The new warp knit facility opened by DogiEFA at the MAS Fabric Park should help to boost Sri Lankan exports to the EU, through domestic production credentials.

The company, a textiles joint venture between Spanish producer Dogi, Elastic Fabrics of America (EFA) and MAS Holdings, set it is set to help more companies meet GSP+ criteria.

Previously, many Sri Lankan exporters could not use the GSP+, a unilateral, preferential trade scheme awarded by the EU to vulnerable economies, because they could not meet the requirement for 'over 50% domestic value addition.'

However, the new-found local availability of warp knitted fabric is expected to allow more companies to qualify and pull in more European business.

"The GSP+ gives zero duty access into the EU if using fabric made in Sri Lanka," said Dhananjaya Rajapaksha, CEO of DogiEFA Sri Lanka.

"This will make it much more competitive for the EU to source from Sri Lanka. So we expect European orders to increase."

"Current demand for warp knitted fabric is between 8-10m metres per year. We expect demand to increase to about 15m metres per year by 2010,  because more people will be placing orders in Sri Lanka to make use of the GSP+."
 
To meet anticipated demand, DogiEFA is planning to triple its starting production by 2010, with its initial capacity of 2.5m metres per year increasing to 7.5m metres per year.

The DogiEFA facility, which began production last week (15 October) is the only export scale warp knitted fabric manufacturing facility in South Asia. The fabric is mainly used in lingerie, activewear and swimwear products.

By Dilshani Samaraweera.