Sri Lanka’s Hela Clothing eyes Colombo Stock market listing to fund expansion in Africa
Sri Lanka’s apparel maker, Hela Clothing, has reportedly planned an initial public offering on the Colombo Stock Exchange (CSE) within 12 months to raise capital for entry into North Africa and the expansion of its East African operations.
Bloomberg has reported that the Sri Lanka-based manufacturer for PVH Corp. – the parent company of fashion brands Tommy Hilfiger and Calvin Klein – is to offload a 20% stake for US$ 20 million.
This observation was made by the Company’s CEO Dilanka Jinadasa in an interview.
Hela manufactures underwear, sleepwear and children’s apparel. An entry into Egypt’s US$ 1 billion apparel market will help to boost the company’s value by about 11% to US$ 250 million by the end of the financial year in March, Jinadasa has been quoted as saying.
Hela is to set up shop in the North African nation in the first quarter of 2022 and work with existing manufacturers, leveraging the country’s fabric mills, lace suppliers and mature supply chain to reduce lead times.
“You can ship to Europe between three to seven days, and to the US within about 10 to 12 days,” Jinadasa has stated.
According to the news report, Hela is scaling up its intimates business, which accounts for 70% of group revenue, and added more than 2,000 employees to facilities in Ethiopia and Kenya despite the coronavirus pandemic while planning to expand its Kenyan facility, which churns out men’s underwear, and boost bra-making at its four-year-old factory in Ethiopia.
Bras have traditionally been made in more skilled markets like Sri Lanka, China and Cambodia, where apparel-making has been in existence for as long as half a century, the CEO has said. “Bringing that technical knowledge to Ethiopia was a major challenge, but one that we have kind of executed successfully.”
The news report has further stated that nearly 60% of the company’s revenue is generated outside Sri Lanka, and East Africa accounted for over US$ 100 million last year.
“Everyone working from home wanted to be in comfortable clothing,” Jinadasa has said.
The expansion of Sri Lanka’s Hela Clothing in the international market is indicative of the strength and growth of the country’s private sector. It also shows the potential for businesses to grow in the country. Sri Lanka is fast becoming a business hub in the South Asian region given it’s geographical positioning in the Indian ocean and the many trade agreements as well as trade concessions enjoyed by the country. Sri Lanka’s ongoing development programme and the continuous improvement in the ease of doing business environment have further extended the country’s attractiveness as a business hub in the region. Foreign businesses/investors could therefore confidently explore business/investment opportunities in Sri Lanka while also looking at forming partnerships/joint ventures with local companies.
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