Kumar Dewapura, chairman of Tristar Apparel Exports, said the 50,000 square foot factory in Trincomalee has got its first order from Debenhams in the UK for half-a-million pieces of baby wear.
"At the moment, we have got enough orders from the UK," he told a news conference.
He said his group, which also makes fashion garments, has plenty of orders as it was able to offer lower prices and high efficiency.
"There are orders if you can make it at the right cost," Dewapura said.
"You only need to control cost and be competitive."
About half of Dewapura's 15 factories throughout the island make baby wear, demand for which has not fallen despite recession in key Western markets, as it was a basic item of clothing, he said.
The group's fashion garments business has also not been affected by recession which has hit many other apparel exporters.
"Baby wear is a volume business - demand is always there," Dewapura said. "In the fashion business, people who have money will always buy.