Harding at the helm of Foundation Garments

Tuesday, 25 November 2014 00:32 - - {{hitsCtrl.values.hits}}

Targets to be a $ 100m business by 2020

By Sarah Hannan Keith Harding has been working for the textile and apparel industry for the past four decades and was appointed as the CEO of Foundation Garments Ltd. on 3 November. Harding’s career started in the supply line at Marks and Spencer in UK. After 16 years of working in his home country, Harding moved to Bangladesh on work and then had the opportunity to work in China, Sri Lanka, Vietnam, Egypt and Cambodia. Sharing his work experience and learnings from his work out of the UK, Harding stated that it was a culture shock to work in Asia. “Starting to work in Bangladesh was the first time I had been out of UK on work. At the time it was a hard place to work and staying healthy was difficult. But that was a great learning curve. The country didn’t have a big industry but at present it is an emerging market.” When Harding moved to China, the country was rapidly developing and it was a good time for the apparel industry. But he noted that now the expats are driving out of China because of the reducing jobs. While he was working for the company in China, Harding was able to coordinate with factories in Sri Lanka, Vietnam and Cambodia. He served a short spell in Egypt before re-joining the company he worked for 12 years ago and before joining Foundation Garments Harding served in Cambodia for a year. Foundation Garments is no new place for Harding as they were suppliers for one of the companies he had worked previously. “I had a good relationship with the Jinadasa Group and I was in touch with the now Director’s (Dilanka Jinadasa) father. However, I am the only foreigner working for the group at present.” Foundation Garments is a cost-benefit company which runs medium sized factories in the Colombo District. The employees of the company live in or around the neighbouring towns so the company does not have to bear a huge cost on their transportation. “Instead, we ensure they get a better pay package and incentives. Coming from an industrial family background I understand how important it is to earn a better wage and be able to provide for the family. To run a profitable business it is important to have a happy workforce,” Harding reiterated.

While the company’s core products are underwear and sleepwear, they are also looking into expanding their product range to intimate-wear and swimwear. “Our target is to become a $ 100 million business within the next five years. Speed to market is increasing and we are using the dry dying technique. While Sri Lanka will be the core of the business, in future we might expand to Cambodia and Ethiopia. It is more important that the verticality is improving.” The company is also looking at future acquisitions and maintaining their medium sized factories they are looking at ways to increase productivity. According to Harding, the company has achieved a Y-o-Y turnover of 19% from Jan-Aug which spreads evenly across the year. Harding’s take on apparel industry in Sri Lanka Comparison

Sri Lankans are easy to manage. China on the other hand has a demanding workforce who constantly requests for salary increments and the labour turnover is at 120%. Bangladesh at the time was less militant. But now they are becoming more militant. Sri Lanka absenteeism is not bad and the labour turnover is 50%.

Factories have high expertise and the skilled labour force has increased with the knowledge share and increase of education modules on the apparel and textile sector. We also see that Sri Lankans are sent on secondments due to their expertise to factories out of the country.

With the improvement of the textile sector, we can purchase fabric in Sri Lanka itself and the speed to market is increasing in return.

Sri Lanka is strategically positioned to supply for emerging markets such as China, Russia and India. On Government concessions

Sri Lanka is a politically stable country and the GSP has not affected the growth rate as we have reached 20%.

The 2015 Budget is in favour of the apparel industry. 2% increase on EPF. As you know energy is one of the key costs that we have to bear and the 15% reduction on electricity helps to bring down the cost.

Dissolved duty in used machinery encourages the garment owners to purchase new machinery. China Free Trade Agreement

The Free Trade Agreement between China and Sri Lanka will have a positive impact as major brands are opening up shops in China.

The middle class now have a lot of funds to spend and will help Sri Lanka in return. Threats

Ethiopia is an emerging market and China is investing in Ethiopia since the country is the largest cotton producer in the world. Once the AGOA comes in to place Ethiopia will become a competitive supplier.

As the Colombo City expands, more job opening will be available in other sectors with attractive wages. We will have a threat of losing our workforce.

Technology is evolving at a fast phase and it is too costly to purchase 3D printing machines but once the buying power increases, the labour force will get replaced by these machines.

Established in 1976 as a family business, Foundation Garments is the core business of Jinadasa Holdings and started its first production plant with just 30 machines. Today, the company has grown to manufacture over one million pieces of clothing monthly in six strategically-located production plants.

Evolving into an international conglomerate with ties to John Stuart Bennet USA and Marsylka Manufacturing UK, it provides a global tailor-made solution to any sourcing requirement.