Sri Lanka's Daya Group of companies will expand its apparel operations into Vietnam this year through a joint venture agreement with a Vietnamese state-owned company. 

"We hope to start the Vietnam project in July this year. We signed an MOU with a Vietnamese government owned company in March," said Daya Group chairman Daya Gamage.

The Vietnamese venture is expected to increase turnover and reduce costs, the company added.

The Daya Group, which currently has a workforce of around 3,500 and two apparel factories in the Ampara district, is also expanding apparel operations in Sri Lanka and has entered into an agreement with another Sri Lankan group DSI Samson. 

"We are expanding to keep pace with our buyer requirements. Joining with Samson Apparel will allow us to combine our strengths, increase production and reduce costs," said Gamage.

The company is also adopting a strategy of smaller production units that are located closer to the homes of workers. 

Daya Group director Kingsley Bernard said: "The garment industry suffers from a labour shortage. This is mainly because after girls get married they find it difficult to travel far to come to work, because of their domestic obligations.

"So we are setting up three new factories that are smaller in size, in identified areas in Amapara, so that girls don't have to travel far."

Daya Group customers include American Eagle, Tesco, Wal-Mart, Target and Gap.

By Dilshani Samaraweera.