureau – tourism partner, SriLankan Airlines – official airline, Mount Lavinia Hotel – official host, MAS as the main sponsor of Sri Lanka fashion and apparel awards, TradeCard – official software partner, Hellmann Worldwide Logistics – official freight and fashion logistics, and Textured Jersey – official fabric partner.
Other supporters included Coats Thread – official thread partner, MTV/MBC – electronic media partners and PrintCare – official printer.

The British Council, the Norwegian Embassy and Goethe Institut also supported SLDF as knowledge partner, cultural partner and international program partner respectively, while WGSN, JustStyle and Textile Institute/Textiles magazine promoted the festival internationally as the international media partners. SocialMidea was the official social media partner and Cheryl Gooneratne was the official hair and makeup partner for the festival this year.

South Asia Apparel Leadership Forum explores new scope, sustainable change

By Shabiya Ali Ahlam
With over 100 professionals in apparel manufacturing, supply chain services, ethical fashion, retail brands, media and opinion leaders, the South Asian Apparel Leadership Forum took place for the second consecutive year in Colombo last week.

Sustainability is sexy

Bridging the gap between what is sustainable and what is sexy, the global fashion and apparel industry has much to do in promoting what is sustainable to a consumer base that is all for design, fashion, flair, and creativity.

Sri Lanka Design Festival kicks off

I’m in sunny Sri Lanka. Sadly, I’m not poolside sipping on cocktails, but hard at work bringing you the latest from the 2012 Sri Lanka Design Festival, which began last night (15 November).

Sri Lanka’s garment industry has always differentiated itself by its sustainable and ethical credentials, and this year that focus is set to continue, with today featuring a sustainable fashion symposium, and a visit to the Hirdaramani Eco Factory.

Saturday, the Mount Lavinia Hotel will play host to the South Asian Leadership Forum. The programme will focus on speed to market as Sri Lanka becomes a fast fashion hub, not only for its own manufacturers but also for manufacturers based in India and Bangladesh looking for an easier route to Europe.

Speakers will include the heads of local manufacturers Brandix and MAS – Ashroff Omar and Mahesh Amalean.

Ultimo founder and CEO Michelle Mone will also be speaking about how to build brands, while Copenhagen Fashion Summit chairman Jonas Eder-Hansen will talk about the sustainability imperative.

Meanwhile, industry stalwart David Birnbaum is speaking, as is American Apparel Producers Network (AAPN) MD Mike Todaro, PVH’s global supply chain VP Mark Green, Coats Thread global sales chief Stephen Forte and Tradecard CEO Kurt Cavano.

Today, I also visited the Brandix Eco Factory and met with Timex to learn about their plans. Stories on these, and more, will be going up in the coming days, so please check back often.

If you’re attending the festival and want to say hi, I’m the the one that vaguely resembles an over-ripe tomato (the Sri Lankan sun has a bite).

And finally, if you have any tips on how to get rid of sunburn, please leave them in the comments.

Heritage crafts for the hotel industry

Hellmann partners Sri Lanka Design Festival 2012

Initiative heralds new technology and perspective to support Sri Lanka Apparel with logistics as a key component in becoming the regional apparel leader

Hellmann Worldwide Logistics, one of the world’s largest logistics providers, is partnering SLDF 2012 to launch its pioneering technology and initiatives in fashion logistics this November. Hellmann, already with a strong global presence within the fashion logistics industry, is proud to support SLDF that brings down a large number of apparel luminaries participating in SLDF.

