Jeevith Senaratne, Director of Operations of Star Garments, shares insights into the role of ESG in the company’s impressive growth. Established in 1978 as the pioneering company in Sri Lanka’s first BOI zone, Star Garments has expanded to 10 factories in Sri Lanka, with plans for a new facility in Togo, West Africa.
A pivotal acquisition by Charles Komar & Sons in 2015 spurred significant growth, underscored by a commitment to quality, technological investment, and sustainability, Senaratne explains in this interview.
Can you take us through Star Garment’s journey of growth?
Our growth has been notable, particularly since 2015, when our factories doubled and our workforce expanded to over 9,000 today. This transformation coincided with our acquisition by Charles Komar & Sons, a major US-based company specialized in designing, sourcing and distributing apparel, enabling us to tap into their extensive expertise and market access.
In terms of production capacity, we currently produce approximately 1.6 million pieces per month. Since 2016, we’ve tripled our exports and topline revenue. With optimistic projections indicating a 20% growth this year compared to the previous year, we remain committed to driving sustainable and impactful growth in the apparel industry.
Our growth is attributed to three key factors. Firstly, our commitment to quality and technical excellence has set us apart in the industry, catering to higher-end fashion markets with flexibility in order sizes. Secondly, our investment in technology and product development has enabled us to offer comprehensive end-to-end solutions to our customers, encompassing design to logistics. Thirdly, our focus on ESG initiatives has positioned us as leaders in sustainability, with significant investments in this space since 2016.
Reflecting on the Sri Lankan apparel industry, while 2022 marked record-high export numbers, 2023 saw a slight dip due to global market fluctuations. However, 2024 shows promise, with a notable uptick in manufacturing demand.
Our expansion into Togo stems from the need to diversify our production locations and leverage emerging opportunities in Africa. Togo’s strategic advantages align with our long-term vision for growth and differentiation, including its status as a key cotton producer, deep-water port access, and preferential trade treatment with the US.
Why is ESG strategically important to Star Garments?
Clientele in Europe led the sustainability charge ahead of the US, prompting us to embark on this journey. Additionally, there’s a growing trend towards legislating carbon footprint disclosures on garment tags, highlighting the environmental impact of apparel manufacturing. Apparel manufacturing, especially fabric production, significantly contributes to pollution and this has led to increased pressure from consumers focussed on the impact of their purchase decisions. This pressure from consumers and brands alike has driven a two-fold approach to sustainability and ESG initiatives. Firstly, there’s a focus on traceability and transparency within supply chains. Secondly, efforts are directed towards making manufacturing processes more sustainable and environmentally conscious.
Our sustainability journey began in earnest in 2017 with the construction of our Innovation Centre, a pioneering passive house design that drastically reduces energy consumption. The building boasts 12 layers of insulation in its walls and double-layered glass filled with Argan gas for insulation. It operates at 30% of the energy cost of a traditional building its size. Inspired by this success, we extended our sustainability efforts to our manufacturing facilities. Eight of our factories are LEED certified, with two achieving platinum status, four gold, and two silver. We’ve also embraced the Higg Index (version 3), with plans to transition to version 4 across all factories. Additionally, we’re committed to SBTI targets and have achieved carbon neutrality across our operations by investing in carbon offset projects to offset our carbon emissions.
In terms of energy consumption, we’ve installed 4.9 megawatts of solar power and transitioned to biomass boilers in our largest factory. This has significantly reduced our reliance on traditional fuel sources. Furthermore, we recycle approximately 54 million litres of water annually by treating and reusing wastewater for various purposes within our plants. These initiatives underscore our dedication to sustainable practices and environmental stewardship in apparel manufacturing.
Can you tell us about your other ESG initiatives?
On the social and community aspect of ESG, over the past three years, we’ve been consistently recognized as one of Sri Lanka’s top workplaces in manufacturing by Great Place to Work. Additionally, due to our industry’s high compliance standards, we undergo frequent audits to ensure adherence to social and legal requirements, reflecting our commitment to ESG initiatives.
Across our group, we maintain various social initiatives tailored to meet the needs of our brands. These certifications involve independent auditors visiting our factories multiple times annually to assess workforce treatment and review our records for compliance with labour laws and payment regulations.
Furthermore, we actively engage in research and innovation. Currently, we’re partnering with SLINTEC to patent a 100% sustainable dye made from palm waste found in Sri Lanka. This natural dye offers a sustainable solution for garment dyeing processes.
In our social initiatives, we support Miracle Feet, an organization dedicated to treating clubfoot disease in infants. By funding awareness campaigns and surgeries, we aim to rectify this disability early in a child’s life, preventing lifelong challenges. Moreover, we’re proud to be involved in projects promoting environmental conservation. We’re a partner in a government-led effort for mangrove restoration, where we’ve invested in a three-hectare property to support this vital ecosystem.
What’s next for Star Garments in its journey of ESG-led growth?
Regarding growth, our strategy for Sri Lanka revolves around consolidation and leveraging potential investment opportunities within the country. We aim to expand our service offerings, capitalizing on our proficient English-speaking workforce that can seamlessly communicate with clients in the US and Europe. Additionally, our skilled workforce positions Sri Lanka as a destination for apparel-related services, that were previously handled in country in the United States and Europe. We are actively expanding this service offering.
Regarding manufacturing, diversification is key to mitigating risks. Our expansion into Africa serves this purpose, along with diversifying our product ranges, particularly in the sustainability sector. We’re consolidating our efforts in sustainability by maximizing our solar capacity, currently at 4.9 megawatts, with plans for additional capacity. Legislative developments, such as potential laws on power wheeling, offer new avenues for sustainable practices like solar farms.
As positive legislative developments arise, we aim to capitalize on them to further invest in ESG activities such as solar and biomass capabilities across our plants. We are committed to obtaining certifications like LEED and Higg Index 4.0 to ensure our factories adhere to the highest sustainability standards.