Eskimo Fashion goes to Punani

Eskimo Fashion Knitwear will expand its current level of operation by opening a factory in the Eastern Province.

It is the second company to venture into the apparel sector in this province in keeping with the favourable trend in the apparel industry.

The factory at Punani will be ready for production from June this year with an investment of Rs 100 million.

"The apparel industry is facing competitive times and a general consolidation could be seen in the sector," Eskimo Fashion Knitwear Managing Director Manik Santiapillai told Daily News Business.

"Eskimo Fashion is optimistic about the future of its niche market. We have a good track record and have 100 buyers at present which ensure continuous export volumes. The expansion is market driven," he said. The company is one of the first GCEC approved companies located in Negombo. Its original investment was Rs 105 million and its value has gone upto around Rs 2.5 billion at present. It also operates a factory at Pallekelle with an investment of Rs 35 million.

The scheduled factory at Punani was due to being optimistic about the way the business is going on and driven by the concessions including tax holidays provided for BoI companies. It entered in to an agreement with the BoI in April last year.

"The land allocation procedure should be expedited to facilitate and encourage more investment as it takes a longer period at present. There is a need for a centralized authorization to fast track the projects," he said.

The company expects the turnover to increase by 10 to 12 percent during this year. It imports yarn from countries such as India and Pakistan and also purchases 10 to 15 percent of the requirement from local suppliers.

The imported yarn is knitted, dyed and sewed adding value to the end product. These products come more under accessories.

The total employment generation of all three factories is over 2,500. "We continue on a mixed strategy of finding buyers and having a mix of strategic partners and others.

The increase in prices in China has provided an opportunity for us and we need to capitalize on this. However, Eskimo Fashion has built up its integration with customers and put in lot of effort and time on maturing relationships," he said.

The industry friendly budget proposals have a positive impact on the growth of the sector. The US $ 3 billion industry will be able to maintain the same level this year too. However, the exchange rate will be a deciding factor.

SJ