Apparel industry hit by cancellation of orders: JAAF

• Manufacturers asked to halt everything from sourcing raw materials to delivery
• Industry asks govt. to extend concessions given to SMEs to big players as well
• Industry uncertain of way forward; says no idea when things would get back on track

By Shabiya Ali Ahlam
Sri Lanka’s largest export revenue earner, the apparel industry, is bracing for a massive blow amid increased order cancellations as coronavirus (COVID-19) pandemic is crippling the economies of its key buyers.

“There is a serious cancellation taking place. A whole lot of retail stores are being closed for a long period of time. We have been told to hold the production, not to buy fabrics and not to deliver goods. There are no more orders. The situation is terrible,” Joint Apparel Association Forum (JAAF) Secretary General Tuli Cooray told Mirror Business.

Earlier this month, the industry forecasted a loss amounting to about US$ 510 million, following a disruption to its supply chain. The sector was unable to import fabrics from China to feed the production cycle. The loss was forecasted on the assumption that no orders would be cancelled.

However, the COVID-19 spread spiraling out of control in major buying countries has placed the local apparel sector in a vulnerable position, a position where for the first time its stakeholders are unsure when and how they would come out.

“The way forward we do not know. We could not produce goods that we wanted earlier because we didn’t have the fabrics. Now we are getting orders to halt everything. The question now is, when are we going to get back on track? We really do not know,” said Cooray.

When queried about the loss the industry would suffer, given the recent development, Cooray said the industry is not in a position to share a number as yet, since cancellations are still coming in. 

This Sunday morning alone the industry witnessed cancellation of over 400,000 pieces.The JAAF leadership also pointed out that the local situation, the country being put under a curfew to contain COVID-19 from spreading in the island, is adding to the woes of the sector, as the work that is available cannot be carried out.  
In the second week of March, the apparel industry reached out to the government requesting to provide the small and medium enterprises (SMEs) engaged in apparel manufacturing some breathing space.  

With the situation taking a turn for the worse, Cooray shared that the industry had gone back to the government and made representation to extend the measures proposed to cushion the SMEs to the big players as well.

The apparel sector generated revenue of US$ 5.3 billion in 2019, a 5.1 percent increase from the previous year.

For 2020, the industry was eyeing 6 percent export growth, which was expected to come from the US and EU markets.

The apparel and textile industry accounts for 6 percent of the country’s GDP and over 40 percent of the nation’s exports. It provides employment to 15 percent of the country’s workforce.