Brandix and Hirdaramani are NOT leaving Sri Lanka & shifting operations to Bangladesh!

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Brandix Apparel Limited and Hirdaramani Apparels are two of the leading apparel manufacturing companies headquartered in Sri Lanka and are among the major apparel exporters. Over the last few months, there have been rumors of Apparel companies winding down Sri Lankan operations, and these claims went viral recently, with a series of posts that claimed Brandix & Hirdaramani had closed down several significant factories and were planning to shift operations out of the county.

However, the Factcrescendo Sri Lanka team found that while some factories were closed down and some were merged as part of the strategic decisions to cater to the global impacts on the apparel industry, neither of the company was winding down Sri Lankan operations.

What Viral Posts Say

Certain website reports claimed that Brandix would leave Sri Lanka, and 5 of their factories have already stopped operations in the country and were planning to establish these factories in Bangladesh. The content of one such article is seen below.

It is reported that 05 garment factories of the Brandix group have been closed and the investors have invested them in Bangladesh, showing signs of a severe collapse in the garment industry sector in this country. Accordingly, the main factory located in Katunayake, and the factories located in Welisara, Avissawella, Rakwana and Habaraduwa zones have been shut down.

Those factories have had to be closed due to the foreign exchange crisis in Sri Lanka and the fact that orders are not being received from them. Another reason for this is the fact that Bangladesh has an easier business environment than Sri Lanka.

Accordingly, it is a serious problem that the people who worked in the factories in Sri Lanka have lost their jobs.

Due to the ability to procure workers from Bangladesh at a lower salary than the workers in Sri Lanka, the possibility of the employees of those institutions in this country to join the Bangladeshi factory has also been blocked. It is said that the fact that the factory does not need to provide food to the Bangladeshi workers has also provided another reason for these investments to go to Bangladesh.

However, due to the economic crisis in the country, the industrial sector is collapsing day by day and yesterday the opposition leader Sajith Premadasa questioned the government in the Parliament.

It will also be difficult to address the socio-economic crisis, especially with the closure of garment factories and the unemployment of thousands.

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Fueled by such articles, a number of social media posts went viral, and rumors are being spread as social narratives stating that both apparel companies, Brandix and Hirdaramani, will leave Sri Lanka.

Social media posts were especially viral in Sinhala.

As these apparel companies are the lifeblood of thousands of families in Sri Lanka and are top foreign exchange drivers, many were curious about the truth of these viral posts. Hence, we decided to investigate further.

Fact Check

Headquartered in Sri Lanka with a history of more than 50 years and employing thousands of employees, both Brandix and Hirdaramani are household names in the Apparel sector in Sri Lanka. Moreover, both companies have ventured into foreign markets in recent years as well. Yet they continue to make a strong presence in Sri Lanka over the last few decades with great strides towards sustainable development activities as well. Hence, it's difficult to imagine such companies having such a stronghold in Sri Lanka would completely abandon Sri Lankan operations, even in the face of the current economic downturn.

And we did not come across any news in the mainstream media stating that Brandix and Hirdaramani were preparing to leave the country, nor any such statements on their official social media handles either.

Media Spokesman of Brandix

The Media spokesperson of Brandix confirmed that the facts indicated in the viral social media posts were false and misleading. He clarifies that Brandix Apparel company has not decided to wind down operations in Sri Lanka nor leave the country and set up operations in Bangladesh.

He explains that to deal with some of the unfavorable conditions faced by the global apparel industry and to increase the efficiency in some of the factories, Brandix had taken a few strategic decisions to either close down or merge some factories. However, the news that the company is leaving Sri Lanka is totally false, added Brandix media spokesperson.

“Our Katunayaka garment factory, Habaraduwa, and Awissawella factories are fully operational, NOT closed down as some web media reports claim, and Brandix does not have a factory in Rakwana,” he added.

We also noticed that a few of the Brandix employees representing some of these factories mentioned in the posts commented on the false reports clarifying that they were still working and that such factories had not been closed down.

However, accepting that the Welisara factory operations were wound down in March 2023, Brandix spokesperson said that it was also a closure planned for a long time and hastened by current global market trends.

He further says that the global apparel market has shrunk by around 30% due to global economic issues and, whether we like it or not, have to face the consequences of it.

While also accepting the fact that operating from Bangladesh is more financially profitable than Sri Lanka, the media spokesman emphasized that Brandix would not relocate the Sri Lankan factories to Bangladesh.

“We have only one factory in Bangladesh, and it was established in 2013, and we do not intend to establish new factories there and have not invested there so far to start new factories”, he said.

Brandix spokesperson emphasized that Brandix Apparels will continue to operate in Sri Lanka for a long period while empowering and enhancing the local communities.

The Owler website says that the revenue of Brandix increased by 4.9 percent from December 2021 to August 2022. However, due to the global economic situation, Brandix also has to face certain crises when paying employees allowances, etc.

Hirdaramani also confirms the closure of the Meepe factory but has no intentions of stopping SL operations!

In response to recent viral claims, Hirdaramani released a statement confirming that while the factory closure in Meepe was true, the group intends to offer their employees the opportunity to relocate to some of their other factories across the country. They also state that the Hirdaramani group remains optimistic that the current reduction in demand will be temporary and that normal demand requirements will be restored soon, as seen below.

The Hirdaramani Group also mentions that they have no intention of reducing the overall capacity in Sri Lanka and is committed to continuing investing and expanding as part of its long-term strategy to foster the growth of the apparel sector in Sri Lanka.

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Conclusion

According to our investigation, it’s evident that the rumors about the departure of two major apparel companies, Brandix and Hirdaramani, from Sri Lanka are false.

With regards to Brandix, only one (Welisara) of the said five factories mentioned in the viral posts was actually closed down. Brandix spokesperson confirms that the global apparel market has shrunk significantly, and as a result, some of the factories were strategically closed down or merged. Yet, there has been no decision to wind up operations in Sri Lanka or to move operations to Bangladesh.

Hirdaramani also confirms the closure of the Meepe facility yet has no intention of halting Sri Lankan operations.

Our Sinhala language fact check on the same topic can be read here.