Financial Times

Hayleys-MGT Knitting supplies fabric to Nike
Hayleys-MGT Knitting Mills Ltd has begun supplying knitted fabric to big brand names like Nike in a big breakthrough that came after its success in winning a huge order to export cloth to make jerseys for English football clubs.

The company, a joint venture between an Australian firm and the Hayleys conglomerate, has also completed an expansion project that increased plant capacity by 50 percent to 20 tonnes of fabric a day with what a senior company official called "a fairly substantial investment of money."

The company's director and general manager Bandula Weerasinghe said the firm's investment in modern knitting and printing technology had helped secure business from the likes of Nike whose initial orders for sportswear came two months ago.

"To make fabric for the Premier League football clubs we installed a machine to print stripes. That's where Nike became interested," Weerasinghe said. "We're the only manufacturers in Sri Lanka who can do sublimation prints on polyester."

MGT Knitting Mills has begun supplying fabric for the England and Ireland football associations as well as the Norway football association and to English Premier League clubs like Everton and Chelsea.

"In time to come we expect bigger orders from Nike because we're the only people who can do polyester polar fleece - a fabric used to make winter clothing," Weerasinghe also said.

"Nike is considering us only on polyester, not cotton, as our strength is in polar fleece and polyester." MGT Knitting Mills posted an impressive second quarter performance with net profit doubling to Rs 99.4 million in the three months ending September 30, 2004.

Hayleys chairman Rajan Yatawara told The Sunday Times FT in a recent interview that MGT Knitting Mills was "doing very well" and had won a large order from Umbro, franchisee for the England Football Association, to make the famous red football jerseys worn not only by the teams but even their supporters. The order, for some 3,000 kilometres of cloth, came from a local garments manufacturer but the garments were made in China according to the customer's requirements.

That order had opened the doors to other business with globally recognised brand names in active and sports wear. "There have been more orders stemming from that," Weerasinghe said. "It has opened up potential for us to supply companies like Nike." MGT Knitting Mills is expected to make a "substantial improvement" in year-end net profit compared with last year, another senior company official said. Net profits for the six months ending September 30 are up 80 percent to Rs 152 million from the same 2003 period while turnover increased 60 percent to Rs 1.6 billion.

"The results reflect the increasing investments that have been made over the last few years in increasing capacity and unplugging bottlenecks in the production chain," the company official said.

Asked about further expansion, he said "nothing specific is planned right now" but added that the nature of the industry requires constant investments to keep abreast with the latest technology.

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