Sri Lanka’s Hela Apparel Holdings expands operations, commences operation in Egypt
The Morning: Following the conclusion of its listing on the Colombo Stock Exchange (CSE), Hela Apparel Holdings has expanded its global footprint by formally commencing operations at its latest factory in Egypt recently.
The expansion will enable the company to provide an attractive nearshore manufacturing offering, strengthening the organisation’s focus on providing the world’s apparel brands with innovative and sustainable supply chain solutions.
Commenting on the expansion, Hela Kidswear Chief Executive Officer (CEO) Sanath Amaratunga stated: “We’ve had an extremely positive response from both our existing and a range of new customers on our expansion into Egypt. It offers an immediate solution to the growing demand for speed in apparel sourcing. The well-established skill base and integrated supply chain in Egypt allow us to offer a range of product types at competitive rates. In addition, government authorities are very supportive and provide a range of incentives when establishing export-oriented manufacturing in Egypt. I would also like to take this opportunity to express my gratitude to the Embassy of Egypt in Colombo for their invaluable support throughout the establishment process, as well as to our staff members in Egypt for their hard work and commitment to Hela’s vision.”
The 275,000 square foot (sq.ft.) manufacturing facility is situated in the Alexandria Governorate, an area with a well-established skill base in apparel manufacturing that also hosts one of Egypt’s largest ports. The facility is equipped to accommodate up to 2,500 workers during a single shift, with the potential for significant further expansion. With this new addition, Hela has increased its global footprint to 12 directly operated manufacturing facilities, reaffirming its position as one of the leading apparel manufacturers in Africa.
Egypt offers a range of advantages for apparel manufacturing – most notably its geographic proximity to major markets, with shipping times as little as three days to Europe and 12 days to North America. This addresses the increasing demand for speed and nearshoring solutions from global apparel brands, which has become more pressing as a result of the logistics disruptions caused by the pandemic. Egypt also has a well-established textile supply chain, which drastically reduces the need to ship raw materials from Asia, bringing down lead times further, as well as the overall environmental impact of production, which is another key benefit for apparel brands. In addition, Hela’s foray into Egypt will allow indefinite duty-free access to both the EU and the UK market, through Egypt’s bilateral free trade agreements (FTAs) – as well as to the US via the Qualifying Industrial Zone initiative.
“Given the strong interest we are seeing from customers, we expect a significant positive contribution to both top and bottom-line growth from Egypt over the coming months, with the medium-term goal of reaching US$ 100 million in exports from the country,” added Amaratunga.
OSL take:
The success story of Sri Lanka’s Hela Apparels and its expansion into foreign countries is indicative of the strength and growth of the country’s private sector. The country’s strong bilateral and trade ties as well as the business conducive environment have helped many companies in the private sector post growth levels and profits despite facing pandemic challenges. The many trade agreements and concessions enjoyed by the country have helped many local businesses expand operations to other countries. Given the country’s ongoing development programme and the expanding business/investment opportunities as a result presents many lucrative opportunities for foreign businesses/investors. With the country also aiming at becoming an emerging business hub in the South Asian region, foreign businesses/investors could also look at forming partnerships or joint ventures with local businesses.
| Article Code : | VBS/AT/03032022/Z_3 |