Four projects for Batti fabric processing zone

• Industry prepares preliminary paperwork to be handed over to BoI 
• Optimistic sector increases projects 0from 3 to 4 
• Zone received Cabinet approval in late Oct. 

By Uditha Jayasinghe  

Preparations are being made to handover proposals to the Board of Investment (BoI) to establish four projects at the newly approved 275-acre Industrial Zone for Fabric Processing Enterprises in Eravur Pattu, Batticaloa, an industry official said yesterday.  Joint Apparel Association Forum (JAFF) Secretary General Tuli Cooray told Daily FT that the industry was preparing initial paperwork to be handed over to the BoI to set up four projects. However, he declined to give details due to the investment being in the early stages of development. 

“The industry had requested for this processing zone for a while now, and we had pledged to establish at least three projects to get it off the ground. Despite the challenges of COVID-19, we nonetheless managed to increase the number of projects to four,” he said. 

He also said that the Government had decided to allocate Rs. 4.5 to Rs. 5 billion to assist with the establishment of the infrastructure needed for the zone, which will include power, water, roads and environmental approvals. 

At the end of October, Cabinet approved the establishment of the fabric processing zone and also gave the green light to declare the industrial zone as a ‘Strategic Development Project’.

The establishment of the zone has been identified as a priority project by the Ministry of Industry, and will see the Land Reforms Commission allocate 275 acres belonging to the commission to the Board of Investment (BOI) to provide investment incentives for companies interested in investing in the zone.

Establishing a fabric processing zone has been a goal of the apparel industry for several years, and experts had pointed out it could help the COVID-19-hit industry to weather turbulent external uncertainties, tap into global value chain changes, and recover faster. 

Last year, the Sri Lanka Apparel Exporters of Association was optimistic of bringing down top apparel manufacturing companies to a proposed dedicated zone given that Government provided the land, water and electricity. 

The industry hopes to tap increased value addition encouraged by GSP+ and promote backward integration, resulting in the setting up of new industries and creating new employment opportunities in the country. Accordingly, the proposed textile zone could have factories ranging from woven manufacturing, knitted manufacturing, dyeing and finishing. 

Last year, Sri Lanka imported 255,437MT of fabric both for the export-oriented apparel manufacturers and for consumption in the local market. The import bill for this fabric came to $ 2.2 billion. The establishment of the Eravur Fabric Processing Park is expected to help reduce the imports of fabric as apparel manufacturers would be able to replace a part of their imported fabrics with fabric sourced locally.