Textile plant in Eravur to attract $40m investment
Sri Lanka’s apparel industry expects the fabric manufacturing plant, to be established in eastern Eravur, to commence construction in six months’ time with the likelihood of attracting an investment of US$40 million towards the project.
Sri Lanka Apparel Exporters Association (SLAEA) Rehan Lakhany told the Business Times that within about six months the plant would be ready for construction. He noted that since this has been part of the new President’s election manifesto the industry is convinced that the project would receive the backing from the government in this regard.
Environmental agency officials are expected to visit the identified 200-acre land in Eravur within the next two weeks but the process in allocating the land is still underway. The fabric manufacturing facility will ensure speed to market and shorter lead times once the foreign textile manufacturers set up, it was noted.
The apparel industry has been unofficially obtaining assurances from investors in China and India to engage in the manufacturing facility once it is established. Due to the trade war between the US and China there has been increased investments moving out from these markets and moving into countries like Bangladesh, Africa among others “but unfortunately Sri Lanka had not been on their radar” since this kind of facility is not available, Mr. Lakhany explained.
The industry has been assured of the possibility of Indian and Chinese investors investing $40 million into the project. The facility is expected to attract a minimum of five investors to set up their production plants initially as weaving is not available in Sri Lanka and it is a requirement in the manufacture of garments. In this respect they have been in talks with investors who have already expressed interest in setting up shop in the East once the facility is up and running. The textile plant in the East is expected to produce about 35 tonnes of fabric per day and is said to meet the local requirements.
Currently, Sri Lanka imports about $2.5 million worth of fabric per annum for both manufacturing and domestic purposes. Sri Lanka has just a few large manufacturers involved in knitting but at least 70-80 per cent of the fabric continues to remain an imported product.