Death knell sounded for local apparel industry | Daily News

Death knell sounded for local apparel industry

SLAEA asks for Retrenchment Law, EPF, ETF incentives:
Apparel workers in Sri Lanka
Apparel workers in Sri Lanka

The US $ 5 billion and 1 million employee - strong Sri Lanka Apparel Industry was facing death in the light of the vast cancellations of orders that the industry was facing from American and European markets in the light of Covid 19.

This is a catastrophic situation and where western markets have cancelled these orders where both western buyers and local manufacturers cum exporters are facing bankruptcy, Chairman of the Sri Lanka Apparel Exporters Association, Rehan Lakhani told Daily News yesterday. He said that one of the drawbacks which the local industry was facing that most of factories which were facing were that the products which they were manufacturing were seasonal and that cold not cater to the following season.

Another serious drawback that the European and American buyers were facing at present was that they wanted a 180-day credit limit unlike the present 30 day credit limit.

This is going to be a major impact on the economy as the industry provided 400,000 direct employment opportunities and a further 600,000 indirect employment opportunities, bringing the total opportunities to well over a million.

He also said that most of the exporters had their shipments cancelled while some of the shipments were at the work-in –progress level.

He said that some of the products which had scope in the existing markets were products such as Personal Protection Equipment such as gloves and gowns, which had only about 5% of scope of the international the international market.

He also said that the industry had made representations to the Government to bring in retrenchment laws, to suspend the EPF and ETF contributions from both employers and employees for a period of six months, 2. Provide a grant of all the factory girls a grant of their salaries for three months for factories employing less than 3000 employees.

He said that the government should retrench the 400,000 full time employees by 100,000 to save the industry.

However, he said that the industry would be saved in around six months if the government provided the above mentioned incentives. However, he said that Sri Lankan apparel exporters had a glimmer of hope if buyers of Chinese apparel products shift their production locations to competing countries like Sri Lanka. He also said that Governments of competing countries of Sri Lanka such as Bangladesh, Cambodia, Vietnam and Ethiopia were giving mass scale incentives for the apparel industry in the wake of this global crisis. For instance, Bangladesh provided its apparel industry an US $ 8.23 Billion grant while the Cambodian State has provided each employee US $ 40 while the companies are requested to provide only $ 30.


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