Apr 25, 2011 (LBO) - Expolanka, a Sri Lankan group with freight operations in Asia and Africa, plans to expand its fashion logistics business making use of the island's location between regional manufacturers and Western buyers.
"My reading is that Sri Lanka could be a good 'hubbing' point for the apparel industry," Expolanka group chief executive Hanif Yusoof told LBO in an interview.
Almost two-thirds of the profits of the group, whose main business is to serve the logistics needs of the apparel industry, comes from its transportation operations.
Yusoof believes the island could serve as a hub to which products made in the region could be shipped for consolidation and value addition and then re-shipped to Western buyers.
"For example, in the apparel industry, tops made in India and bottoms made in Bangladesh could come to a customs bonded warehouse facility in Sri Lanka, where we could combine them and re-export.
"Sri Lanka could be centre for 'just-in-time' deliveries to Western markets."
These services are now done in warehouses in Western markets like the United States or United Kingdom but a facility in Sri Lanka could be cheaper and also shorten the supply chain especially for products for Asian markets.
"Some apparel go all the way to Europe and back to markets in India and Asia," said Yusoof. "Instead, we could offer facilities within the region where the whole logistics supply chain can be reduced."
Expolanka already has a cargo consolidation business for its existing clients in the apparel industry in the island and south Asian region and provides services such as quality inspections.
The company plans to use part of the funds to be raised from a forthcoming share issue to build a warehouse at its four-acre property in Orugodawatte, near a rail track in the capital Colombo for its logistics business.
"We need a larger, modern facility," Yusoof said. "The idea is to make it one of the best fashion logistics warehouses.
"We're a niche fashion retail freight forwarder and potential for expansion is tremendous in the entire region."
Yusoof said Colombo port is already a transhipment hub for the region and a new port and airport being built in the southern Hambantota district could improve the island's attraction as a logistics hub.
"Western retail chains want to have less inventory," he explained. "They would want to always make sure not to have extra inventory. So rather than keeping inventory at those points which are expensive locations, we should be able to have systems in origins which produces garments.
source - www.lbo.lk
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