Sri Lanka’s fabric company Teejay Lanka Plc is hopeful of increasing sales from new apparel factories being set up in the South Asian region and Africa, according to company Chairman Bill Lam. The rising trend of locating apparel plants in these two regions offers scope for the Sri Lankan fabric industry, Lam told shareholders in the firm’s annual report.

The trend is due to changing US tariffs on Chinese products and the rising cost of labour in China, a report quoted Lam as saying. A possible decline in the demand for cotton in China, one of the two leading suppliers of cotton yarn globally, could help curtail prices of the company’s key raw material, said Teejay Chief Executive Officer Shrihan Perera.

Moreover, there are only a few fabric mills in Africa to compete with Teejay, he said. As Teejay already has manufacturing facilities in India, the firm can offer competitive costs and delivery times, he said. However, operations in Sri Lanka face high energy costs and infrastructure limitations, slowing expansion, Perera added. Teejay, which specializes in making knit fabric recently, has ventured into lace production at its Indian plant as well, in the firm’s attempt to diversify income.