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
HNB Life reports 54% surge in gross written premium for Q1 2026
HNB Life PLC has delivered a robust performance in the first quarter of 2026, recording a 54% year-on-year increase in Gross Written Premium (GWP) to Rs. 7.01 billion, up from Rs. 4.55 billion in Q1 2025. Net Written Premium rose by a matching 54% to Rs. 6.69 billion, reflecting strong new business generation and policy persistency.
Total net income grew 39% to Rs. 8.69 billion, supported by solid underwriting and steady investment income, including Rs. 2.05 billion from interest and dividends. The company’s balance sheet remains resilient, with total assets reaching Rs. 71.38 billion and the Life Insurance Fund expanding to Rs. 52.55 billion.
Profit after tax stood at Rs. 0.21 billion, though profitability was tempered by a low-interest rate environment and fair value fluctuations in the equity portfolio. No surplus transfer from the Life Insurance Fund has been made yet, as this typically follows year-end valuation.
Chairman Stuart Chapman attributed the momentum to the company’s recent rebranding and its strategic alignment with the Hatton National Bank Group. CEO Lasitha Wimalaratne emphasized disciplined execution, digital enablement, and enhanced distribution as key drivers.
HNB Life, rated ‘A’ (lka) by Fitch, marks 25 years as one of Sri Lanka’s fastest-growing life insurers, operating 79 branches nationwide. The company remains well-positioned for sustainable long-term growth.
Business
ADB Samarkand spirit demands immediate radical shift in Sri Lanka national mindset
The atmosphere in Samarkand, Uzbekistan, during the 59th Annual Meeting of the Asian Development Bank (ADB) was nothing short of electric. Walking through the Silk Road Samarkand complex – a venue steeped in the history of ancient global trade – one could easily feel the weight of past legacies. “More pressing, however, was the palpable urgency of the future, as the halls of the Congress Center resonated with strategic discussions on ‘Asia’s Second Growth Leap.'” The global narrative was unmistakable: the talk of post-crisis recovery was no longer relevant. For Sri Lanka, the echoing message from Samarkand was both a warning and an invitation: the transition from an aid-recipient mindset to a competitive global partner is no longer a choice. It is our only survival mechanism.
While delegates from across the region shared aggressive blueprints for economic acceleration, the absence of Sri Lankan policymakers was a stark reality. Other Asian nations did not speak of mere “potential”; they spoke of velocity.
In Samarkand, the ancient gateway of the Silk Road, the irony was impossible to ignore. As regional leaders debated the deployment of an Interconnected Pan-Asia Grid to revolutionise energy integration, discussed how deep capital markets must drive development, and outlined strategies to scale up investments from critical minerals to advanced manufacturing value chains, a troubling realisation set in. The world is moving at lightning speed on digital highways for inclusive growth, yet Sri Lanka remains haunted by the ghost of political and bureaucratic “dilly-dallying.”
The true “Samarkand Spirit” demands an immediate, radical shift in our national mindset. Sri Lanka must aggressively shed its “crisis” label. The high-level discourse in Uzbekistan focused entirely on how emerging economies can stop begging for economic concessions and start delivering regional solutions.
Whether the focus was on maximising opportunities within the Regional Comprehensive Economic Partnership (RCEP) or financing large-scale offshore wind projects, the core directive for our nation remained constant: Sri Lanka must stop looking for a hand-out and start building an economic bridge.
The ADB has laid out the catalytic pathway for the Asia-Pacific’s second growth phase. The infrastructure, the capital, and the frameworks are ready. The burning question for Sri Lanka’s policymakers is simple: Are we ready to execute, or are we content with stagnation?
Leaving Uzbekistan, the takeaway for our leadership is vivid and uncompromising. Decisive action is the sole currency of the new Asian century.
To bridge the gap between the historic Silk Road and the strategic Indian Ocean, Sri Lanka must:
Accelerate Digitisation: Swiftly overhaul bureaucratic frameworks to create a seamless, trusted digital economy.
Integrate Energy Grid Connectivity: Boldly plug into the regional grid networks discussed at the summit to resolve long-term energy insecurity.
Plug into Global Supply Chains: Pivot aggressively toward high-value manufacturing and regional trade agreements.
The 59th ADB Annual Meeting proved that the international community is ready to partner with a competitive, forward-thinking Sri Lanka. We possess the geographic location and the inherent talent. Now, post-Samarkand, we have the definitive roadmap.
The “Second Leap” of the Asia-Pacific region is already in motion. The ultimate test for Sri Lanka’s policymakers is whether they will lead the country into this dynamic new era or leave us observing fruitlessly from the sidelines.
By Sanath Nanayakkare
Business
First drop in new business in three years: The hidden warning in Sri Lanka’s April PMI
Here is the point that carries more weight than the headline PMI figures released by the Central Bank of Sri Lanka. While much of April’s contraction in manufacturing (42.6) and services (46.7) was dismissed as seasonal — the Sinhala and Tamil New Year holidays, fewer working days, fading festive demand — the rupture in new business flows tells a different, more troubling tale.
April 2026 marked the first month since April 2023 that services sector new business contracted. Not a slowdown. Not a plateau. An outright decline. Nor was it narrow in scope. The deterioration cut across transportation of goods, insurance, wholesale and retail trade, and accommodation, food and beverage service activities.
The Island Financial Review asked an independent analyst for his take. Here is what he said.
“These are not fringe sub-sectors; they are the arteries of Sri Lanka’s domestic economy. Why does this matter beyond the seasonal logic? Because new business is a leading indicator. What falls today in new orders will show up tomorrow in production, employment and stock purchases. April’s drop in new business — the first in three full years — suggests that May’s anticipated recovery may be shallower than hoped, and that a return above the neutral 50 PMI threshold before June is unlikely unless geopolitical tensions ease sharply.”
“Compounding the concern, the decline in new business was not an isolated Sri Lankan phenomenon. It arrived alongside two external shocks: rising energy prices, which hammered transport and personal services, and the ongoing Middle East conflict, which lengthened supplier delivery times and added logistical friction.”
“To be sure, expectations over the next three months remain positive. Firms hope for a stabilisation following the end of the war. But the first decline in new business in three years is a quiet alarm. Seasonal patterns explain April’s production dip. They do not explain why customers stopped placing new orders. For Sri Lanka’s policymakers and business leaders, that is the story to watch in May,” he said.
By Sanath Nanayakkare
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