Sri Lanka’s apparel industry remains a central pillar of the national economy, contributing more than half of the country’s export earnings and providing employment for hundreds of thousands of people. Around the Biyagama Export Processing Zone, a vibrant network of micro, small, and medium enterprises has emerged, supported by the area’s skilled workforce, established infrastructure, and strong links to the wider apparel value chain.

However, Biyagama lies within the flood-prone Kelani River basin, and this geography poses serious challenges for the small enterprises operating outside the zone. Intense rainfall, limited drainage, and recurring extreme weather have resulted in repeated floods that damage equipment and raw materials, disrupt production, and place considerable financial and operational pressure on local businesses. Many MSMEs find it difficult to recover from these events, particularly when they lack insurance, technical assistance, or the resources needed for long-term resilience.

This case study brings together the experiences of MSME owners, community members, and local officials to better understand how flooding affects apparel sector enterprises in Biyagama. It examines the everyday realities of operating in a high-risk environment and highlights the need for stronger risk management, improved access to finance, better climate information and forecasting, and targeted support that can help build resilience at the local level.

The insights presented here aim to inform efforts to strengthen climate preparedness across Sri Lanka’s apparel sector and to ensure that the MSMEs driving this industry are equipped to withstand and adapt to the growing impacts of climate change

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