Apparel exporters stay positive despite freakish outlook

Newly elected chief of the Sri Lanka Apparel Exporters’ Association (SLAEA) Aroon Hidramani spoke to Mirror Business recently on how the country’s apparel sector is gearing up to tackle 2021 after a tumultuous year marred by a global pandemic.

Although the outlook seems bleak at the moment, Sri Lanka’s apparel exporters are optimistic the sector will bounce back to what it was, with the help of the effective rollout of the vaccination programme.

Following are the excerpts from the interview.

‘‘The target is to get back to pre-Covid levels of business as soon as possible, but with the continued uncertainty in our key export markets, we will need more time to quantify our growth plans

What are the new product developments in the sector?
The main new product development in the sector has been in specialized PPE opportunities. In the immediate aftermath of the pandemic, we saw a number of the apparel companies manufacture masks of various types as well as disposable polythene garments. 

There was a large demand for these items when the pandemic broke out, but now that the dust has settled, and as countries like China ramp up their production of these commodity items, exports of the apparel based PPE items have started to decline. Where there is an area of possible growth is the supply of items such as surgical grade masks. Unfortunately, getting into these items is a lengthy and is an expensive process as the certification requirements for these items are significant. 

PPE items are fairly generic. However the opportunity for differentiation is limited. That said, there are a few companies working on technologically advanced solutions in this area which could lead to new avenues of exports in the future.  

‘‘The industry has been working very closely with the government in the setting up of the Textile Park in Eravur as this will be a big boost to local fabric manufacturing

As there is some progress in tackling the pandemic, what improvements observed in the order book?
Whilst most estimates for the global apparel industry predicted a 20 to 30 percent reduction in volumes for 2020-21, we are seeing some positive signs of orders returning, especially in the activewear and essentials categories.  The main challenge currently facing the industry, however, is to be able to get products made and shipped out in the timelines allowed by customers. 

Is there an export target for 2021, if so what is it? 
The apparel sector ended the year 2020 with a drop of 22 percent against exports achieved in 2019. Unfortunately, at the moment we are still trying to get a hold on what value the sector will achieve in 2021. 

The target is to get back to pre-Covid levels of business as soon as possible, but with the continued uncertainty in our key export markets, we will need more time to quantify our growth plans.  

‘‘Once people are vaccinated whilst the protocols of mask wearing, temperature checks, social distancing etc are maintained, we should be able to return to some level of normalcy 

What is the apparel sector doing differently, compared to what was done before, to move forward?

One of the lessons from COVID-19 was the over reliance on overseas suppliers to the industry. The first hit to the industry came as factories in China were closed down due to the pandemic which had an immediate crippling effect on the industry. 

The industry has been working very closely with the government in the setting up of the Textile Park in Eravur as this will be a big boost to local fabric manufacturing allowing Sri Lanka to import less fabric, and offer quicker turnarounds to customers due to more fabric being available closer the needle point. 

What changes required in the operative environment to gather momentum?
As you may know at the height of COVID, congestion in the port was a major problem. We are very appreciative of the efforts taken by SLPA and the terminal operators to solve the issues over congestion and for the greater part these have now been resolved. 

There are still some instances of delays but this is usually when a vessel calls out of schedule, often due to congestion in another port. 

The one area that we need to work on though is to get the shipping lines to get back to the same frequency of sailings, as in the wake of COVID there were some reductions in the number of vessels calling into Sri Lanka. Now that the Port of Colombo is back to being fully operational, we would urge the shipping lines to bring the number of vessels back to pre-COVID levels. 

What are the possible setbacks expected for 2021? And how is the industry gearing up to address them?
The biggest challenge not just to the industry but the country as a whole is to provide widespread vaccination for COVID-19.  

Once people are vaccinated whilst the protocols of mask wearing, temperature checks, social distancing etc are maintained, we should be able to return to some level of normalcy where manufacturing locations are able to continue their operations unhindered. 

This will be a great help in the ability of the industry to meet its commitments to our customers. As you may be aware the industry is committed to the vaccination of its employees and is working closely with the government to help fund the vaccinations needed. So, this can happen without any delay.