Three more months of a drop in apparel orders
Sri Lanka’s apparel industry is to face a further drop in orders in the next few months as a result of low sales volumes in the exporting markets. This has caused much distress to an already burdened industry that is trying to cut costs amidst an economic crisis in the country.
Former Chairman of Joint Apparel Association Forum (JAAF) and the head of Fascination Exports Noel Piyatilleke speaking with the Business Times said that within the next three months the industry expects a further drop in orders by 30 per cent.
Already the industry faced a drop in orders December to January and this is expected to continue into the next three months, he noted.
As a result of this situation, factories are adopting their own measures by providing less hours of work to staff and trying to keep the retrenchment at a minimal level, Sri Lanka Apparel Exporters Association Past President and Original Apparels Chairman Rehan Lakhany said.
However, there is concern among the industry as to how long they can manage the situation as Mr. Lakhany noted if it continues for too long the companies will have to take decisions on moving ahead.
Smaller factories are facing a worse crisis due to their tighter cashflows and as a result the impact is much deeper, it was noted.
Although there is no data available at present on the condition of the smaller factories, it is possible that some would have closed down as well.
Buyers are predicting a change for the better in the third quarter but the crisis in Sri Lanka is adding to the woes of the industry. “We have reduced the prices and trying to somehow manage the situation but it is not easy,” Mr. Lakhany said.
The apparel buyers faced a boom in sales when the lockdowns ended as a result of which all customers are said to have over purchased. But with the start of the Ukrainian war sales started to drop and buyers were finding it hard to clear their old stocks.
Mr. Lakhany said they too are facing a 30 per cent drop in orders since customers are not committing and due to the high costs and low confidence in Sri Lanka they continue to favour countries that are cheaper.
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