Brandix-Hayleys in logistics deal at Indian apparel zone

Sri Lanka’s Brandix and Hayleys groups are gearing to start exporting garments to the world - from India.

Last year, Brandix, Sri Lanka’s biggest exporter, signed an agreement with the Indian government to set up a 1,000 acre apparel manufacturing zone in Andhra Pradesh, India. Known as the Brandix India Apparel City (BIAC), the manufacturing zone is designed to be fully vertically integrated, producing garment inputs as well as ready-made garments. The city will also house training and laboratory facilities and other ancillary facilities, making it a one-stop-shop to manufacture clothing. When fully occupied by manufacturers of garment inputs and ready –made-garment producers, the total investment value of the apparel city is expected to hit US$ 1 billion. These investments are to be pulled into the apparel city over the next six to seven years.
As part of the development of the apparel city, this week Brandix signed an agreement with the Hayleys group to supply logistics for the Indian industrial zone.

“This particular venture is very innovative because now we are able to offer an almost plug-and-play solution to any industrialist locating in the apparel city. Manufacturers will be able to focus on their core business and not worry about the logistics,” said Brandix CEO, Ashroff Omar.

The Indian apparel city is designed to house spinning facilities and factories to produce fabric, accessories, garment embellishments and garments. The centralised logistics system is expected to ensure smooth interlinking of these production activities.

The logistics services will be provided for the apparel city by Logiwiz - the Hayleys group’s third party logistics specialist. Under the US$ 15 million Brandix–Hayleys joint venture logistics agreement, Logiwiz will build and operate a logistics hub for the Andhra Pradesh apparel city. The logistics services hub will be located within the zone and will provide a range of services from storage, handling and transport of goods, to extension services like a centralised fabric cutting facility and a garment finishing area.

“We can facilitate movement within the apparel city and if goods are being sourced from India, we can also facilitate movement of these goods to the apparel city. Since 70% – 80% of the production is for export, we will also operate an inland container depot,” said Director, Logiwiz, Chandima Allis.

Construction work on the 20 acre logistics hub is due to begin in June this year to be operational in early 2008. The apparel city itself is still under construction and is expected to be ready for occupation by August this year. Commercial production from the city is due to begin in early 2008.

Meanwhile the Hayleys group says it plans to expand its overseas presence. “Hayleys’ vision is to be a regional leader and greater regional presence is now also a client requirement. We started operations in Bangladesh in 2006 and in India, we are already operating in Bangalore, Hyderabad and Kolkata and we are planning on expanding operations into other Indian metros,” said Allis.

The head of Hayleys points out that expansion outside the country is the key to the future. “The Hayleys group is Sri Lanka’s first multinational and we understand the factors that make expansion beyond the country’s borders imperative, to maximise returns to the national economy,” said Hayley’s Chairman, N G Wickremeratne.

“For the development of our country I do not think it is good enough to operate only in Sri Lanka. Only those who can compete effectively with other countries will be able to survive in the future. Expansion abroad will give new exposure and will generate new employment opportunities and will also increase export earnings for the national authorities,” said Wickremeratne.