In the wake of the second wave of the Covid-19, small and medium apparel factories are awaiting a thoughtful intervention from the government and other stakeholders for the sustenance of the industry, Sri Lanka Chamber of Garment Exporters (SME sector) Secretary General Hemantha Perera told the Sunday Observer Business last week.
According to Perera most of the SME apparel factories currently run below 50 percent capacity. “The situation in the second wave is different from the first. During the first wave production was halted and markets were shut down. But now markets are open but we face a fresh set of challenges to sustain production,” he said.
Supplying raw materials is the biggest challenge for SME sector apparel exporters. As raw materials in the possession of apparel SMEs would be sufficient for only two weeks, ensuring a smooth supply chain operation is critical for the industry.
“The proper operation of sea and airports is essential. At present, we face enormous challenges in cargo clearance. According to my understanding cargo ships are bypassing Sri Lanka as containers are stuck in ports,” Perera said.
He also stressed the need for monetary support from banks to maintain a healthy cash flow in their businesses.
“The Government moratorium ended last month and we have started repaying bank loans since October. But since a majority of our factories run below 50 capacity, it is difficult for us to maintain a steady cash flow,” Perera said.
He said labour laws are not helpful in a crisis situation such as this. “We value our workers. There is no argument about it. But flexible labour laws should be implemented as businesses need to survive.”
Despite some workers not reporting to work due to curfew and public transport issues, business owners have to pay salaries in compliance with existing labour laws. As apparel SMEs cannot afford paying salaries to workers who do not report to work, the Government must consider giving them a dole during this situation, Perera suggested.
There are about 60 active apparel factories in the SME sector with an approximate direct labour force of 35,000 which contribute between 20-25 percent of the apparel exports of the country.