Huge potential to expand manufacturing sector to boost exports – MAS Holdings Chairman
Prime Minister Ranil Wickremesinghe
With a strong visionary mind and confidence in Sri Lanka’s international competitiveness especially in manufacturing, MAS Holdings Chairman Mahesh Amalean says there is a lot of potential to expand the manufacturing sector in Sri Lanka with specific reference to exports.
He made this statement at a ceremony held on Tuesday, where the company commenced operations in setting up its second fabric plant in Giriulla, outside Colombo.
The company has invested US$ 28 million on a 43-acre site which was originally known as the Mattegama Textile Mill owned by the government. In 1997 Kabool Lace was set up and carried out operations in the manufacture of lace and textiles until 2004. Since then the site has been closed.
In 2006, MAS Holdings developed the Thulhiriya site as an apparel and textile industrial park. “We were then and until today is the first private sector organisation to operate a fully-fledged industrial zone in Sri Lanka,” added Mr. Amalean.
With a dire need to expand capacity and because of the proximity of the location to Thulhiriya and Pannala where manufacturing operations are carried out, this industrial site in Giriulla is ideally located for expansion plans to export textiles and clothing, said Mr. Amalean.
“MAS Holdings has witnessed continuous growth in Sri Lanka over the past five years during which we have increased our export revenue from US$ 800 million to US$ 1.6 billion, earning valuable foreign exchange for the country. Today we employ 86,000 people in 15 countries around the world while 70,000 of them are employed in Sri Lanka in 38 manufacturing locations with around 2200 in Kilinochchi,” he stated.
He also mentioned that Thulhiriya started operations with a $25 million investment and 3000 people, generating annual revenue of $100 million at that time. Today with 8200 people the company gets revenue of $150 million annually.
MAS Holdings is the second largest apparel supplier to Nike Worldwide and one of their key supply chain partners. “As Nike grows their business from $30 billion today to $50 billion by 2020, we see the opportunity to double our business with them,” noted Mr. Amalean.
The Giriulla Fabric Plant is expected to bring annual revenue of $75 million. The investment will not only support the needs of MAS Holdings and the industry, but also uplift the living standards of the community in the area. In the next 12 months the machinery in the old factory buildings will be cleared, refurbished and new machinery will be installed to commence manufacturing, added Mr. Amalean.
Prime Minister Ranil Wickremesinghe attending the event as a Chief Guest, was very optimistic that Sri Lanka will regain the lost Generalised System of Preferences (GSP) Plus.
He said, “We will obtain the GSP + very soon.” After the restoration of this facility, MAS Holdings’ Giriulla Fabric plant will be able to increase employment to over 5000 employees from the current 3000 employees to boost exports to foreign countries. Exports have reduced tremendously over the past few years forcing factories to shut down with unskilled workers moving out of the country, he noted.
He also noted that in 2003
Sri Lanka earned $2.5 billion revenue from apparel exports while Bangladesh earned $5.2 billion. Both countries obtained GSP + at that same time while Bangladesh continued to get the facility and while Sri Lanka has lost it. In 2015 Sri Lanka earned revenue of $4.8 billion from apparel exports whereas the industry couldn’t double growth (owing to the loss of GSP +). Bangladesh saw a fivefold increase to $26.6 billion revenue in 2015. They can pay back the debt from imports from the revenue they generate, but for Sri Lanka to import what the country requires annually , exports are not enough. This is why the country needs to focus on new manufacturing technologies and machinery, stressed Mr. Wickremesinghe.