Business
Sri Lanka’s apparel industry remains consistent in compliance and sustainability: WRAP Chief Avedis Seferian
Given the economic challenges faced by Sri Lanka and the implementation of new EU sustainability laws, companies are realizing the importance of streamlined compliance processes. Certification processes including Worldwide Responsible Accreditation Production (WRAP) offers sustainable solutions, reduces audit fatigue and provides comprehensive audit reports highlighting areas for improvement. The focus is on adopting independent certification, as legislative requirements increasingly mandate such initiatives and Sri Lanka’s apparel sector has made significant strides in embracing responsible manufacturing practices, with a focus on social compliance and sustainability.
As the world’s largest factory-based certification process for clothing, footwear and other sewn products, WRAP certifies facilities for compliance with the 12 WRAP Principles, which address safe, legal and ethical manufacturing processes. Sri Lanka has taken significant strides in embracing responsible manufacturing practices, with an impressive 27 companies and 112 individual factory sites currently holding the Worldwide Responsible Accreditation Production Certification.
In a recent interview, President and CEO of WRAP Avedis Seferian commended the resilience of Sri Lanka’s apparel industry amid the pandemic and unprecedented economic crisis, highlighting that companies under the certification programme have demonstrated unwavering commitment to social compliance and sustainability.
Following are excerpts from the interview:
Q1. With Sri Lanka navigating its way through the economic crisis and new EU sustainability laws gradually coming into effect, why is it important for companies to be certified and why now?
Given the current global economic challenges, the need for a streamlined and efficient due diligence process is paramount. Certification programmes like WRAP offer a more valuable proposition compared to buyers doing their own duplicative audits, by reducing the unnecessary audit fatigue, a term I am only too familiar with, experienced in the industry,. A WRAP certification provides a comprehensive audit report and points to the successful resolution of any non-compliances, making it a powerful proof of commitment to responsible sourcing. Legislative requirements are increasingly mandating the use of independent programmes, reinforcing the significance of organizations like WRAP. The focus is on communicating the importance of adopting independent certification rather than insisting on proprietary audits, as it saves time and resources while enhancing credibility. By embracing independent certification, brands and retailers can meet both their own standards and regulatory mandates, leading to a more efficient and compliant industry.
Q2. What progress has Sri Lanka’s apparel industry made in approaching ESG criteria as per WRAP’s observations?
The industry has done a great job of making responsible manufacturing a key part of its identity. Sri Lankan factories take social compliance and sustainability very seriously and have invested in promoting best practices. You can see this reflected in a number of ways: first, being consistent – many of the facilities currently holding a WRAP certificate in Sri Lanka have been with us a long time. Second, being proactive – while most factories will typically seek WRAP certification once a buyer requests one, many factories in Sri Lanka have gone for WRAP certification without a buyer request, as they believe WRAP is a benchmark for social compliance and sustainability. And third, going above and beyond minimum compliance – we routinely see Sri Lankan facilities instil extra worker-benefit practices, including things like employee welfare measures and women empowerment programmes. It has been very gratifying to see this positive approach to social responsibility become the norm in Sri Lankan factories. We consider it a very significant factor in the success the industry has had over the years and JAAF has done a great job in promoting Sri Lanka as a sourcing destination of choice.
Q3. What do you think are some of the common challenges faced by apparel manufacturers in achieving and maintaining compliance with ESG standards?
In my nearly 20 years of experience in this field, the most significant challenge we face worldwide is the prevailing short-term thinking among buyers and manufacturers. This mentality hinders the true potential for long-term planning and investment in vital areas like social responsibility and sustainability. The key difference lies in viewing something as a mere cost or as a valuable investment. An investment mindset considers the long-term returns associated with cost, while a short-term approach focuses on minimizing expenses.
