Fabric and Textile Manufacturing Plants

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Fabric and Textile Manufacturing Plants
SectorMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Consumer Goods
Apparel and Textiles
Business Model Description

Invest to develop and operate fabric and textile manufacturing plants in dedicated zones such as the textile manufacturing zone in Eravur. In 2022, the Sri Lanka Board of Investment (BOI) signed the agreement for the first FDI in Eravur, a USD 35 Mn investment by Jay Jay Mills Lanka, a supplier to globally-renowned infant apparel brands (27). Examples of other companies active in the IOA space:

Ocean Lanka (Pvt) Ltd, established in 1996, is a large weft knitted fabric manufacturer with over 20 years of experience in producing high quality fabrics. The company is a joint venture between Hong Kong based Fountain Set Holdings and local Hirdaramani Group and Brandix Lanka Limited (15) It has the capacity to process over three million lbs (1,500 tonnes) of fabric and yarn in a month (22)

Hayleys Fabric PLC commenced operations in 1993 and is the first fabric mill to be listed in the Colombo Stock Exchange in 2003. Specialises in the synthetic range of knitted fabric. Rotary printing, sublimation printing, sueding and brushing fabric, and many chemical finishes are some of their value-added technical capabilities. 17,326 MT of Fabric and a turnover of USD 140 Mn in 2021(16)

A.P.S Knitters (Pvt) Limited established in 1991, is a producer for many categories and type of fabric, present across Sri Lanka. It is also the parent company of A. P. S. Marketing Services (Private) Ltd, C. P. S. Trading Co. (Private) Ltd, P. K. C. Knitters (Private) Ltd and Texknit (Private) Ltd. 5500 – 6500 kgs of fabrics are produced daily at the factory in Mattakkuliya (18)

OceanicKnitters Pvt Ltd. was established in 1980. They are one of Sri Lanka's finest Knit Fabric manufacturers. The company also has vertical operations from knitting, dyeing and finishing of knit fabric to cater to the local and international markets. Capacity in the knitting of 4-5 tons a day and dyeing of 10-11 tons a day (19)

Tee Jay Lanka PLC founded in 2000 is a leading multinational manufacturer of weft knitted fabric. The company is backed by Sri Lanka’s largest apparel exporter Brandix Lanka, which has a 32% stake. Pacific Textiles of Hong Kong, owns 27% of Teejay Lanka. USD 250 Mn in revenue with a daily production capacity of 75 tonnes in 2021. Teejay was the first company in the country to produce green fabric (13)

Expected Impact

Investments in this IOA will help build domestic capacities to integrated value added products and services in the apparel sector leading to enhanced employment opportunities, reduction in import dependence and sustainable industrial practices

