Business

Eravur Fabric Park could transform sustainable textile manufacture in Sri Lanka

Published

4 years ago

2021/10/20

Since the first announcement in June 2020, expectations have been high on the potential of the Eravur Fabric Processing Park to catalyze a new era for Sri Lankan textile and apparel manufacture.

Supported through the Ministry of Industry and Commerce and the Board of Investment (BOI) of Sri Lanka, working in close collaboration with the Joint Apparel Association Forum (JAAF), the apex body of the apparel industry in Sri Lanka, the vision for Eravur is beginning to take shape.

Of the allocated approx 300 acres of land, fifty have been allocated for the Park’s maiden investment of US$ 35 million to establish a state-of-the-art fabric mill. Negotiations are also underway with two international companies to infuse mega investments for the remainder. The Park is estimated to attract a cumulative investment of US$ 300 million. The zone is also seeking further investments towards Dyeing, Washing, Knitting, Weaving, and other associated and ancillary activities.

Cabinet approval for the Zone’s classification under the Strategic Development Projects Act was also secured, enabling the extension of tax and other relief and incentives to investors.

Rapid progress towards vertical integration

“We would like to see the first company commence commercial operations in the next 6 months to 1 year,” stated BOI Chairman Sanjaya Mohottala. “We have been very aggressive on timelines because of the clear consensus on the nationally significant value that the Park can generate. At present, all land has been demarcated, and water and electricity supply are being finalized. In excess of half the commercial land has been allocated or reserved, and we are seeing great demand. There is clear recognition locally and internationally as to the immediate potential. If necessary, we are able to expand the zone even further.”

Leveraged in support of Sri Lanka’s highly developed apparel manufacturing sector, which has steadily benchmarked itself on global standards for ethical, sustainable production and high levels of technical and technological expertise, Eravur’s promoters also see the project as an opportunity for Sri Lankan-made apparel to take global leadership on sustainability in its most holistic sense.

Mohottala explained further that the most immediate benefit from the Park’s establishment will be in the cost advantages and enhanced economies of scale gained through capacity expansion and vertical integration of domestic supply chains.

Currently, Sri Lanka has approximately 300 apparel manufacturing facilities across the country. By contrast, it has only 7 textile and raw material factories capable of producing fabric for export, and for conversion into garments for export. At its peak, Sri Lanka imported over 250,000 MT of fabric both for export-oriented apparel manufacturing and for local consumption in 2019, at a cost of US $ 2.2 billion.

In the context of unprecedented disruptions across global supply chains in particular and persistent commodity and currency volatility, increased availability of high quality raw materials will enable an immediate and drastic reduction in raw material costs, while also conserving foreign currency.

Increased domestic production of textiles also translates to a higher percentage of domestic value. If that threshold increases from its current 52% to 65%, it qualifies for a larger proportion of Sri Lankan exports for zero-duty benefits under GSP Plus1.

The culmination of a pioneering national journey in sustainability

The economic argument in favour of investing in Eravur is bolstered by its potential to also be the most sustainable venture of its kind in the entire Asian region, with local stakeholders having already committed to establishing extensive renewable energy facilities, water recycling facilities, science-based targets, and circular business models.

At a macro-level, increased local production capacity will contribute significantly to all these targets by reducing the end-to-end length of Sri Lanka’s apparel supply chains. This in turn enables tighter backward integration and lower carbon emissions.

Taking a cue from the Sri Lankan textile and apparel’s industry’s outstanding achievements on environmental sustainability to date, the Zone is being designed from the ground-up to facilitate and incentivize sustainability in every facet of its operations. In terms of fabric processing, the main focus is on wastewater treatment.

Mohottala continues: “Sri Lanka’s environmental standards for industries are quite stringent, especially compared with regional competitors. A key feature of the Zone will be its central wastewater treatment facility with a sea outfall, which will require a high standard of treatment. Fortunately, we already have strong expertise available locally, with many of Sri Lanka’s textile producers having established facilities on par with global best practices on wastewater treatment. We have used this to our advantage by calling in the local industry’s technical experts and drawing on their pioneering experiences to optimize wastewater treatment protocols at Eravur.”

