At Lanka Harness Company located in Biyagama, Sri Lanka a commercial town on the eastern fringes of the Sri Lankan capital, Colombo, workers in white baseball caps are hunched over long tables, methodically threading wires into matchbox-sized containers. The factory, which makes impact sensors for seat belts and vehicle airbags, enjoys the automobile industry’s much-sought-after 1PPM (parts-per-million) quality safety standard, meaning that only one defect is permissible for every million parts produced.
Most of Lanka Harness Company’s orders are for Takata, a Tokyo-based auto-parts company that supplies impact sensors to Toyota, the world’s biggest car maker. As you know Toyota is one of the companies affected by defective airbags. Lanka Harness is a 11 year old company with just around 1000 employees that saw a serge in orders beginning 2015 and had a turn over of $40 million last year. The new orders have nearly doubled monthly production to 2 million sensors, from a previous average of 1.2 million a month.
Analysts in Sri Lanka have noted the niche that Lanka Harness Company enjoys, despite its location in a country with no automobile sector to speak of. “It is amazing for one company in Sri Lanka to be part of such a high-value chain in the car industry,” said Anushka Wijesinha, chief economist of the Ceylon Chamber of Commerce, a Colombo-based business body. “Catering to Japanese quality standards and retaining such a market share is unusual.” But there is something even more noteworthy about Lanka Harness Company: It belongs to a small but growing number of medium-sized enterprises in Sri Lanka’s free trade zones that are tapping into the growth of global production networks, often producing highly specialized components.