Sri Lanka's Former War Zone Gets $ 5mn Apparel Plants by Timex and Fergasam Group

06th January 2012, www.lankabusinessonline.com

Apparel exporters Timex and Fergasam Group will build two factories at a cost of five million US dollars in Sri Lanka's north-western Mannar, part of the former war zone, the ministry of industry and commerce said.

The first Mannar factory is to start production by mid-October 2012, its statement quoted officials of Timex and Fergasam as saying.

The project will be in two phases with the first factory giving employment for 1,200 people and the second for 800.

The new factories will be the 17th and 18th manufacturing facilities to be set up by the apparel group.

Timex and Fergasam currently employs more than 8,000 across its 16 manufacturing facilities with offices in UK and Hong Kong.

Among clients of Timex and Fergasam are top labels like Marks & Spencer, Victoria’s Secret, House of Frazer, Diesel, H&M and SUZI Chin, the statement said.

Sri Lanka Lures back Apparel Buyers Who Went to Bangladesh, Vietnam & Cambodia by Its Superior Service Levels

27th June 2011, www.lankabusinessonline.com

Sri Lanka has begun luring back foreign apparel buyers who shifted to other Asian producers following the global economic crisis after they failed to meet buyer expectations, an exporter has said.

Orient Garments, which is to list on Colombo Stock Exchange's second board, also said it aims to capture orders now supplied by Eastern Europe by offering shorter lead times.

"It has been evident that some of the world's leading apparel buyers have shifted their sourcing towards low cost countries such as Bangladesh, Vietnam and Cambodia from Sri Lanka in the light of the global economic turmoil," the company said in its prospectus.

"However, due to the reason that particular low cost destinations have failed to accomplish service levels with required standards such buyers are gradually returning to Sri Lanka."

According to the prospectus of the firm, which a unit of Sri Lanka's Finco group, Sri Lanka can also benefit from rising costs in China.

"Challenged with currency appreciation, subsidy withdrawals and escalating labour costs China is rapidly turning into an unprofitable garment manufacturing destination," it said.

"This trend in China presents an opening for Sri Lanka to reinforce its position as a cost effective sourcing country in the global fashion industry."

Orient Garments said Sri Lanka's garment manufacturing sector has been able to overcome hurdles like the end of textile quotas and the withdrawal of GSP+ import duty concessions by the European Union.

The company said it also plans to seize the demand in European countries for apparel orders shipped within a short lead time which is currently catered to by Turkey and other Eastern European countries at a premium price.

It plans to allocate 20 percent of its existing capacity of 3.1 million pieces to process export orders which require quick response time.

"Under the new scheme, the company will deliver goods within nearly 70/80 days from the order acceptance instead of 100/120 days," it said.

"This will enable the company to increase the market share by capturing new market segments while increasing its profitability by way of adding a premium to its price."

Related Info :

• Apparel Indistry to Achieve $5bn in 2015 despite Competition & Uneven Playing Field in the International Arena

• Sri Lanka's Omar Proposes a New Business Model for Apparel Industry to Deliver Phenomenal Products at Great Prices

• Sri Lanka’s January Exports Up 72.4pct. Garment Exports to Europe Up 143.5pct without EU GSP+ and Trade Deficit Contracts 10pct

Orient Garments supplies international fashion brands and retailers such as NEXT, Tesco, Tommy Hilfiger, Polo Ralph Lauren and Burberry.

It has five garment manufacturing plants with almost 1,500 direct sewing machines, two embroidery units with 105 embroidery sewing heads, and nearly 3,500 workers.

Sri Lanka Offers Opportunity to Foreign Companies as China Becomes Expensive - President Rajapaksa to Wall Street Journal

22nd September 2010, online.wsj.com, By Gabriella Stern

NEW YORK -- Sri Lanka's president said Wednesday that rising labor costs in China present an opportunity for his South Asian country to attract foreign companies seeking an alternative low-cost manufacturing base.

President Mahinda Rajapaksa, in New York for the United Nations General Assembly, told The Wall Street Journal that the once war-torn country has enjoyed a 15-month period of peace during which his government has focused on rebuilding roadways and

railroads in the ravaged North and East, expanding the availability of electricity and clean water, and providing homes, among other things.

He said Sri Lanka--with a literate population, relatively low labor costs, and a sizeable corps of trained accountants--is drawing the interest of outsourcing firms, including major Indian business-process outsourcing companies seeking ways to expand outside India, where wages also have been rising.

In addition, European and U.S. retailers are increasingly turning to Sri Lanka to produce apparel at costs below those in China, Mr. Rajapaksa added. His country faces a labor shortage in the apparel sector as a result of this interest, he added.

Ashroff Omar, chief executive of apparel exporter Brandix Lanka Ltd., said it currently costs about $150 a month to employ a "trained" Sri Lankan apparel worker, compared with $400 in China. In a couple of years, he said, the cost in China will be about $600, compared with around $200 in Sri Lanka.

Mr. Omar and about two dozen business leaders and government ministers accompanied President Rajapaksa to the U.S.

Tourism is growing in his country, as Indian travelers gravitate to a peaceful Sri Lanka, and interest among European tourists--particularly Scandinavians--picks up, Mr. Rajapaksa said. Agriculture and fisheries are also key drivers of economic growth.

President Rajapaksa acknowledged that Sri Lanka still suffers from a lingering perception that it remains a war zone, but said there have been "no incidents" for more than a year and foreign governments have generally removed advisories warning travelers to stay away.

The country's economy grew 8.5% in the second quarter, compared with 7.1% year-on-year growth in the first quarter, according to Fitch Ratings. Inflation, at just under 6%, is under control, Sri Lanka's president said. The International Monetary Fund recently said a Central Bank of Sri Lanka rate cut was appropriate policy and projected a continuation of single-digit inflation for the year.

The president said his biggest worry is "protectionism" by other Asian countries at a time when Sri Lanka hopes to tap into the region's unprecedented economic expansion.

Sri Lanka, with a population of 20 million, emerged from a three-decade civil war in May 2009 with the defeat of the Tamil Tigers.

Email gabriella.stern@dowjones.com

Highest Earning by Textile and Garment Exports Recorded in August 2009 - Central Bank of Sri Lanka

23rd October 2009, firstlanka.com

The Central Bank claimed that textile and garment exports rebounced by 8.5 percent, year-on-year. It recorded 324 million US dollars in August 2009 which is the highest earning by the sector during the year.

Sri Lanka exports showed a steady month on month rise with a recovery seen in the key apparel sector. The Central Bank further noted that food and beverages and other industrial exports were also improving. Tea exports had grown 2.8 percent in August from a year earlier.

The average export price had reached 4.34 US dollars a kilo in 2009. According to the Central Bank total exports in August were 710 million, and had been growing from April.