Adding that this will be one of many positive attributes all stakeholders downstream of the textiles produced at the Zone can lay claim to, Mohottala says, “With the greater localization of production, we also gain improved oversight and control over environmental standards within the Zone. This also enables greater transparency, traceability, and accountability across the supply chain, which in turn will confer preferable competitive advantages to Sri Lankan apparel exporters. In addition, this will empower brands and retailers to make clear and credible claims to genuine sustainable sourcing.”

An end-to-end opportunity

Another significant advantage for Eravur is that it is purpose-built with the most advanced environmentally friendly technology available. This will also promote efficiency in energy and water consumption, as well as additional infrastructure for recycling and recovery of water used in production, for which the BOI aims to provide investors with additional incentives.

Notably, Eravur also enjoys a high level of solar irradiance and consistent high-wind conditions, making any manufacturing facility established in the area, ideally suited for solar and potentially, wind turbine power generation.

“Augmentation of the Zone’s energy requirements with plentiful renewable energy will enable cost savings on the energy-intensive aspects of wastewater recycling. Given the consistent annual reduction in the cost of solar and wind energy, the conditions at Eravur are another unique attraction for investment into the Zone, and potentially enables the entire supply chain to utilize global incentivizes around responsible and sustainable production,” Mohottala said.

In addition to the wastewater treatment protocols, the Zone will also include a sludge treatment facility, with further trials already underway for responsible disposal. These include tests using micro-algae to breakdown sludge, as well as utilizing sludge to fuel furnaces and as bricks with a bio-mat mask.

The final and potentially most vital contribution which the Eravur Fabric Processing Zone is the empowering impact it will have on the lives of Sri Lankans in Batticaloa. At present, the district has an estimated population of 621,887, of which, an estimated 60,912 individuals are below the poverty line. As at 2019 – prior to the pandemic – unemployment in the region stood at 6.4%

“With the development of the Zone, we will be able to create thousands of stable, well-paying direct and in-direct jobs. This could prove to be one of the most transformative developments to take place in the Eastern Province in recent history,” Mohottala concluded.

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Business

Shinkansen Moment for Sri Lanka: Raghuraman calls for radical export pivot as Japan backs regional value chain

Published

2 hours ago

2026/02/20

Thilina Walpola

Sri Lanka must engineer a “Shinkansen effect” in its export strategy or risk being left behind in a rapidly reorganising global economy, warned Indo Lanka Chamber of Commerce and Industry President M. Raghuraman, setting the tone for a high-powered policy dialogue at the Japan–Sri Lanka Business Cooperation forum held on Monday at the JAIC Hilton.

Raghuraman’s call for radical reform came amid a broader push by Japan and Sri Lanka to reposition the island as a strategic node in a regional industrial and logistics corridor linking India, Japan and the wider Global South.

The event, organised by Japan External Trade Organization (JETRO) and the Japan-Sri Lanka Business Co-Operation Committee, brought together policymakers, industry leaders and Japanese investors to map out a new export-led growth model.

“Sri Lanka cannot afford incremental change,” Raghuraman said. “We need a Shinkansen effect — a radical transformation in how we plug into regional and global value chains.”

With India projected to expand its middle-income population from 430 million to over 700 million by 2030, Raghuraman described the subcontinent as a “pot of gold just 22 miles away.” Yet Sri Lanka, he cautioned, has failed to fully capitalise on its proximity, particularly through delayed negotiations on upgrading existing trade arrangements into a more comprehensive economic partnership.

Echoing this regional logic, Toyokazu Nagamune, Regional Representative for South Asia at Japan’s Ministry of Economy, Trade and Industry (METI), framed the corridor within Tokyo’s evolving economic security doctrine.

“With rising geopolitical risks and protectionism, Japan is diversifying supply chains,” Nagamune said.

