- Loan aimed at helping company sustain its operations and preserve jobs
- Apparel industry one of hardest-hit industries from COVID-19 pandemic
- IFC Directors scheduled to consider proposed facility on March 25
By Nishel Fernando
Extending its efforts to counter the impact of the COVID-19 pandemic on Sri Lanka’s apparel sector, the International Finance Corporation (IFC) of the World Bank Group has proposed US$ 50 million long-term financing facility to Brandix Lanka Limited to sustain its operations and preserve jobs in the country.
The apparel industry is one of the hardest-hit industries in the country from COVID-19 pandemic. In the latter part of last year, IFC proposed a similar financing facility to Sri Lanka’s MAS Holdings for its workforce in Sri Lanka. The status of that proposed facility is currently pending.
Brandix Apparel Limited (BAL), a fully owned subsidiary of Brandix Lanka Limited (BLL) covering Sri Lankan operations, is involved in manufacturing of activewear, casualwear, intimate wear and sleep & loungewear for global brands such as Uniqlo, Calvin Klein, Marks & Spencer, Victoria’s Secret and PVH among others.
“The proposed IFC investment is a senior long-term loan for up to US$ 50 million to Brandix to finance the medium and long-term term working capital requirements and the growth and maintenance of capital expenditure in Sri Lanka. The proceeds from the proposed investment will be used exclusively for the company’s Sri Lankan operations,” IFC disclosed. Both BAL and BLL are proposed be the co-borrowers of the loan.
IFC noted that the proposed funds would allow operating subsidiaries of BAL to retain employment, generate export revenues and continue as going concerns. At the market level, the proposed project is expected to help protect exports growth and promote resilience while limiting disruptions along the domestic and global supply chain.
The Board of Directors of IFC is scheduled to consider the proposed facility for Brandix on March 25 this year.
Brandix is considered to be the largest apparel exporter in Sri Lanka and it also has operations in India, Bangladesh, Haiti and Cambodia. Overall, it employs a workforce of over 60,400 and around 35,000 staff is based out of Sri Lanka, consisting of 33,260 associates and staff and 1,740 executives.
The women on-roll staff accounts for 85 percent of the workforce at present accounting for 93 percent of associate roles, 25 percent of executive roles, and 33 percent of board roles.
IFC emphasised that it continues its support to Brandix through its advisory services in gender, given 85 percent of the company’s workforce is women. In addition, a part of the proposed loan is expected to fund Brandix’s capital expenditure in process efficiency initiatives and renewable energy projects in Sri Lanka. Brandix pledged its commitment to stakeholders to reach net zero carbon emissions, safe drinking water and zero discharge of hazardous chemicals and 100 percent recycling/reusing waste by 2023.
Brandix began operations in 1972 and today its global footprint includes 28 manufacturing facilities (21 in Sri Lanka, 4 in India and one facility each in Bangladesh, Cambodia and Haiti).
Phoenix Ventures Limited owns 100 percent stake of Brandix Lanka Limited where Mohamed Haji Omar, Mohamed Aslam Omar, Mohamed Ashroff Omar and Feroz Omar hold beneficial interest.