For lasting improvements in social compliance and sustainability, an investment perspective is crucial, and this requires thinking beyond quarterly or immediate gains. However, fast fashion and public reporting pressures often deter businesses from making such investments due to delayed returns. Despite these challenges, Sri Lanka has garnered an excellent reputation in social compliance and sustainability, thanks to the efforts of JAAF and major manufacturers. The country’s facilities have demonstrated an above-average commitment to long-term thinking and compliance, laying the foundation for a virtuous upward spiral.
The global industry must overcome the prevailing short-term mindset and embrace a longer-term horizon to justify the necessary investments for sustainable and socially responsible facilities. This shift towards long-term thinking remains a universal challenge and is vital for creating a more sustainable and responsible future.
Q4: Moving forward, what are the key trends that apparel companies need to consider for compliance?
It is essential to have a clear sense of direction in their journey towards responsible practices. One of the key aspects to focus on, especially in the social space, is addressing forced labour concerns. Legislation on mandatory human rights due diligence, particularly in Europe, is driving attention to this issue, especially in supply chains involving migrant labour. Manufacturers need to ensure that all workers in their facilities are working voluntarily and this validation process must be independent, transparent and verifiable.
Traceability is another critical element, as laws and business realities increasingly demand visibility throughout the supply chain, even down to raw materials. Although this industry has faced challenges due to its fragmented nature, companies must strive to map out their supply chains to meet the growing demand for transparency from a wide range of stakeholders.
Furthermore, supply chain mapping will become crucial for addressing issues beyond forced labour including carbon emissions measurements. A holistic understanding of the supply chain will be vital in tackling these environmental concerns.
In summary, the immediate focus areas for companies’ compliance efforts should revolve around addressing forced labour concerns, ensuring transparency and traceability in the supply chain and taking proactive steps towards sustainable practices.
Q5. A significant overhaul to the labour laws is anticipated in Sri Lanka – the first since independence. With this labour reform, will WRAP reassess its social accreditation process for factories?
Regarding Sri Lanka’s latest labour law reforms, WRAP follows a dynamic and adaptive approach. For instance, if there are changes in the labour laws that dictate minimum salaries, WRAP’s protocol automatically updates its directives to reflect these new requirements. This flexibility ensures that WRAP remains compliant with the latest regulations without the need for a complete overhaul of the programme.
The concept of social responsibility is universal, but the specific actions required to be responsible vary from one location to another. Different regions have distinct labour laws and regulations, resulting in varying payment standards. WRAP acknowledges this and mandates that all entities under its certification comply with the applicable laws and regulations of their respective locations. Therefore, as labour laws evolve or change in Sri Lanka, WRAP seamlessly adjusts its protocols accordingly, always adhering to the most up-to-date legal requirements.
Q6. How is WRAP working collaboratively with buyers and manufacturers to address ‘audit fatigue’?
We’ve been actively addressing audit fatigue from both ends of the supply chain – assisting manufacturers while engaging in a robust dialogue with buyers. Our efforts have focused on helping buyers understand that insisting on their own audits is not the most effective approach. With WRAP, they can receive independent, efficient and credible audits, saving valuable time and resources.
We also aim to explain the benefits of relying on the WRAP report and certification, streamlining data delivery according to the buyers’ preferences through technology.
Overall, we believe that things are progressing in the right direction, though it’s an ongoing journey. We are committed to fighting the scourge of audit fatigue to enable manufacturers and buyers alike to strive towards more efficient and sustainable practices under a new supply chain due diligence paradigm where brands and retailers utilize independent, credible social compliance certification programs like WRAP instead of forcing production facilities to undergo duplicative audits by insisting on their own proprietary code audits.
Business
Constituent Change in the S&P Sri Lanka 20 Index
The Colombo Stock Exchange (CSE) announces the following change in S&P Sri Lanka 20 index constituents made by S&P Dow Jones Indices at the 2026 Mid-Year rebalance.
The exclusion and inclusion as announced by S&P Dow Jones Indices, effective from 22nd June 2026 (after the market close of 19th June 2026) are presented below.
