Business
Eravur Fabric Park could transform sustainable textile manufacture in Sri Lanka
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.
Business
Successful government securities auctions anchor yield curve amid subdued trading
The secondary market yield curve remained broadly stable during the past week as subdued trading activity persisted around the Treasury Bond auction. Meanwhile, weighted average yields at the weekly Treasury Bill auction recorded declines across all tenors, First Capital Research stated in its latest weekly report.
According to the report, secondary market activity opened on a cautious note with selling interest emerging ahead of the T-Bond auction, causing a slight upward adjustment in yields amid moderate trading volumes. As the week progressed, investor participation remained muted, with market participants largely staying on the sidelines in anticipation of the auction, keeping the yield curve broadly unchanged.
Following the successful completion of the bond auction, the market witnessed mixed sentiment, with selling pressure concentrated at the short end and buying interest emerging in longer-dated maturities. However, activity remained subdued, and the yield curve largely held its ground through the weekend.
At the Treasury Bond auction held on July 13, 2026, the Public Debt Management Office (PDMO) successfully raised the full offered amount of LKR 150.0 billion. This comprised LKR 70.0 billion through the 2030 maturity, LKR 50.0 billion through the 2034 maturity, and LKR 30.0 billion through the 2037 maturity, at weighted average yields of 11.57%, 12.04%, and 12.58%, respectively.
Similarly, at the weekly Treasury Bill auction held on July 15, 2026, the PDMO raised the full offered amount of LKR 120.0 billion. The 3-month, 6-month, and 12-month bills raised LKR 55.0 billion, LKR 35.0 billion, and LKR 30.0 billion, respectively. Weighted average yields declined across all tenors, with the 3-month bill easing by 8 basis points (bps) to 10.13%, the 6-month bill by 3 bps to 10.27%, and the 12-month bill by 1 bp to 10.20%.
On the external front, the Sri Lankan Rupee (LKR) depreciated against the US Dollar, closing the week at LKR 336.3/USD compared to LKR 334.7/USD seen previously. Market liquidity within the banking system expanded significantly, starting the week at LKR 125.89 billion and closing higher at LKR 157.19 billion.
Thus the market data may highlight a clear divergence between short-term liquidity comfort and long-term caution, which points toward a gradual steepening of the yield curve in the near term.
The emergence of buying interest in longer-dated maturities (2034 and 2037) shows that institutional investors are eager to lock in double-digit yields while liquidity is high. This institutional support will likely place a temporary ceiling on long-term rates.
The mild depreciation of the rupee (moving to LKR 336.3/USD) acts as a cautionary counter-signal. If the currency continues to face pressure, it could limit how far short-term yields can fall, flattening the curve back out.
Business
CSE sees lack of investor participation, market turnover remains thin
The Colombo Stock Exchange (CSE) witnessed a quiet trading session on Friday, with the benchmark All Share Price Index (ASPI) edging marginally lower down by 42.16 points or 0.20% to close at 21,405.41.
Market turnover remained thin, coming in at Rs. 0.72 billion (approximately US$ 2.2 million), reflecting a general lack of investor participation as most sectors encountered downward pressure.
A total of 31.94 million shares changed hands across 13,397 trades, resulting in a negative market breadth where declining counters outpaced gainers 127 to 91. Blue-chip counters Sampath Bank PLC (SAMP), Lanka IOC PLC (LIOC), and John Keells Holdings PLC (JKH) anchored the day’s market turnover, while a notable off-market crossing was recorded in Chevron Lubricants Lanka PLC (LLUB). Trading volume in SAMP alone was highly concentrated, accounting for 12% of the day’s total turnover.
Sector performance remained mixed, with the Banking sector emerging as the most actively traded, posting a modest gain of 0.18%. The Health Care Equipment & Services sector secured the spot as the day’s best performer, rising by 0.55%.
Conversely, the Household & Personal Products sector faced the steepest decline, dropping 1.95% to finish as the worst-performing sector of the day. In terms of individual movements, Blue Diamonds Jewellery Worldwide PLC [Voting] (PINS.N) led the gainers, advancing by 6.11%, while Agstar PLC (AGPL.N) emerged as the top loser, shedding 9.09%.
By Hiran H. Senewiratne
Business
Going Green in Kirindiwela: Ceylinco Life begins work on 36th company-owned building
Ceylinco Life has commenced construction of its 36th company-owned branch building with the laying of the foundation stone for a new eco-friendly edifice in Kirindiwela, reaffirming the life insurance market leader’s continued investment in sustainable infrastructure and enhanced customer service.
The ceremony was attended by Ceylinco Life Chairman Mr R. Renganathan, Managing Director/CEO Mr Thushara Ranasinghe, members of the Board of Directors and senior management of Ceylinco Life, alongside valued customers and distinguished invitees from the Kirindiwela area.
Driven by its commitment to delivering superior service in a welcoming and customer-centric environment, Ceylinco Life has consistently invested in purpose-built branch buildings that serve as flagship locations. The Kirindiwela branch will join a network of 35 such company-owned buildings currently in operation across the country, each designed to offer elevated standards of service and modern facilities.
The new building will be constructed on company-owned land and developed in line with the Company’s green building concept, incorporating environmentally responsible design principles and energy-efficient technologies.
Spanning a floor area of 3,440 square feet, the Kirindiwela branch will utilise locally developed prefabricated construction technology from the National Engineering Research and Development Centre (NERD). The building is planned to operate on a 100 per cent self-sufficient solar electricity system, eliminating reliance on the national grid.
Key sustainability features of the proposed building include natural ventilation design, a topography-friendly layout, a green patch with grass grown in between interlocking blocks, energy-efficient air conditioning and lighting systems, and a rainwater harvesting facility. A dedicated Sewerage Treatment Plant (STP) will recycle wastewater for toilet flushing and gardening, while the company will practice the green concept of ‘Reuse’ in air-conditioning and electronic equipment, further minimising environmental impact.
-
Features6 days agoPrison riots and politics: NPP’s biggest challenge and Sri Lanka’s biggest opportunity
-
Features3 days agoDirty Money
-
Editorial6 days agoMuch ado about crime: Fish or cut bait
-
Features6 days agoMore on Saudi Arabia: ARAMCO and beyond
-
Sports6 days agoThe banker who rescued Sri Lankan cricket
-
News1 day agoMoney laundering case against Yoshitha, fixed for pre-trial conference
-
Midweek Review3 days agoThe sordid tale of theft and tragedy at Finance Ministry
-
Latest News4 days agoOil prices hit 1-month high as US-Iran attacks dim Strait of Hormuz outlook
