Financial Times

Thulhiriya to host world class warp knit fabric project
By Dilshani Samaraweera
MAS Holdings in partnership with Dogi International Fabrics of Spain and Elastic Fabrics of America (EFA), will introduce warp knit technology to Thulhiriya. Dogi and EFA are the world’s top two producers of warp knitted material.
“We hope to launch the (Thulhiriya) site with a US$ 30m project to manufacture warp knitted fabric.

In South Asia warp knit fabric is only produced at one factory in India but the factory in Sri Lanka will be the first export unit of this kind,” says Dulindra Fernando CEO, MAS Investments – a new company set up under the MAS group to provide infrastructure services at Thulhiriya.

“This will be a world class facility that will cater to the leading intimate wear brands,” says Dhananjaya Rajapaksha, CEO of DogiEFA Pvt, Ltd – the joint venture that will supply Sri Lanka with warp knit technology.
Construction on the warp knit unit at Thulhiriya will start this year, for production to begin in 2007.

Better support
With quotas ending last year, Sri Lanka’s US$ 2.7 billion apparel export industry - that single handedly brings in over half of Sri Lanka’s total export earnings - is getting squeezed by low cost competition.

China, for instance, is seen as a threat to all types of local apparel exports, because of massive production capability that is not just low cost, but is also diversified into niche areas that Sri Lanka specializes in. While India is also a mega producer at low cost, India does not have a name, or strong domestic facilities, to produce Sri Lanka’s number one garment export – intimate wear. But China does.

So getting the warp knit unit up and running in Thulhiriya, will primarily help defend Sri Lanka’s share of the global lingerie market. “The warp knit technology will give Sri Lanka a competitive advantage for intimate apparel in the region. It will also strengthen our swimwear and active-wear exports,” says Mr. Fernando. “When you have production facilities here, you have the flexibility to experiment, do samples and designs, to show buyers.”

Offering such design and development services in Sri Lanka will add value to the local apparel industry and will bring international garment buyers closer to Sri Lankan manufacturers.

The availability of the technology will also fix buyer interest on Sri Lanka despite comparatively higher costs and smaller production capability.
“Now, especially after the quota removal, the business is moving to where the fabrics are. So producing warp knitted fabric here, will definitely boost business” says Mr. Rajapaksha. Production of warp knitted fabric at Thulhiriya, adding that MAS will be available for all local exporters and not just companies in the MAS group.

100-million-dollar plans
MAS Investment’s plans for the sleeping Thulhiriya giant goes beyond warp knit. The US$ 100 million plans for Thulhiriya includes nine other investments, also aimed at strengthening apparel industry backward integration. The idea is to transform Thulhiriya into Sri Lanka’s first ‘supply chain city,’ to meet garment industry needs.

The location – within easy reach of Kandy, Katunayake and Dambulla – is expected to make it easier for Thulhiriya to function as an industry service centre, particularly if the proposed Kandy highway is completed.
“The government insisted that all the projects had to be backward integration projects for textile manufacturing.

This request is consistent with our Chairman’s vision of positioning Sri Lanka as a regional apparel hub,” says Mr. Fernando. To start going down this road, over the next three years, Thulhiriya will open facilities for fabric printing, placement printing and garment washing.

The textile training college in Thulhiriya will also be re-activated as a knowledge centre for textile and garment technology and lean manufacturing. MAS says it is hoping to work with local and foreign universities to achieve this. The group also hopes to create 3,000 jobs over the next three years inside Thulhiriya.

Why warp knit
Warp knitted fabric is a synthetic, stretch fabric, used to make lingerie, swimwear and sportswear. At the moment Sri Lanka’s US$ 2.7 billion ready-made garment industry spends millions of dollars importing these fabrics - mainly from China.

The technology is also available in other South East Asian countries like Indonesia and Thailand. Sri Lanka is looking at getting into this high-tech league.

When the warp knit facility in Thulhiriya starts operating, “By 2008, we will be producing 20 – 30 percent of national requirement for warp knit fabric,” says Mr. Fernando.

Domestic production of the fabric is expected to help the apparel industry by cutting down lead times and import costs. Meanwhile, DogiEFA is also looking at export potential within the region. “We see the market opportunity in Sri Lanka because 100% of the fabric is currently imported. India is also one of our primary targets,” says Mr. Rajapaksha.

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