Coats Thread upbeat on Sri Lanka apparel prospects
Giles Watkins, managing director, Coats Thread Exports
Coats Thread Exports, the largest domestic producer of thread for Sri Lanka's export apparel makers, says the local industry will most probably weather the economic slowdown in major western markets without too much pain.
Giles Watkins, who took over as managing director of UK based Coats Plc's Sri Lanka operations in December 2010, told just-style that Sri Lanka's garment industry has a number of strengths that will help see it through the hard times that lie ahead.
Watkins is confident that some business outflows from China will continue to move into Sri Lanka. On top of these new inflows, Sri Lankan apparel factories are also expected to retain most of their existing customers, because the level of service they offer is not easily duplicated in other countries that are able to offer lower costs.
The short turnaround times of the tightly knit Sri Lankan apparel industry allow it to take on small orders of different and even highly sophisticated designs with short, sharp delivery times, compared to slower, low cost, bulk production, says Watkins.
"The Sri Lankan industry is quite sophisticated. We have the advantage of quality, like getting it right the first time, and quick delivery and good port facilities. Manufacturers compete but also cooperate.
"This combination is not something that you can duplicate just like that. So if we pick up some of the outflows from China, we should do alright."
It's not all plain sailing though. Coats, like the rest of the apparel industry it services, is beginning to feel the slowing business.
"We saw strong recovery by the end of 2010, from recession in 2008/9, but now it's at a plateau, because the US and EU, the primary markets, are in uncertainty," Watkins explains.
Coats supplies to about 60% of the Sri Lankan export apparel industry, and says it works closely with local garment factories to target fast deliveries with the highest efficiencies and lowest wastage.
The company says it also tests many of its new products in Sri Lanka because of the "positive industry attitude". For instance, its latest 'Seamwork 3' software that calculates optimum thread consumption for apparel, and the Coats Colour Express application that allows colour matching of thread and fabric, are both being piloted in Sri Lanka.
Despite the slowing business Coats - which also controls over 80% of Sri Lanka's consumer and craft thread markets and offers zips and specialty threads, such as tea bag threads, to the Sri Lankan market - expects double digit turnover and plans to better its 2010 profits in 2011.
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