Sri Lankan apparel maker to increase revenue by 50 percent kin next three years
A Sri Lankan apparel maker, Teejay Lanka Plc, which has operations in Sri Lanka and India, is reportedly planning on growing revenues by 50 percent in the next three years.
An official of the Company has been quoted as saying that the increase in revenue will be done by riding a shift of production from China and output growth based on productivity gains.
“What we are seeing is a movement of orders out of China and the South Asian subcontinent is a key beneficiary gaining from this trend,” Teejay Lanka Director Hasitha Premaratne has been quoted as saying in the local media.
“Teejay being a fabric player out of the both India and Sri Lanka has been benefiting from this trend.”
In the year to March 2019, Teejay Lanka group revenues have reportedly grown to Rs. 31 billion from Rs. 24 billion in 2018, (US$ 191 million from US$ 162 million in 2018)
In the next two to three years, the firm is looking at growing to US$ 300 million.
According to reports, instead of building new factories, which will also push up fixed costs, Teejay is to maximise the use of remaining space in India and Sri Lanka, and replace older machinery with new ones with higher capacity.
The firm is to also move to higher value products.
“We will go up the value chain with more sophisticated and innovative products,” Premaratne has said.
In July Teejay tied up with LFT in China to produce lace.
Teejay profits have grown 62 percent to Rs. 453 million in the June 2019 quarter from a year earlier, as revenues grew 19 percent to Rs. 8.1 billion, helped by strong orders and also some currency depreciation.
Earnings have grown to 65 cents a share from 40 cents for the quarter.
Teejay Lanka’s top customers are Western brands, who have production units mainly in Sri Lanka and India and among top brands using Teejay fabric are Marks and Spencer Victoria’s Secret, Intimissimi and Decathlon, reports add.
OSL take:
The move to increase revenue by the Sri Lankan apparel company as well as increase its overseas operations is indicative of the strength and growth of the country’s private sector. Sri Lanka’s apparel sector has been greatly benefited by the many trade agreements as well as trade concessions enjoyed by the country, especially the EU’s GSP Plus facility. Given Sri Lanka’s strong exports sector, all these above mentioned facilities have resulted in the expansion of business/investment opportunities in Sri Lanka’s apparel and exports sectors.
| Article Code : | VBS/AT/04092019/Z_1 |