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,"
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
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.