Managing Director of Hellmann Worldwide Logistics in Sri Lanka, Tania Polonnowita said: “This is the second consecutive year we’re partnering SLDF. We’re fully onboard to globally promote the apparel and fashion industries in Sri Lanka that we work so closely with.
“With the inaugural logistics session this year at the sustainable fashion symposium, we also hope to show the global apparel sector why Hellmann is the leader in fashion logistics, through our groundbreaking initiatives.”
Hellmann has invited several professionals in fashion logistics including Jil Hellmann Regouby, BDM – fashion at Hellmann worldwide logistics. At this forum, Hellmann will be leading a discussion on ‘Green conscience, the new imperative for supply chain integration’ and a panel discussion on ‘Speed vs. Sustainability: the role of logistics’.
Hellmann Worldwide Logistics is an expert at anticipating the future needs of the global market place. With huge investments in sophisticated logistical solutions for Sri Lanka’s creative led industries such as fashion and apparel, Hellmann’s contribution to the growth of the industry and global network is tremendous. Hellmann’s association with the Sri Lanka Design Festival furthers their contribution to the international growth.
Hellmann Sri Lanka is a joint venture of Hemas Holdings PLC and Hellmann Worldwide GmbH. Hellmann offers tailor-made solutions that answer to the needs of customers around the world. As a leading international provider of integrated logistics solutions, Hellmann is considered a vital link between industries and trade throughout the world.
The global logistics network of Hellmann Worldwide Logistics operates in 443 branches in 157 countries and employs in excess of 16,500 dedicated people to serve our customers worldwide. www.hellmann.net
To register/online tickets for SLDF and more information contact www.srilankadesignfestival.com or the festival secretariat +94 11 5737303 at AOD design campus, 29, Lauries Road, Colombo 4 between 8.30 a.m. to 5.00 p.m., Monday to Saturday.

Kurt Kavano to speak on ‘Global Retail Trends & Strategies’ at SLDF’s South Asian Apparel Leadership Forum

TradeCard Founder and Chairman Kurt Cavano, listed among World Trade Magazines world’s 50 most influential people, is a key personality whose vision and talks are much anticipated and he is a keen supporter of Sri Lanka’s vision to be South Asia’s apparel hub.

TradeCard Founder and Chairman Kurt Cavano, who brought his New York business to Sri Lanka seven years ago, is geared to expand and grow his business within the country to hold significantly more employees here in Colombo in the near future.
“TradeCard works with many Sri Lankan apparel makers through international brands like Levi’s,” said Cavano on his company’s relationship with Sri Lanka. Believing that the region holds unbelievable opportunities for the world and for the company, Cavano won the admiration of local apparel makers by urging Sri Lanka apparel not to pursue a cheap needle approach, but to evolve with quality and sustainability – attributes that have become synonymous with them.
“A lot of change happening here is having a really incredible effect in the world,” he asserted at 2011’s forum. “…It creates an unbelievable opportunity for Sri Lanka. This is not to say what’s happening isn’t. TradeCard is a key supporter of SDLF’s campaign to position Sri Lanka at the global ethical fashion forefront and sees the island as an essential supply base with the movement of the international apparel market towards South Asia.”
TradeCard is the leading provider of cloud-based supply chain collaboration solutions that synchronise financial transactions with physical events in the global supply chain. Its services and solutions enable customers to improve margins and enhance growth, with extra-organisational supply chain visibility and superior supply chain agility. This has earned TradeCard an impressive line of over 10,000 customers in apparel, footwear and consumer goods including Columbia Sportswear, Rite Aid and Wolverine Worldwide in more than 75 countries.
TradeCard is a leading supply chain collaboration platform that improves margin, cash flow and visibility for over 10,000 buyers, sellers and service providers. Global ‘feet on the street’ experts providing support in 78+ countries and 32 languages. A global network of buyers, suppliers and service providers that collaborate electronically and generate mutual value. A network of alliance partners: inspection services, consultants, technology providers, banks – that contribute expertise and bring innovation to members.
To obtain information on the South Asian Apparel Leadership Forum contact www.srilankadesignfestival.com or the festival secretariat +94 11 5737303 at AOD design campus, 29, Lauries Road, Colombo 4 between 8:30 a.m. and 5 p.m. Monday to Saturday.

Sri Lanka Design Festival 2012 Promotes Sri Lanka as the South Asian Education Hub

British Council Brings Down 4 top Design Academics from the UK to Speak Amongst Other Top International Opinion Leader and Designers at SLDF
Marking a turning point in Sri Lanka’s mission to be South Asia’s education hub, Sri Lanka Design Festival 2012 will host the inaugural ‘Design Education in the 21st Century’ this November. Organized jointly by Sri Lanka’s international design campus AOD and the centre for UK-Sri Lanka education correlationsBritish Council, the forum brings down some of the most impressive names in global design education.