“It is neither realistic nor cost-efficient to localise entire supply chains within a single country. That is why regional cooperation — especially between India and Sri Lanka — is critical.”

Japan is actively encouraging investment in strategic sectors such as semiconductors, batteries, solar panels and rare earth components in India. But Nagamune stressed that Sri Lanka has complementary strengths — from high-purity rubber to skilled electronics assembly — that can integrate into these value chains.

He cited practical examples: Sri Lanka supplying rubber components for compressors manufactured in India; high-purity silicon inputs for solar cell production; and value-added intermediate goods that enhance cost competitiveness across the corridor.

Secretary to the Ministry of Trade, Commerce, Food Security and Co-Operative Development K.A. Vimalenthirajah acknowledged that policy recalibration is overdue.

“We need to create an enabling environment for manufacturers and shift from merely promoting trading entrepreneurship,” he said. “Sri Lanka must position itself as a preferred destination facilitating both investors and exporters.”

Vimalenthirajah identified three priorities: expanding physical connectivity — including ongoing capacity enhancements at the Colombo Port; strengthening “soft enablers” such as comprehensive free trade agreements and mutual recognition of standards; and institutional reforms including result-oriented single-window systems for trade and investment.

Confidence-building through policy consistency, he added, is paramount to attracting long-term capital.

From the Japanese private sector perspective, Takayuki Himeno, Chief Research Manager at Mitsubishi Research Institute, Inc., underscored that infrastructure alone will not secure Sri Lanka’s ambitions as a logistics hub.

“Sri Lanka’s strategic location is an advantage, but it is no longer enough,” Himeno said. “The challenge is fragmentation. Ports, airports and industries operate in silos. Physical infrastructure must be synchronised with data connectivity.”

Drawing on MRI’s two decades of experience managing Japan’s national single window and customs systems, Himeno pointed to digital integration — including port community systems and streamlined customs processes — as essential to reducing lead times and boosting export competitiveness.

Moderating the discussion, Ruvini Fernando, Head of Financial Advisory at Deloitte Sri Lanka, framed the conversation within Sri Lanka’s urgent need to diversify exports and identify new product lines and markets.

“When Sri Lanka is looking at development through export promotion and new market access, this is a very timely discussion,” she observed.

The strategic thrust emerging from the forum was clear: Sri Lanka’s small domestic market — just over 21 million people — should not be seen as a limitation but as a catalyst to integrate outward into regional production networks.

For Japan, the message is about resilience and cost-competitive diversification. For India, it is about scaling manufacturing depth. For Sri Lanka, it is about moving decisively from raw material exports to value-added components — and from policy inertia to execution.

By Ifham Nizam

Business

CSE hits intra-day high in the wake of US-Iran tensions

Published

2 hours ago

2026/02/20

Thilina Walpola

CSE closed after its broader index hit an intra-day high of 24,000 yesterday due to tensions in US-Iran relations and a dip in investor sentiment.

The All Share Price Index closed at 0.21 percent, or 49.77 points, at 23,870.07 while the S&P SL20 closed down at 0.28 percent, or 19.19 points, at 6,731.31.

Market turnover was Rs 4.9 billion with six crossings. Some of those crossings were reported in Hayleys, where 500,000 shares crossed to the tune of Rs 120 million; its shares traded at Rs 240, Distilleries 2 million shares crossed to the tune of Rs 119 million; its shares sold at Rs 59.50, Dipped Products 1.4 million shares crossed for Rs 80 million; its shares sold at Rs 57, Dialog Axiata 2.25 million shares crossed to the tune of Rs 73.6 million; its shares sold at Rs 32.70, JKH 2.4 million shares crossed to the tune of Rs 55.4 million, its shares traded at Rs 22.80.

Market was driven by interest across diverse sectors with both heavyweights and penny stocks drawing attention, brokers said.

Top negative contributors to the ASPI were Sampath Bank (down Rs 1.75 at 162.25), Colombo Dockyard (down Rs 4.75 at 156.50), Dialog Axiata (down 0.60 cents at Rs 32.70 ), DFCC Bank (down Rs 2 at 157) and Commercial Bank (down Rs 1 at 233). During the day 276.9 million share volumes changed hands in 39867 transactions.

