Sri Lanka is basking in the glow of an economic luminance that followed decades of conflict. The country successfully emerged from a decades-long civil war in 2009 and a peaceful and democratic transition of governments early this year. Sri Lanka’s apparel industry is one particularly bright spot economically. It’s attracting increasing attention from retailers looking for lower-cost alternatives to traditional sources such as China.
However, the head of Sri Lanka’s largest garment manufacturer says that his company can’t build business on the back of cheap labor.
“We don’t focus on low cost,” said, Ashroff Omar, the CEO of Brandix, in a telephone interview with AJOT. “Of course, we have to be in the ballpark in terms of pricing,” he said from his headquarters in the country’s capital of Colombo. “Compliance, service, workmanship, value, that’s what we focus on. That way, you can expect a much more loyal customer for a much longer period of time.”
Brandix customers include Banana Republic, Victoria’s Secret, Gap and Marks & Spencer. Business is divided about 60% North American and 40% European.
Brandix has consolidated revenues of approximately $700 million, including operations in India.
The Sri Lankan garment industry totals only about $4.5 billion. That’s less than 20% of neighboring Bangladesh’s $24.5 billion, which has experienced huge growth because of its labor costs.
Sri Lankan industry has taken a long time to germinate as well. It got its start more than three decades back, amidst high expectations. Brandix was formed in 2002, although it traces its origins to a factory started in 1969.
According to Omar, Sri Lanka is now well-positioned to expand its apparel trade and move up the value chain. Colombo’s port has “ample capacity,” he said, especially after a new $500 million container terminal was opened in 2013. Customs documentation is both simple and quick. The airport is efficient as well. “We offer great logistics,” he said.
While Sri Lankan apparel exports on a per capita basis are relatively high, there’s no question but that Sri Lanka’s garment trade was held in check because of security issues, as was the economy as a whole. Brandix, said Omar, was “fortunate to grow despite the war,” which was largely limited to the north and east of the country. However, the end of hostilities has meant more buyers are showing up.
Omar would like to see Sri Lanka emerge as a regional center for apparel, taking advantage of a burgeoning Indian middle class with its own fashion demands. “The market in our region is growing very fast,” he said.
