Sri Lanka’s Teejay eyes sales to new apparel plants in Africa, South Asia
Friday July 26, 2019 13:31
Notice: Undefined variable: insert_after in /home/customer/www/economy.oddly.co/public_html/wp-content/themes/enext/single.php on line 166
ECONOMYNEXT- Sri Lanka’s Teejay Lanka Plc, one of South Asia’s largest fabric mills, is eyeing sales to new apparel factories being set up in the region and Africa, a top official said.
"The increasing trend of locating apparel manufacturing plants in South Asia and the African continent, offer a landscape of many opportunities for the Sri Lankan fabric industry," Chairman Bill Lam told shareholders in the firm’s annual report.
He said many global apparel manufacturers are relocating their apparel plants to South Asia from China, which has so far been the largest global garment producer.
This is due to changing US tariffs on Chinese products, and rising cost of labour in China, Lam said.
Teejay Chief Executive Shrihan Perera said that factories being relocated from China will also help lower costs for the firm.
"A likely decline in demand for cotton in China who is also one of the two leading suppliers of cotton yarn in the global market, could help curtail prices of our key raw material," he said.
Meanwhile, he said that there are only a few fabric mills present in Africa to compete with Teejay.
Therefore, setting up of new apparel plants in the continent offers Teejay sales opportunities, as Sri Lanka is located on a central maritime route to Africa, he said.
New opportunities are also opening up in India, where leading global apparel brands are seeking to capture the spending of the growing middle class, Perera said.
He said that since Teejay already has manufacturing facilities in India, the firm can offer competitive costs and delivery times.
However, the operations in Sri Lanka face high energy costs and infrastructure limitations, slowing expansion, Perera said.
"We are also constrained by the limitations to infrastructure at the BOI Zone," he said.
"Thus, it is our fervent hope that these limitations will be addressed with improvements and additions to the existing infrastructure in the near future."
Teejay, which specializes in making knit fabric recently has ventured into lace production at its Indian plant as well, in the firm’s attempt to diversify income.
In the last financial year, the firm had added two global brands, Nike and Uniqlo to its portfolio, which also includes big brands such as L Brands, PVH, Marks & Spencers and Decathlon. (Colombo/Jul26/2019)