Diesel shortage adds to manufacturers’ distress

• Manufacturers struggle to even come up with short-term plans
• Ask govt. to share plans to come out of crisis so businesses can align accordingly
• No plants functioning in full capacity ; high daily losses experienced

By Shabiya Ali Ahlam
Shortage of diesel in the country has added to the distresses of manufacturers given that they are no longer able to plan their way forward with frequent hurdles faced, latest being the daily power cuts.

A select group of industry representatives engaged in manufacturing and exports told Mirror Business that their woes have multiplied. A daunting task it has become to chart the way forward, even on a weekly basis.
Industry heads expressed that while they are ready to brave through the ongoing challenges, it is becoming increasingly difficult to find solutions given that the options are limited.

“If the government has a plan to come out of this crisis, we urge them to share it with us so that we can plan and schedule our work according to that. It is a struggle right now to move forward,” said Sri Lanka Ceramic Council Board Member Mahendra Jayasekara.

While the grid capacity has reduced, manufacturers are struggling to keep the production lines active. The standby generators only power the most crucial machinery. 

This again is not a sustainable solution though suggested by the Public Utilities Commission of Sri Lanka (PUCLS), since the country does not have the required quantities of fuel to cater to the local demand. 

The shortage of foreign exchange to clear fuel shipments, and other imports, has aggravated the situation for businesses. “We cannot go to full capacity even with generators. But then we can’t even rely on generators due to reduced access to fuel. At the moment we are rescheduling the functions of the plant, but we can’t do that for long. One more week like this and we will end up halting operations,” stressed Jayasekara.

For a well-equipped tile manufacturing plant, the daily loss incurred due to a three-hour power cut is about Rs. 15 million a day, and Rs. 200 million per month for a single factory. The economic loss due to the energy crisis is massive for the country.

Similar woes are experienced by the local apparel industry. While the apparel sector has been largely successful in the past to manage through crisis events, this time around the situation is not getting any better.

“It is difficult. We cannot go full capacity and it is obvious this hits our targets and then the delivery time. The three to four-hour power cut is bad enough, and seven-hour cuts will be a massive challenge,” said newly appointed Joint Apparel Association Forum (JAAF) Secretary-General Yohan Lawrance.

He shared that industry stakeholders have held several rounds of discussions on the impact of the energy crisis on the sector but it is unclear what the solutions from the authorities would be.

Meanwhile, sounding slightly hopeful of the situation improving was Ceylon Chamber of Commerce (CCC) Chairman Vish Govindasamy. He expressed confidence in there being some light at the end of this ongoing crisis tunnel.

“No business wants a power cut. But we know the country’s situation and the fuel situation. It is unavoidable. I am sure we are equipped with generators but fueling these is the issue,” acknowledged Govindasamy.
He pointed out that the government has assured fuel supply without hindrance and it is hoped that will be the case.