Factories face tough times in 2021
Companies in the investment zones are facing severe stress as a result of the pandemic that has resulted in increased expenses on testing for COVID-19, a tight order situation and staff turnout dropping by 25 per cent.
Factories are operating as usual but with a less number of staff due to certain reasons since some employees are reluctant to report to work amidst pressure from families while other companies have scaled down operations both in the apparel and non-apparel industries, Free Trade Zone Garment Manufacturers Association Secretary General Dhammika Fernando told the Business Times.
He noted that due to the pandemic some companies had found orders getting cancelled and future orders not forthcoming.
Moreover, as a result of the current situation in most of the key markets that buys from Sri Lanka particularly in apparel there has been a drop in orders as consumers are unlikely to go out purchasing. Most of the European markets are under lockdown either partially or on full scale.
Those companies with an increase in orders were the ones capable of manufacturing Personal Protective Equipment (PPE), Mr. Fernando explained.
He noted that those companies engaged in the manufacture of products like rubber gloves for surgical and non-surgical nature are in demand; in addition those producing electronic items have benefited since their products are in high demand as the medical sector requires fibre optic-based medical equipment.
In this respect, companies still engaged in the manufacture of traditional apparel and fashion industry are faced with less work. Mr. Fernando also noted that there is a possibility that there could be a repeat of 2020 this year as well in terms of the order situation. Sri Lanka was receiving orders for export but following the October second wave there has been a drop as a result of certain orders being diverted to other countries, he noted.
Meanwhile, he also pointed out that there is a concern in the government’s management of the quarantining of expatriate workers in Sri Lanka.
He explained that these expatriates are not allowed to select the hotels of their choice to stay in but are arbitrarily assigned hotels by the authorities.
“We want to pre-book certain hotels but the government does not allow that,” Mr. Fernando said adding that this needs to be streamlined since some of the hotels are not conversant in handling these kinds of guests.
In addition, factories are facing a huge crisis as they are compelled to spend large sums of money in carrying out PCR tests on their staff, he pointed out.
For instance, he noted the Katunayake Zone has carried out 19,000 PCR test in line with the requirement to ensure that 1 per cent daily or 5 per cent weekly tests need to be done incurring a cost of Rs.128 million.
Despite requests by factories to replace these with the Antigen tests, it is learnt that this was not accommodated by the Epidemiology Department.
However interestingly, when the workers were to be sent home for the holidays the authorities had insisted that antigen tests be carried out on the staff prior to leaving.
Another key concern is that the companies were facing issues as a result of carrying out disinfection of premises and close contacts being identified even when one worker detected positive, other officials told the Business Times.
They explained that this process that had to be carried out left them with no choice but to shut down operations from time to time as a result of which they were finding it hard to meet their orders.