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Factories closing after GSP loss

25 January 2013 10:44 pm - 61     - {{hitsCtrl.values.hits}}


Sri Lanka has begun to feel the effects of the loss of the GSP plus facility, after the closure of number of factories and reduction of export orders, Daily Mirror learns.

The Generalized System of Preferences (GSP+) Plus is a mechanism that gives preferential access to the markets in the European Union for exports from number of countries.  

However, the European Union excluded Sri Lanka from the list of beneficiary countries on February 16, 2010 due to the non-implementations of certain good governance regulations.  According to the European Union, the GSP Plus was introduced as a mechanism to encourage good governance and strengthen democracy in the world.

After three years, several factories have been closed down due to the inability to maintain their export markets in the European Union.

Organizing Secretary of Inter Company Employees Union B.I. Abdeen told Daily Mirror that 2000 jobs of direct employment had been lost due to the closure of two factories on January 2, 2013 alone.

“Crystal Sweater Lanka Pvt. Ltd is one such company that ceased its operations on January 2,  after a public announcement in newspapers.
“The company has cited the inability to compete with countries such as Bangladesh that enjoy the GSP Plus benefit to access markets in Europe.
“This is a company with 1100 employees. They put up a newspaper advertisement on December 22.  They cannot compete with countries such as Vietnam and Bangladesh enjoying preferential duty free access to Europe,” he said.  

Besides, Firefox Private Ltd, a Chinese company, also shut down its operations in Wattala area. In total 400 persons lost employment at this firm.

The issue was raised in Parliament this week by JVP parliamentary group leader Anura Kumara Dissanayake and UNP MP Dayasiri Jayasekara.

In response to a question by MP Jayasekara, Deputy Finance Minister Sarath Amunugama said the government had given financial assistance of Rs.2000 million to revamp operations of four apparel companies.  However, he said that three of these companies had ceased operation now.

Raising a supplementary question, Mr. Jayasekara said that the government did not listen to European Union to   ensure good governance in the country, and it was an adamant approach.

“In a pompous approach, the government disregarded recommendations by European Union.  Now, factories have been closed leaving their employees in the lurch,” he said.

He said that he was aware of a company that ended operation of its factories, resulting in the loss of 2000 employees.

Dr. Amunugama replied, “The market opportunities in the United States and European Union have shrunk today due to economic recession. Despite that, properly managed companies have succeeded. There are companies doing well,” he said.(Kelum Bandara)

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  Comments - 61

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  • Yuri Sunday, 27 January 2013 05:53 AM

    By the way Gov can reduce the age limit to Saudi Arabia from 25 to 16, most workers can work in Saudi houses

    LBJ Saturday, 26 January 2013 03:54 PM

    You are right on!

    LBJ Saturday, 26 January 2013 04:18 PM

    Yes, tell that Moron Modawansa (MM) to talk to his friends the Chinese to give SL GSP facility to export garments to China.

    Nalaka Gamage Saturday, 26 January 2013 04:57 PM

    Talking on China, China relies heavily on U.S trade. Currently U.S has imposed restriction on Chinese products because of U.S recession. This has led to slowdown world economies which is adversely affecting srugling economies like ours. Country needs to look at other avenues rather than bragging about

    rajaraja Saturday, 26 January 2013 05:09 PM

    low quality is due to lack of finance

    krishan Saturday, 26 January 2013 05:26 PM

    Now we can export brides to China...............

    Curious Saturday, 26 January 2013 06:20 PM

    One of our main reason is "Cost production" comparing with other nations even though our quality is better. For an example how many days for a year we really work ?

    jokers Sunday, 27 January 2013 12:55 AM

    Not a bunch, the whole lot has to go to kindergarten!!!.

    Dissanayaka Sunday, 27 January 2013 02:44 AM

    I'm sure most of people here dont even know about the Industry and having wore coloured glasses.(I work for Leading top apparel company).We have opened factories in Kilinochchi & Mihintale and we are expanding further. Remove your colored glasses.These factories are closed due to improper management and they sing "GSP" song.How MAS & Brandix survive then? Our Labour cost is becoming high & BD, vietnam cost is low.its not GSP alone! Cinha labour cost is rising in China and they moved one of thier factories to SL! Dont talk nonsense like you know everything with political agendas!

    lenin Sunday, 27 January 2013 02:56 AM

    ss reply
    Migration is the best option.This is a failed state

    Mimi Sunday, 27 January 2013 03:16 AM

    Don't worry, Gota has said we have China.