It is said that top contributors to the turnover were Dialog, JKH, Acme, Renuka Hotels, Colombo Dockyard, People’s Leasing and Finance and Asia Siyaka.

Manufacturing sector,especially JKH, performed well. The telecommunications sector, especially Dialog, also performed well.

Yesterday the rupee was quoted at Rs 309.30/35 to the US dollar in the spot market , improving from Rs 309.35/40 the previous day, dealers said, while bond yields edged up slightly.

The telegraphic transfer rates for the American dollar were 305.9000 buying, 312.9000 selling; the British pound was 411.8379 buying, and 423.2855 selling, and the euro was 358.4993 buying, 370.0205 selling.

By Hiran H Senewiratne

Business

Ceylinco Life wins unrivaled global recognition with 12th straight World Finance award

Published

2 hours ago

2026/02/20

Thilina Walpola

Stands with world’s best after receiving ‘Best Life Insurer in Sri Lanka’ title in respect of 2025

Ceylinco Life has once again been recognised as the Best Life Insurer in Sri Lanka by World Finance, securing the prestigious international accolade for an unprecedented 12th consecutive year in respect of 2025.The award positions Ceylinco Life among the world’s most respected life insurance companies, placing it in the distinguished company of global winners such as Sun Life (Canada), Acenda (Australia), China Pacific Insurance (China), CNP Assurances (France), The Talanx Group (Germany), Max Life Insurance (India), Nippon Life Insurance Company (Japan), Swiss Life (Switzerland), Aviva (UK) and MassMutual (USA).

Announcing its 2025 Insurance Industry Awards, World Finance said resilience continues to define the global insurance sector, as firms navigate climate-related claims, rising cyber risks and the rapid evolution of digital underwriting. The magazine noted that this year’s winners exemplify a rare balance between innovation and reliability, earning policyholder confidence while redefining responsible insurance in an increasingly digital age.

Commenting on this latest accolade, Ceylinco Life Executive Chairman R. Renganathan said: “Sustaining this level of international recognition over twelve consecutive years reflects the discipline of our operating culture and the clarity of our long-term strategy. Our focus has always been on building a life insurance business that is resilient across cycles, uncompromising on governance, and deeply aligned with the evolving needs of our policyholders and the communities we serve.”

The World Finance award recognises Ceylinco Life as an organisation that consistently demonstrates operational excellence, financial strength and a strong commitment to customer service. Winners are selected following a rigorous assessment of multiple performance indicators, including underwriting efficiency, policy maintenance processes, exposure to risk, customer retention, claims settlement timelines, new customer acquisition and financial stability measured by premium income, market share, life fund growth and profitability.

The judging process is conducted by a panel representing more than 230 years of combined financial and business journalism expertise, supported by a dedicated research team. Reader insight and experience also play a role in nominations, while the panel is required to avoid bias relating to company size or market depth, enabling a fair evaluation across geographies and business models.

World Finance, established in 2007, is a print and online magazine providing comprehensive coverage and analysis of the global financial industry, international business and the world economy. Its awards programmes are designed to identify and recognise the strongest performers in each market through a structured and transparent evaluation process.

Ceylinco Life has been the market leader in Sri Lanka’s life insurance industry for 21 consecutive years, offering innovative insurance solutions that protect and de-risk the ambitions of policyholders. In 2025, the Company was ranked the most valuable insurance brand in Sri Lanka and the 22nd most valuable brand overall by Brand Finance. It was also voted the People’s Life Insurance Service Provider of the Year for the 19th consecutive year in 2025, reaffirming its position as a brand trusted by millions.

The Company has additionally been adjudged Sri Lanka’s Brand of the Year twice within the past five years and has been recognised among the 10 Most Admired Companies in Sri Lanka by the International Chamber of Commerce Sri Lanka (ICCSL) and the Chartered Institute of Management Accountants (CIMA).