The S&P SL 20 index includes the 20 largest companies, by total market capitalization, listed on the CSE that meet minimum size, liquidity and financial viability thresholds. The constituents are weighted by float-adjusted market capitalization, subject to a single stock cap of 15%, which is employed to reduce single stock concentration.
The S&P SL 20 index has been designed in accordance with international practices and standards. All stocks are classified according to the Global Industry Classification Standard (GICS®), which was co-developed by S&P Dow Jones Indices and MCSI and is widely used by market participants throughout the world.
To be eligible for inclusion, a stock must have a minimum float-adjusted market capitalization of 500 million Sri Lankan rupees (Rs), a six-month median daily value traded of Rs 0.25 million and have positive net income over the 12 months prior to the rebalancing reference date. For information, including the complete methodology, please visit: www.spindices.com
Effective from 22nd June 2026 the stocks in the S&P Sri Lanka 20 in alphabetical order are as above.
Business
Teejay Group navigates industry headwinds with financial strength and strategic focus
The Teejay Group recorded revenue of LKR 60.04 billion during the period, reflecting a 10% year-on-year decline, primarily due to continued softness in global textile demand. This performance was largely impacted by reciprocal tariffs imposed by the United States, intensified pricing pressures across key markets, and the resulting decline in volumes, all of which collectively weighed on topline growth.
Group Gross Profit declined by 36% year-on-year to LKR 5.02 billion, mainly attributable to lower production volumes, underutilization of plant capacity, sustained pricing pressures, and an unfavorable product mix. Together, these factors adversely affected margin performance amid a challenging operating environment.
The Group reported a Profit After Tax (PAT) of LKR 54.7 million, representing a 98% year-on-year decline. This was primarily driven by higher rupee-denominated costs and non-recurring items, provision for doubtful debts, and restructuring costs associated with right-sizing initiatives.
Ajit Gunewardene, Chairman of the Teejay Group said, “The year was marked by persistent global demand softness and pricing pressures, which impacted results. Despite this, we focused on operational efficiency, cost discipline, and strengthening our financial resilience. These actions position the Group to navigate ongoing uncertainty while remaining committed to long-term value creation for our shareholders.”
Despite these near-term challenges, the Teejay Group continues to maintain a strong financial position, supported by disciplined working capital management and a robust liquidity base. As at 31 March 2026, cash and cash equivalents stood at LKR 8.3 billion, while the Group’s net asset base increased by 3% year-on-year to LKR 32.4 billion, reinforcing the resilience of its balance sheet.
Business
Fairfirst celebrates 7 years of supporting the Sri Lanka Police K9 Unit
Fairfirst Insurance has once again partnered with the Sri Lanka Police K9 Unit, continuing its support for the seventh consecutive year. This partnership reflects the company’s long-standing commitment to giving back to the community.
Through this initiative, Fairfirst will provide comprehensive insurance coverage for the highly trained canines attached to the Sri Lanka Police K9 Unit. These dogs play a critical role in supporting police operations across the country, assisting with crime detection, narcotics investigations, search and rescue missions, and public safety efforts.
As a company that believes business should create a meaningful impact beyond insurance, Fairfirst remains committed to initiatives that support communities and recognise the vital contributions of those who help keep society safe. This shared commitment to protection and responsibility continues to drive the company’s long-standing partnership with the Sri Lanka Police K9 Unit.
Commenting on the continued partnership, Ravishankar Wickneswaran, CEO of Fairfirst Insurance, said, “It is a privilege for us to continue supporting the Sri Lanka Police K9 Unit for the seventh consecutive year. These dogs serve the country with incredible discipline and loyalty, often in challenging situations. Supporting their wellbeing is one small way for us to give back, and it reflects the FairfirstWay of standing by those who protect and serve our communities every day.”
Fairfirst looks forward to continuing this partnership and contributing to the wellbeing of the Sri Lanka Police K9 Unit in the years ahead.
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