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Expanding Capacity

Feb 19, 2011 2:25:11 PM - thesundayleader.lk

Rainbow Clothing (pvt.) Ltd., a mid size garments manufacturer that caters to the UK market will be expanding its facilities as present supply is unable to cater to increased demand, its Managing Director Deepal Nelson told this reporter.
This US$ 1.2 million turnover company is a supplier to Next, a UK headquartered clothing retailer.
Nelson said that despite the loss of the GSP + duty free facility, the advantage that Sri Lanka has is that some of their competitors like Bangladesh have trade union problems (which is also the same with India) which affects production, while others, like Vietnam and China are becoming expensive, he said. As a result, Gopal  Iyer, Chairman, Buying offices Association has been forced to turn down orders, alleged Nelson. Iyer speaking to reporters recently said that buying offices such as Next and Marks and Spencer, the biggest suppliers to the UK market (Sri Lanka’s second biggest export market after USA), were having their order books full, with supply being unable to meet the demand (see The Sunday Leader issue of February 6, 2011).
But prices are going up, and those are naturally being passed on to the end user, Nelson said. Nelson who has his factory at Nawagaththegama, Anamaduwa (about 15 kilometres to the interior of Anamaduwa town) said that the average take-home pay of one of his factory workers was Rs. 15,000. Additionally breakfast and transport facilities are given to the workers, he said. In the free trade zone, a garment factory worker’s take home pay is as high as Rs. 20,000; said Nelson.
The company provides employment to some 500. The Sri Lankan worker is good, he said.
His factory workers however cannot work more than an hour’s overtime because the factory is located in elephant country. By 5.30 pm they sign off. Most of the women in the area ride at least mo-peds, Nelson said. Only the old ride push bicycles. The villagers are poor, but they are not starving, he said. They have three meals a day, he said. They are mainly farmers. “We survived the war, local industries will be able to circumvent the current crises caused by a higher tax regime in the cosmetics industry,” Nelson who also operates a cosmetics factory catering to the Japanese market said, while at the same time supplying to the local market. Exports however are not subject to tax (see also page 33).