Indicative ReturnDescribes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
Hayleys Fabric ROE- 42%; ROCE -11%. Tee Jay Lanka ROE - 11%; ROCE - 8.62% for 2021/22 (7) (13)
Investment TimeframeDescribes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Short Term (0–5 years)
Market SizeDescribes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
> USD 1 billion
Average Ticket Size (USD)Describes the USD amount for a typical investment required in the IOA.
> USD 10 million
Direct ImpactDescribes the primary SDG(s) the IOA addresses.
Industry, Innovation and Infrastructure (SDG 9)
Indirect ImpactDescribes the secondary SDG(s) the IOA addresses.
Decent Work and Economic Growth (SDG 8) Gender Equality (SDG 5) Reduced Inequalities (SDG 10)
Sector Sources
  • 1) Female apparel workers demand dignity and recognition- Island (2021) -https://island.lk/female-apparel-workers-demand-dignity-and-recognition/ 2) The Power Women Of The Apparel Industry Who Drive Sri Lanka’s Economy - JAAF (2019) -https://www.srilankaapparel.com/the-power-women-of-the-apparel-industry-who-drive-sri-lankas-economy/ 3) Annual Export earrings CBSL - https://www.cbsl.gov.lk/en/statistics/statistical-tables/external-sector 4) Share of GDP DCS -http://www.statistics.gov.lk/NationalAccounts/StaticalInformation/2015/Reports/Annual_A49/Share_GDP_cu_2010-2021 5) A Roadmap Towards a Greener Apparel Sector - A Sustainable Financing Strategy for Sri Lanka - https://www.hsbc.lk/content/dam/hsbc/lk/documents/financial/roadmap-towards-a-greener-apparel-sector-brochure.pdf 6) Sri Lanka’s apparel industry on tenterhooks over EU trade scrutiny (2021) -http://bizenglish.adaderana.lk/sri-lankas-apparel-industry-on-tenterhooks-over-eu-trade-scrutiny/ 7) Annual Report 2021 -2022 -Hayleys Fabric PLC - https://cdn.cse.lk/cmt/upload_report_file/403_1654161786464.pdf 8) Skills Gaps in Two Manufacturing Subsectors in Sri Lanka (2020): ADB - https://www.adb.org/sites/default/files/publication/543046/skills-gaps-two-manufacturing-subsectors-sri-lanka.pdf"
IOA Sources
  • 9) The Shop and Office Employees Act No. 15 of 1954 -https://www.lawnet.gov.lk/shop-and-office-employees-2/#:~:text=AN%20ACT%20TO%20PROVIDE%20FOR,CONNECTED%20THEREWITH%20OF%20INCIDENTAL%20THERETO. 10) EU GSP+ Department of Commerce -http://www.doc.gov.lk/index.php?option=com_content&view=article&id=81&Itemid=206&lang=en 11) A Guide for users on GSP rules of origin- https://taxation-customs.ec.europa.eu/guide-users-gsp-rules-origin_en 12) Eravur Fabric Park to draw over USD 300 mn FDI in next 2 years (2022) -https://www.dailynews.lk/2022/08/15/business/284967/eravur-fabric-park-draw-over-usd-300-mn-fdi-next-2-years 13) Tee Jay Lanka PLC Annual Report 2022 -https://cdn.cse.lk/cmt/upload_report_file/1080_1659005883255.pdf 14) Central Bank of Sri Lanka Annual Report(2021). Special Appendix -https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/publications/annual_report/2021/en/15_Appendix.pdf 15) Oceanlanka - https://www.oceanlanka.com/about-us/ 16) Hayleys Fabric PLC - https://www.hayleys.com/textile-manufacturing/ 17) Factories Ordinance No 45 of 1942 - https://www.ilo.org/dyn/natlex/docs/ELECTRONIC/47666/88132/F1807109239/LKA47666.pdf 18) A. P. S. Knitters (Pvt) Ltd - https://www.apsknitters.com/profile/ 19) Oacianic Knitters Pvt Ltd -https://www.oacianic.com/ 20) Can Fashion Ever be Sustainable; BBC (2020) - https://www.bbc.com/future/article/20200310-sustainable-fashion-how-to-buy-clothes-good-for-the-climate 21) Textile Zone Development - BOI -https://investsrilanka.com/textile-zone-eravur-batticaloa/ 22) Ocean Lanka - LMD (2022) -https://lmd.lk/ocean-lanka-2/#:~:text=Currently%2C%20OCL%20has%20the%20capacity,yarn%20dyeing%20and%20fabric%20collection. 23) Girls in STEM: How is Sri Lanka Faring?Institute of Policy Studies(IPS) (2020) -https://www.ips.lk/talkingeconomics/2020/02/11/girls-in-stem-how-is-sri-lanka-faring/ 24)Browns Fabric supports dollar-earning apparel industry with $ 52 m new BOI venture, Daily Ft (2022)- https://www.ft.lk/front-page/Browns-Fabric-supports-dollar-earning-apparel-industry-with-52-m-new-BOI-venture/44-738963 25) Garments without Guilt: https://www.sgs.co.uk/en-gb/sustainability/social-sustainability/social-responsibility-sr/garments-without-guilt 26) The G7 Fashion Pact, Press Release: https://www.thefashionpact.org/download?id=383&pn=Press%20release 27) Sri Lanka Apparel Sector Investments at USD 75 in 2022: https://www.offshore-technology.com/uncategorized/sri-lanka-apparel-sector-investments-at-us76m-in-2022/ 28) EU GSP Conventions related to the environment and to governance principles: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32012R0978#d1e32-60-1