Written on 07.04.2014 - Industry
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Inoac relocates foam production to Sri Lanka from China

Inoac, a leading Japanese conglomerate, will be investing USD 20 million in Sri Lanka over the coming years as it relocates selected foam operations to Sri Lanka from China, thus allowing its customers in the country to save millions in foreign exchange needed for the import of speciality flexible foams used for apparel and in particular for lingerie.

Rishad Bathiudeen (left) meets Soichi Inoue (second from right) at the BOI Zone in Horana. (Photo courtesy: DailyFT (www.ft.lk))

In addition, Inoac announced it is also considering the establishment of a world class automotive component operation in the country. Inoac is a Tier 1 producer of automotive components for Toyota, Nissan, Honda, Mitsubishi, Yamaha and several other renowned global brands. Within Japan, Inoac has almost 60 – 70 % market share in selected tyres, tubes, and specific automotive components.

“If the Maruti Suzuki assembly project starts here, we will bring our Japanese automotive component manufacturing right here to Sri Lanka,” explained Soichi Inoue, Founder and CEO of Inoac Corporation.

Inoac is no stranger to the country – its involvement with Sri Lanka started as far back as 1959 when it commenced its first joint venture with Associated Motorways (AMW) in Sri Lanka. Rishad Bathiudeen, Minister of Industry & Commerce of Sri Lanka, said: “There is no doubt that Inoac’s re-entry is a great boost for Sri Lanka’s competitiveness in the global marketplace as well as exports diversification efforts. Therefore on behalf of our committed President Mahinda Rajapaksa, I thank Inoac Corp. for its initiatives here.”

“Nearly two years ago Inoac took the decision to transfer their production facility from China to Sri Lanka to produce and supply unique high quality polyurethane foam to the giants of the apparel industry in Sri Lanka such as MAS, Brandix, Benji and Silueta,” said Ken Miwa, Executive Managing Director of Inoac Corp, Shinagawa, Tokyo. “We are shifting at least 20 % of our production from China to Sri Lanka.” MAS is a leading supplier of lingerie to leading retailers including Victoria’s Secrets. Although it imports foams, the company now uses novel production technology to produce moulded polyurethane foam cups.

“Soft foam is a must in making brassieres of high export quality and Sri Lankan apparel suppliers have been importing the entire volumes to date,” said Rajiv Dharmendra, CEO of Silueta Ltd., an apparel producer with Biyagama Export Zone. “From today, there is no need to import. Sri Lanka produces at least 40 million such brassiere pieces for export regularly. Due to soft foam now being made in Sri Lanka for the first time, we believe the cost saving for Sri Lanka is at least USD 5 million annually in the apparel sector alone and the savings could be higher.”