Some of these names include design icons from the UK; Prof. Jane Rapley – Dean of Fashion and Textiles, Central Saint Martin’s, Prof. Wendy Dagworthy – Head, School of Fashion and Textile, Royal College of Art, Patrick Gotellier – Head of Department of Design – University College Falmouth and Prof. Steven Kyffin – Dean of Northumbria University School of Design UK. These renowned educationalists will get together to discuss the building blocks in creating a future designer: Specific education, knowledge, skills, behaviours and characteristics; a perspective from UK and Sri Lanka that would enrich specific qualities of design education in South Asia and Sri Lanka.
The UK, known as the global design hub, is the home to some of the top educationalists who helped shape Britain’s winning design industries by educating, training and helping young minds to become competent designers who can impact an entire world. British Council, as the centre for UK-Sri Lanka correlations, especially in learning and language, is keen to facilitate the sharing of this design knowledge with Sri Lanka.
Tony Reilly, the country director for British Council Sri Lanka said “We see tremendous potential in Sri Lankan design and the important role of education in moulding Lankan design talent to meet global standards and requirements. For this, we want to bring down the very best from the world’s best design education institutes in the UK together with experts from this region and formulate the best practices for design education in South Asia. This would be the first step in establishing this island as a hub for design education.”
The forum invites registrations from educationalists, designers, media, NGOs, Government education, Government innovation and research funders along with Industry Human Resource Managers, design suppliers, academic researchers of design, Academic Teachers of design, students from undergraduate to post graduate research level (Registration is Free but prior registration is required)
For more information on the forum, contact British Council, Amina M MRuwanpathirana on+94 114 521 542 or email amina.ruwanpathirana@britishcouncil.org. To register/online tickets for SLDF and more information contact www.srilankadesignfestival.com or the festival secretariat +94 11 5737303 at AOD design campus, 29, Lauries Road, Colombo 4 between 8.30 am – 5.00 pm Monday – Saturday.

SLDF 2012 Craft Exhibition presents products made from heritage crafts for hotel industry

Hoteliers, architects and interior designers are invited to attend a preview of products designed and developed for the hotel industry using craft at an exhibition presented in partnership with Sri Lanka Tourism.

The exhibition opens on the evening of 15 November featuring design integrated craft products from across the island, highlighting the efforts of over 500 local artisans through interior, hotel ware and textile products, and will remain open till 18 November at the Mount Lavinia Hotel.
The opening evening will also feature a craft fashion show featuring products like beach wraps, shawls and fashion collections made out of heritage crafts that can be sold in hotel boutiques and promoted amongst tourists who appreciate authentic artisan products.
The exhibition will be especially beneficial for hoteliers, architects and interior designers as it shows methods and product possibilities for hotel interiors and product for boutiques.
The collections consist of designer products from Matale consisting of lacquer work, hemp, brassware, Dumbara upholstery, coir flooring and carpets, batik textiles, a wide collection of textiles from the handloom weaving village of Gampaha and Galle stoneware.
The products showcased will provide creative solutions and inspiration that will create a new dimension in the local hotel industry and associated interiors carrying the message ‘Sri Lanka’. The showcase also includes home ware, toiletries, basketry, and other specialty products by the north and east of the country involving over 150 female artisans who are rebuilding in a post-war era.
The handloom weaving project in Gampaha District’s Divulapitiya Division will present a specially-designed collection of hand-woven bed linens, table linen, and textiles. Architects will see possibilities of even designing their own textiles for hospitality and other interiors. Success stories of hotels and projects that have already used these products following last year’s exhibition will also be a special feature at the exhibition.
The exhibition promises to be a rewarding experience and SLDF invites hotel industry professionals, architects and interior designers to become a part of the event on 15 November. For more information contact or visit the SLDF organisers: AOD Design Campus, 29, Lauries Road, Colombo 4, between 8:30 a.m. and 5 p.m., Monday to Saturday. Telephone +94115737303 or visit www.srilankadesignfestival.com for online tickets.