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Adam Investment’s thorough planning brings profit into loss making apparel firm Orient Garments

YarnsandFibers News Bureau 2014-05-09 16:00:00 – Sri Lanka

Orient Garments PLC, is a subsidiary of Adam Investments Plc, a young investment company having interest in apparel after thoroughly assessing the situation of a loss making Sri Lankan apparel firm, Orient Garments engaged in manufacturing and exporting apparel decided to buy into the firm spending 187 million rupees with a 39.8 percent stake in early January, is being turned around by winning back lost customers, bringing new management and processes.

The company was taken over at the time experienced senior managers and buyers had left. There were piles of rejected orders in factories, some of the orders were rejected due to quality issues, but others were due to the inability to meet delivery schedules.

Adam Investments was able to bring back the buyers since many of them were already clients of Adam Apparels. They negotiated with the buyers to ship the rejected orders and also address quality problems that were found. Some of the orders that Orient Garments had accepted were two complex for the factory.

In the December 2014 quarter Orient Garments revenues had plunged 61 percent from a year earlier to 438 million rupees. After direct costs it lost 51 million rupees.

According to Adam Investment chairman Ali Asgar Shabir Gulamhusein, with through planning, in the March quarter, the firm's revenues rose 75 percent from the December quarter to 769 million rupees, generating a gross profit of 53 million rupees.

The planning involved appointment of higher management and staff so that they could focus properly on the production and efficiency of the factories. At the time of take over the factories were running 29 lines. Today they are running 57 lines. In subsequent quarters they hope to see more improvements.

Orient Garments is now operating five factories and have hired more than 500 staff to boost the total to 4,000 workers.

The new management is working out plans to bring back the two factories leased by the earlier management to a large apparent group to contract manufacture their orders.

Adam Investments Plc has plans to raise 400 million rupees through an initial public offer which is due to open on May 19. The stock was transacted at 14.30 rupees Friday in intra-day trade

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