SP Apparels builds Sri Lanka capacity, targets ₹200 crore revenue by March 2027

Tamil Nadu apparel makers are expanding Sri Lanka production to diversify export sourcing and reduce tariff exposure. SP Apparels has 1,650 machines in the market and is evaluating job-work capacity additions of 500-600 machines within a year.

— Source published Thu, 20 Aug, 2026, 17:41 IST · First seen Thu, 20 Aug, 2026, 17:44 IST · Source The Hindu BusinessLine

What happened

SP Apparels Ltd · Tamil Nadu apparel makers SP Apparels and Meenakshi India are building Sri Lanka production options to diversify sourcing, mitigate tariff

Key facts

  • ₹150 crore to ₹200 crore projected Sri Lanka revenue by March 2027
  • 1,650 machines in Sri Lanka
  • 1,300 machines deployed for exports
  • One factory operating at 85-90% capacity
  • Potential addition of 500-600 machines within a year
  • Existing Sri Lanka machinery could expand to 2,000 machines
  • India apparel duties to EU of around 8-12%
  • Sri Lanka apparel exports surpassing $5 billion
  • US, EU and UK account for nearly 75% of Sri Lankan garment exports

Why this matters

Sri Lanka’s preferential market access and growing Tamil Nadu manufacturer presence make local job-work partnerships, capacity acquisitions and supply-chain alliances strategically attractive.

What to watch

  • Timing and scale of the planned 500-600-machine job-work capacity addition.
  • Order-book growth from EU and UK customers and the share routed through Sri Lanka.
  • Progress toward the ₹200 crore revenue target by March 2027.
  • Sri Lanka wage, power, currency and port-logistics trends versus Tamil Nadu and Bangladesh.
  • Changes to UK/EU tariff preferences, rules-of-origin requirements and sustainability compliance standards.
  • Evidence that other Tamil Nadu apparel exporters announce Sri Lanka capacity, JV or job-work partnerships.
  • Secure multi-season EU and UK customer commitments before committing to the additional 500-600 machines.
  • Use job-work additions for demand spikes and retain owned facilities for higher-complexity, margin-sensitive categories.
  • Build Sri Lanka-specific compliance, traceability and quality-control systems to qualify for premium Western sourcing programs.
  • Increase local fabric, trim and logistics partnerships to reduce cross-border lead-time and working-capital friction.
  • Hedge against concentration risk by balancing Sri Lanka output with Tamil Nadu production and alternative export-market exposure.