Some Little Known Facts About SL’s Apparel Giants

By Paneetha Ameresekere | Published: 2:00 AM Dec 6 2021
FT Some Little Known Facts About SL’s Apparel Giants

By Paneetha Ameresekere 

This article is based on two World Bank (WB) publications, one a document titled ‘Regional Investment Pioneers in South Asia: The Payoff of Knowing Your Neighbours’ and the other a blog titled ‘To boost intraregional trade and investment in South Asia, know your neighbours,’ both released on 17 November 2021.

They give a glimpse of the success of MAS Holdings and Brandix, two of Sri Lanka’s successful garment billion US dollar exporting firms, albeit, unquoted and family owned, hence, very little  being known of them, until some revelations are made from these publications.

Garment exports are Sri Lanka’s second largest foreign exchange earner and the country’s single largest merchandise export in value terms.

Meanwhile, the WB’s MAS story mainly revolves round the success of its ‘Amante’ brassiere brand, which sale to Reliance India for an undisclosed sum was announced in November 2021, while that of Brandix revolves round their investment in Andhra Pradesh.

Lowest Margins

The WB, describing Amante’s success under the subtitle ‘How outward foreign direct investments (OFDI) Helped MAS Holdings 

(Sri Lanka) upgrade along the apparel value chain,’ said, “In the apparel sector, the highest margins go to retailers and brand owners and to research and development and design activities. The lowest margins are associated with apparel manufacturing, where most of South Asian global value chain (GVC) participation is located.

 “In the face of the global liberalisation of apparel quotas in 2005, MAS Holdings of Sri Lanka, a family-owned firm, during the late 1980s and 1990s had developed into a contract manufacturing partner of L Brands (the brand owner of Victoria’s Secret) and Nike.” 

In the context of rising wages in Sri Lanka and the lead-up to 2005, adjustments included specialising in one of the most complex of garments — the brassiere, which can have up to 50 components —and investing in becoming a full-package supplier to the buyer.

 This endeavour involved backward integration into textiles and some accessory manufacturing to reduce lead times and developing close relationships with MAS’s lead buyers. Inward foreign direct investment (IFDI) was important because backward integration was achieved with foreign partnerships. Today MAS Holdings is a major producer of intimate apparel and performance sportswear.

HK Investment 

The MAS design centre in Hong Kong SAR (Special Administrative Region), China, was part of MAS’s effort to become a full-package supplier for global buyers. It also served as a source of skills for designing products for its own brand. 

Developing a brand in India and distribution investment, ‘Amanté’ was created when MAS contemplated reducing its vulnerability by developing its own brand. The target market was India. Not only were incomes increasing rapidly for a youthful population, but Indian women were also acquiring more direct purchasing power by entering the workforce.

 Identifying a long neglected market, MAS undertook countrywide market research in India to design a bra that would be suitable for the South Asian woman’s body characteristics, the climate, and the culture. 

By 2007, the brand Amanté was launched in India as a high-quality product targeting the middle-upper segment of the market. Believing that it did not have a sufficient variety of product lines to warrant a retailing exercise, the firm sold its products in department stores (large format stores in Indian parlance). 

The products were made in the factories of related firms within the business group in Sri Lanka. MAS then invested in a distribution office and warehouse in Bengaluru (Bangalore), India. Within a couple of years, Amanté would capture 

25 per cent of its target market segment. 

Retail investment: After five years in India, the product was launched in the firm’s home turf of Colombo, 

Sri Lanka. The firm experimented with retailing In Colombo, given that rents were significantly cheaper than in Mumbai or Bengaluru. After the learning experience in Colombo and the development of a variety of product lines, the firm launched its own retail store in India in 2015. It continues to sell in department stores as well as in its own exclusive brand outlets. In 2017, a retail investment was made in Maldives. The firm entered Pakistan through a franchise agreement in 2018. 

Buying a brand: While developing retail experience, the firm also found itself in a position to invest in the well-known United Kingdom bra brand, Ultimo in 2013, the WB said. Gaining ownership of a well-known brand in a competitive market such as the United Kingdom provided deeper experience in branding and the higher margins that come with time for well established brands, the WB said.

 Investing in research and development (R&D) and health tech and femtech start-ups: MAS has invested in health start-ups in the United States related to women’s health (menstruation, incontinence and menopause). Using moisture-wicking, absorbent textiles, the products are manufactured in its factories.

