Sri Lanka plans fabric processing zone in East, targets China
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ECONOMYNEXT – Sri Lanka’s apparel industry is planning a fabric processing park in Eravur, Batticaloa in the East of the island, to draw investors from countries like China in a bid to cut lead times and reduce input costs, an official said.
Sri Lanka’s Joint Apparel Association (JAAF), an industry body, is working with the Board of Investment on setting up the industrial zone.
“We are talking to the relevant authorities to allocate a land of about 200 acres in Eravur that we have identified suitable to set up this zone,” Rehan Lakhany, who is also the chairman of Sri Lanka Apparel Exporters Association, told EconomyNext.
“Foreign textile manufacturers will be invited to set up factories within the zone,” he said on the sidelines of a forum on Sustainable Financing for Responsible Fashion organized by HSBC the International Union for Conservation of Nature.
Chinese apparel makers, who are looking to re-locate over a trade war with the US would be one of the target groups.
Sri Lanka imports more than 50 percent of its fabric from China along with other countries like India.
A shipment takes about a month to reach Sri Lanka from China, included clearing processes.
“This way, we can save up on the time lost in transportation and reduce expenditure on importing,” Lakhany said.
By cutting one month off our lead time, Sri Lanka is able to attract more business and boost value added domestically, he said.
The industrial zone will have centralized facilities such as water treatment plant to re-cycle water which will reduce set up costs for prospective investors, he said.
Sri Lanka apparel exports grew 6.5 percent year-on-year this October and is expected to end at a seven percent growth rate by this year.
Lakhany also said that exports to EU grew more when compared to other main export destinations like USA. (Colombo/Dec04/2019)