In an attempt to make up for a shortfall of locally produced fabrics, the Sri Lankan government has announced a new initiative to encourage textile makers to set up new plants in the country.

It has put aside a 75 acre site near Colombo for the scheme, complete with basic facilities and 310,000 sq ft buildings, which it will make available “at nominal cost” to investors.

The government says it will grant tax concessions and other incentives “to those who wish to make use of this opportunity in manufacturing fabric for the clothing industry in Sri Lanka and for export.”

Clothing accounts for 55 per cent of Sri Lanka’s total exports, but without a local fabric base manufacturers have to import substantial amounts of material annually.

The development of a local fabric base has been identified as a major downstream integration initiative that is essential if the country is to meet the challenges arising from the removal of quotas after 2005.