Apparel industry gets no relief
View(s):The once thriving industry is today struggling to survive as the conditions granted in the relief package announced for all industries disqualified most in the apparel sector.
Sri Lanka Apparel Exporters Association (SLAEA) Chairman Rehan Lakhany told the Business Times “not even one factory has got that loan since a number of conditions were placed after the initial announcement of the relief package”.
The maximum turnover cap of Rs.1 billion per annum disqualified more than 90 per cent of the companies, he explained.
Moreover, the other conditions were that companies that obtain the loan must ensure no layoffs are carried out and this meant this money needs to be used to pay the salaries of workers.
But this was not possible as most companies would have to pay workers not working; in addition there is no payment guarantee from the Central Bank and banks want collateral, he said. Companies are unable to prove collateral as they have already obtained loans.
The moratorium on previously obtained loans has already been granted by some banks to some companies while not all have yet realized these benefits, it was noted.
Mr. Lakhany pointed out that most companies would pay salaries upto May but thereafter they would be unable to survive due to large scale cancellations of orders worth millions and workers demanding pay with no work or any orders pending.
The apparel industry is looking to the government to consider revising certain labour laws in a bid to overcome the current crisis as they are out of work like in the laying off of workers; suspension of EPF contribution for a period of six months; and allow workers without work to be paid an allowance or government to pay an allowance to workers.
“Following the law to the letter is a major hurdle so we are requesting the government to amend the laws at least temporarily to allow the factories to restructure,” the SLAEA chairman said.
Commenting on the concerns raised by trade unions, Mr. Lakhany pointed out that they must understand that the factories need to survive for the workers’ future. While some trade unions are said to have accepted this others are not willing to compromise, he noted. (SD)