    Perhaps now his dear friend China will stop their manufacturing and give our garment business a chance.

    J P Rajan Sunday, 27 January 2013 04:28 AM

    Do not worry there is hope in the horizon... that is Mahinda Chintanaya!!!

    Calistus Jayatilleke Sunday, 27 January 2013 05:05 AM

    Wonder where are those Modawansas who boasted that Sri Lanka has weathered the worldwide recession whilst the Europeans suffered and that we do not need western enforced GSPs etc. for our survival. Let those modayas now come up with solutions to overcome these issues rather than crying about western and imperialist conspiracies.

    Saman Sunday, 27 January 2013 05:34 AM

    We should export Maharaja clan to China to work and bring in Foreign exchange.

    Yuri Sunday, 27 January 2013 05:52 AM

    Arrogance and Stubborness ended LTTE Brother Gang will be Next !

    Banu Saturday, 26 January 2013 03:47 PM

    What an ignorant idiotic statement. This is the attitude that will spell the doom of our countries future.

    Mangala Sunday, 27 January 2013 06:02 AM

    Rathmalgama, kade yanawa kiyala ochchara yanna epa..hode?

    Dhammika Sunday, 27 January 2013 06:47 AM

    Ko ara Ramalgamaya ( 1 st comment maker ) uta pissu ehemath nethnam UUU RAJAPAKSA yakek.

    lakmal Sunday, 27 January 2013 06:48 AM

    mya be it is not GSP plus , even though DM is unaware there is a economic crisis in europe , which casuses low demand for products , if DM did bit research it would find that it is same bangaladesh and other countries that manufacture colthes ..but saying that would nou suit DM agenda

    lakmal Sunday, 27 January 2013 06:50 AM

    GSP plus concessions are minimal , this already offested by currency devaliution , in case if your not aware europe is in econimic crisis with causse low demand for products

    rehan Sunday, 27 January 2013 07:05 AM

    poor us. redihodana ratak waiiiiiiiiiiiiiiiiiiii, no mahili.................

    rehan Sunday, 27 January 2013 07:08 AM

    no stitching garments only washing garments in the ME

    Fazli Sunday, 27 January 2013 07:39 AM

    Absolutely spot on !

    Dee Sunday, 27 January 2013 08:14 AM

    at this rate wonder when we will acheive this USD4000+ per capita that some private sector CEO's also bark about.

    Jan Chandra Sunday, 27 January 2013 08:39 AM

    Isn't Ranil responsible for this? Didn't he canvass against GSP + with the EU countries? He has denied the sustenance of poor workers. It is unfortunate that some people have short memories.

    V.I.S.Jayapalan poet Sunday, 27 January 2013 10:21 AM

    This will become worse after UNHCRC meeting next Geneva. .

    sena Sunday, 27 January 2013 10:22 AM

    Ask Navaneethampillai (UN) to fix the problem she has the power, of course you have to implement 13+ and send a lot of people to Jail for what they did.

    Pasel Sunday, 27 January 2013 10:51 AM

    He is gong to say if you out of job we have plenty of Chinese noodle

    man Hatton Sunday, 27 January 2013 11:05 AM

    Good Luck to Father of the Nation.

    man Hatton Sunday, 27 January 2013 11:19 AM

    Sri Lanka walking strongly in the path of starvation and famine, it's just ahead. Congrats SL govt. and people who voted for them.

    N Sakthirupan Saturday, 26 January 2013 12:01 PM

    Don't worry Chna won't let us down


    kane Saturday, 26 January 2013 04:04 AM

    The corrupt government is not bothered at all about the suffering of the maases who elected them.

    Silverhawk Saturday, 26 January 2013 04:16 AM

    Dr Amunugama is blaming this mess on the management of the closed company, what a joke. This government will never pay heed to what the citizens of the country crave for.

    ss Saturday, 26 January 2013 04:15 AM

    the educated professionals - your call to take SL to a knowledge based economy (rather than depending on these low skill ventures)

    MNM Saturday, 26 January 2013 04:25 AM

    Beginning of the END...

