A major blow hit Sri Lanka’s apparel industry as a long-standing British-owned garment factory in the Katunayake Free Trade Zone has shut its doors indefinitely leaving around 2,000 workers jobless and the facility locked without notice.
The factory, owned by the UK-based brand ‘Next’, had been operational in Sri Lanka since 1978, marking one of the earliest foreign investments in the island’s apparel sector. After over four decades of manufacturing garments for global markets, the management abruptly pulled the plug citing unmanageable production costs in Sri Lanka as the key reason for its exit.
Without any formal announcement to the media or even the employees, the premises have been completely sealed off. Sources on the ground report that no managerial or administrative staff are present at the site. Workers who arrived at the factory gates were shocked to find them locked and deserted.
According to internal communications, the owners concluded that the cost of production in Sri Lanka had exceeded profitable margins, prompting their decision to shut down operations and exit the country altogether.
The closure has not only left thousands of families in economic limbo but also reignited growing concerns about Sri Lanka’s ability to retain foreign investors amid soaring inflation, volatile energy prices, and mounting operational costs.
Industry experts warn this could signal a dangerous trend, as Sri Lanka continues to lose competitiveness to regional rivals like Bangladesh, Vietnam, and even emerging hubs in Africa. The loss of such a high-profile investor raises serious questions about the long-term stability and appeal of Sri Lanka’s Free Trade Zones.
With no immediate statement from government authorities or the Board of Investment, affected workers and trade unions are now demanding answers. Many fear that without quick intervention and reassurance to the broader investor community, more factories could follow suit turning a one-off closure into a cascading crisis for the apparel sector, which remains one of Sri Lanka’s top foreign exchange earners.
