Sri Lanka Textile Firm to Raise $26.3mn by Private Placement and IPO. Textured Jersey Owned by Brandix & Pacific Textiles Palns to Sell a Stake

19th March 2011, www.lankabusinessonline.com

Sri Lanka's Textured Jersey, a textile make owned by Brandix Lanka Ltd and Pacific Textiles of Hong Kong said it is planning to raise 2.9 billion rupees (26.3 million US dollars) through a private placement and initial public offering.

Pacific Textiles now owns 60 percent of the firm and Brandix Lanka 40 percent, the company said in a statement.

Textured Jersey is planning to sell a 30 percent stake to the public through the placement and IPO.

Textured Jersey said it makes weft-knitted and dyed stretch for Asian apparel makers and retail chains. Among its largest clients are Victoria's Secret, Marks & Spencer and Intimissimi.

"High global cotton prices are an industry-wide headwind at present, but we believe this will facilitate industry consolidation in the longer term, and stronger players will continue to gain market share," chief executive of Pacific Textiles and director Bill Lam, said in a statement.

The firm has a 650,000 square feet factory in Avissawella, Sri Lanka, which can knit, dye and finish up to 2.5 million meters of fabric a month. The firm had annual revenues of about 83 million US dollars an official said.

"Knit products constitute the fastest growing segment of the Sri Lankan apparel export market, which is growing strongly even after the end of the GSP+ concessions in August 2010…," Ashroff Omar, chief executive of Brandix Lanka said.

He said funds from the equity would be used for future growth. CT Capital (Pvt) Ltd and Acuity Partners (Private) Limited would be advisers and manages to the issue.

The statement said Hong Kong listed Pacific Textiles' plants in China have an annual capacity 87 million kilograms. Revenues rose 21 percent for the six months to September 30 from a year earlier to 472 million US dollars. Profits rose 17 percent to 58 million US dollars.

Brandix has 32 plants in Sri Lanka employing 30,000 people and claims top spot in apparel exports. It also has facilities outside the country.

The group works with Victoria’s Secret, PINK, Gap, Banana Republic, Marks & Spencer, Lands’ End, Tommy Hilfiger, Hanes, Express, H&M, Intimissimi and Tesco.

It makes casual bottoms, underwear, lounge and sleepwear, bras, textiles, knitted and woven fabrics, sewing and embroidery thread, accessories and hangers, and also offers wet processing and finishing and fabric printing.

Related Info :

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

• Sri Lanka Exports Highest in December 2010. Remittances up 23.6pct in 2010 while Trade Deficit Expands 66.7pct on Import Growth

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

12th November 2010, www.dailynews.lk

There is a need for a new business model in apparel manufacturing, said Brandix CEO Ashroff Omar. He was delivering the keynote address at the Centenary World Conference of the Textile Institute held recently in Manchester.

Omar explored the topic ‘manufacturing on the global stage,’ making his presentation to an august assembly comprising world renowned corporate leaders, academics and researchers.

He contended that it is at present, a heavily fragmented industry stemming from the single-minded pursuit of cheap labour. He observed that retailers have become pseudo manufacturers taking on roles that belong within the sphere of manufacturing, resulting in an escalation of costs and a lower value proposition to the consumer.

Omar pointed out that industries such as automobile, computer and footwear have provided consumers with ‘phenomenal products at great prices’ whereas the apparel industry has moved in the opposite direction - providing the same product at a far higher price.

He recommended that the new model must be one of collaboration within the value chain enabling greater research and development and the employment of breakthrough technologies.

He said “I believe that, today, on the 100th anniversary of The Textile Institute, we are still a virgin industry.

Automobiles, phones, televisions, airlines are all industries which have large aggressive players while the enormous apparel market has a multitude of small suppliers who do not have the scale to deliver outstanding value.

There is white space for a few $ 5 billion companies.”

Pentland Group Limited CEO Andy Rubin, Hong Kong Polytechnic University Textiles and Clothing Institute Head Prof Xiao-ming Tao, and Corsair Capital Partner and Vice Chairman Lord Mervyn Davies were the other keynote speakers.

The conference themed ‘Creating a global vision for textiles, clothing and footwear’ recognised the need for change in the textile industry and focused on creating a platform for information exchange and networking.

The Textile Institute, inaugurated in 1910, was incorporated in England by a Royal Charter granted in 1925 and is a registered charity.

It is a unique organisation which has individual and corporate members in approximately 80 countries with the membership covering all sectors and disciplines of textiles, clothing and footwear.

The Centenary Conference was held in Manchester as it has been home to The Textile Institute for the past 100 years.