    Kamal Saturday, 26 January 2013 04:53 AM

    talk talk talk and take the country backward.
    we have a bunch of laughing stock in the parliament who needs to be sent to the elementary school to get their brains washed.

    Mason Saturday, 26 January 2013 05:18 AM

    This is what happens when you have small brain and big mouth.
    The government has given Rs.2000 million to apparel companies to revamp. What do they propose doing to revamp those who have lost employment.

    aneee Saturday, 26 January 2013 05:28 AM

    This is Good for Country- Again we can find Cheap labours, then low cost product, Business Benefit.

    Minister Saturday, 26 January 2013 05:53 AM

    Now more people can be brought to Colombo for demos!!

    Fair N Square Saturday, 26 January 2013 05:55 AM

    Ranil warned about this sometime back... sadly so much income lost and jobs too..

    MNA Saturday, 26 January 2013 07:57 AM

    now housemaid going to middle east will gradually increased rather than reduced.

    BOOTHAYA Saturday, 26 January 2013 08:12 AM



    Sampath Saturday, 26 January 2013 09:33 AM

    We are sure to loose more and more investors and closure of existing factories with the recent impeachment drama. The cancellation of the US GSP facility is very near... While the goons will enjoy the lamborgins's the common man will have to bear with badagini.

    Dylan Saturday, 26 January 2013 09:36 AM

    Nightmare for the SL economy.Wimal Weerawansa should take blame for this as he was one of the front runners to say that we can survive without the GSP concessions. The more he remains in the cabinet the more disaster he will bring upon our motherland.The lame comment by Dr. Amunugama clearly shows that the present government does not have capabilities to manage our economy well. Why don't they hand it over to the UNP who are the most capable party in Srilankan history !!!

    VKP Saturday, 26 January 2013 09:41 AM

    You are right. GSP+ worth 150 million US$ every year.

    rathmalgama Saturday, 26 January 2013 04:02 AM

    The main reason those garment suppliers cant compete in the European market is low quality products rather than GSP plus.

    umara Saturday, 26 January 2013 12:03 PM

    dont worry we finding oil srilanka near future

    Who Cares Saturday, 26 January 2013 12:07 PM

    GSP!! What GSP?

    I say, We have more important things to do like visiting those who heard gunshots near their houses, etc., etc.

    Ram74 Saturday, 26 January 2013 12:07 PM

    ya if we export manual labour for some one the rules are tight..if it is a house maid or if it is clothing buyer rules. can not export to china because they do the same

    weha Saturday, 26 January 2013 12:18 PM

    Try exporting to China and India. may be Iran also :P :P

    Nodrog Saturday, 26 January 2013 12:20 PM

    rathmalgama, don't show your ignorance by making stupid comments. Are you a government man? By their arrogance, stubbornness and total lack of understanding the govt has marginalized hundreds of workers....and they wonder why so many have to go the ME to work as maids?

    Migrator Saturday, 26 January 2013 12:22 PM

    oooops..... hand over the closed garment factories to GR to put up new army camps... he..he..

    MF Saturday, 26 January 2013 12:24 PM

    This is an international conspiracy....Ask Wimal Modawansa.. he will give the names of the Embassies and NGO's behind this sinister move...this Government is innocent...

    Rala Saturday, 26 January 2013 01:26 PM

    Where are the ministers who said removal of GSP will not affect the businesses?

    Em Saturday, 26 January 2013 02:01 PM

    Good shot to those who shouted.. Await next is sanctions on trades.

    Em Saturday, 26 January 2013 02:03 PM

    Mr. Rupan China is also one of depending country on those trade. I wonder how can they help us because they have to feed themselves first before feeding others LOL

    meranchi Saturday, 26 January 2013 02:38 PM

    So crime increasing government don't bother,,,,,,i

    Channa Saturday, 26 January 2013 02:40 PM

    Have ever seen the bangladesh garments in Europian countries and in Australia. Sri lankan garments are thousand times better than those.Please dont show your ignorance

    ss reply Saturday, 26 January 2013 03:08 PM

    sorry, most of us are migrating to countries that honor law and order.

    ss Saturday, 26 January 2013 03:26 PM

    after obtaining free education funded by blue collar workers for more than eighty years of higher education

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