Pennsylvanian Investment 

At the same time, MAS invested in technology to develop material that could monitor health and facilitate rapid muscle healing, financing start-ups in Pennsylvania. The firm was able to benefit from the higher value added and higher margins associated with R&D. MAS Holdings received approval from the Central Bank of Sri Lanka for these investments because there was no automatic approval of any kind. Technology partnerships are critical to MAS Holdings’ success.

 Volume and scope of products: As global buyers sought to consolidate their supply chains in the 2000s, OFDI allowed MAS, an innovative firm from a small country, to survive and thrive by facilitating higher volumes of production. Higher production volumes have been a critical part of MAS Holdings’ manufacturing business. MAS Holdings was able to deliver on volume and scope of products through increased production in Bangladesh, India, Jordan, and Vietnam. 

North Carolina Investment

Reshoring and near-shoring: As lead times and quick response have become important in some segments for buyers, the 2017 purchase of a denim manufacturing company in North Carolina and its Honduran affiliate provided another channel through which MAS Holdings was able to accommodate buyers. With a turnover of about US$1.8 billion and 95,000 employees, MAS Holdings continues to grow, based on a culture of innovation, women’s empowerment and social responsibility, the WB said.

MAS Holdings Chairman Mahesh Amalean said that his guiding principles when entering a market were, “start small, learn big.”  It was okay to lose money (“but not too much!”), perhaps an indication of the value of the “information acquisition” that accompanies initial entry, the WB said. MAS Brands started with sales of its ‘Amanté’ brand of high-quality brassieres in department stores and it was only after eight years in the Indian market that it opened its own retail shops in India, moving from being a brand owner to a brand retailer, the WB said.


The Sri Lankan pioneer Brandix, which invested in the development of an apparel special economic zone in India, was forced to do its due diligence in house for what turned out to be one-third of the price quoted by the Indian affiliate of a prominent global consulting firm, the WB said.

 This revelation suggests that there is a profitable space for the private sector to provide high-quality consultancy services that specialise in cross-border issues.

A native of Visakhapatnam on India’s southeastern coast, Pavani has witnessed the dramatic changes foreign investment can bring. She was the first employee hired in 2008 when Sri Lankan firm Brandix Lanka Ltd., opened an apparel factory near the city. Since then, Pavani has risen to become Senior Executive in charge of training for the plant’s 2,000 workers, the WB said.

Although the state of Andhra Pradesh is India’s third-largest cotton producer, apparel manufacturing was slow to get started until Brandix Lanka Ltd., arrived, it said. Now, an entire industrial park devoted to textiles and apparel employs thousands of local women, reducing poverty, stimulating exports, and encouraging new investment from inside and outside the region.

For Brandix, the investment reflected a willingness to venture into an environment that other firms may have perceived as risky, based partly on historical family ties with India, the WB said. It added that Sri Lankan apparel pioneers Amalean of MAS Holdings fame, Omar of Brandix, and Sattar of Timex Garment Group, which has also invested in India, have their ancestral origins in Gujarat, the WB said.

Another factor behind Brandix’s success was the State Government’s active courting of Brandix with a strong business case for creating an apparel park in Visakhapatnam, it said. The project was ultimately implemented as ‘Brandix India Apparel City,’ a public-private partnership with Brandix, the  Andhra Pradesh Government and India’s Central Government. Today, it is an innovative and thriving facility that employs about 20,000 people, the WB added. 

This transformative investment highlights the potential of intraregional investment to stimulate trade, attract further investment and enhance the flow of information and network formation. The latter is known as knowledge connectivity – how well firms know the economic and investment environment in another country. Capturing and sharing formal and informal knowledge is highly valued by companies to help them operate more efficiently and make investment decisions. Better knowledge connectivity reduces the cost of doing business in a country, it said.

The entire value chain for apparel is available in the region, yet apparel manufacturers source extensively from East Asia, the WB said. Cotton and yarn come from India and Pakistan, and fabrics are made in India, Pakistan, and, to a lesser extent, Bangladesh and Sri Lanka. Design capability is growing in India, Pakistan and Sri Lanka; trade logistics and network coordination are strong in Sri Lanka and manufacturing takes place in Bangladesh, India, Nepal, Pakistan, and Sri Lanka. Bangladesh is the second-largest exporter of apparel in the world after China. Moreover, the region’s economies have specialised within the sector, the WB further said.

By Paneetha Ameresekere | Published: 2:00 AM Dec 6 2021

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