Apparel sector shows signs of recovery from pandemic; but worries persist beyond June

• Currently some factories running at 80% to full capacity, due to PPE orders
• But such orders expected to dry up from end-June
• Despite gradual lifting of lockdowns in SL’s key export markets, orders are yet to come 

 By Shabiya Ali Ahlam
Sri Lanka’s apparel sector is showing signs of recovery from the impacts of the pandemic, with the lockdowns being carefully lifted world over but the industry players expect to receive a new hit come July, as demand for safety gear, which has helped many manufacturers stay afloat, is likely to decline.

According to the Sri Lanka Apparel Exporters Association (SLAEA), business is slowly getting back to normal, with some factories running at 80 percent to full capacity, whereas some are yet to come out from the impact with no orders.

“We are slowly recovering but it is a mixed situation. There has been a fair bit of business because of masks and safety gowns but that is expected to finish by end of June. Month of July to September, that is what the industry is worried about now, as to how the situation is going to turn out,” SLAEA Chairman Rehan Lakhani told Mirror Business.  

Even though a number of markets, such as the UK, that source apparel from Sri Lanka, are opening up from this month, no confirmed orders have come through as yet that would allow the factories to operate at full capacity, from August onwards.

“That is where the worry is actually – the drop in sales in the western world. With countries opening up, we are hoping Sri Lanka will get some orders but the issue is that it is beyond doubt that the sales are not going to be as what they were pre-COVID,” he said.

According to Lakhani, a majority of the manufacturers would operate their factories at a loss, even though they would function at reduced capacities. But their fixed costs would remain the same, placing them at a vulnerable position. 

He pointed out that the factories are embracing that reality and are trying to survive through this crisis period and are looking to get back to normalcy.

While a collective effort from the industry is not possible to secure orders for Sri Lanka, Lakhani said that individual companies are doing what it takes to pull as many orders as possible.

“Hope is that if we do get pass this stage, with the animosity the western world has against the products made in China, there is a chance where Sri Lanka could make use of that and pull some of those orders in the future. But right now, the main challenge is to survive to take advantage of that eventually,” he said.