China slowdown shakes local apparel industry

The apparel industry is facing a crisis as Sri Lankan factories are looking at the possibility of reducing work times and contemplating shutting down until China resumes operations.

The coronavirus outbreak in China has led to a number of cities being quarantined and causing concern among firms globally as the country is one of the largest supplier of accessories and fabric used in the manufacture of apparel wear.

Sri Lanka Apparel Exporters Association ( SLAEA) Chairman Rehan Lakahny told the Business Times that due to uncertainty of when China would come out of its current epidemic the apparel industry in Sri Lanka will be impacted with some factories likely to close their operations for some time or reduce their working hours if the situation continues and depending on the demand from each factory here.

While some factories in China are still not in operation and there are likely to be delays, some shipments were missed since even once they resume work most staff is not allowed to report to work with some factories working on reduced number of days and Chinese authorities also keeping a check on people going back to work. So factories are finding it difficult to start work and get their staff back from other provinces as well, reports stated.

It is believed that delays and low staffed factories are likely to create further impacts on the apparel industry in Sri Lanka and globally.

According to the World Trade

Organization (WTO) data, 37.6 per cent of world textile exports in 2018 came from China – a record high – with the country supplying almost two-thirds of the textiles used by manufacturers across South East Asia.

He noted that immediate requirements up to June would be hard to be channelled from other markets.

However, in the long term “we are all looking at different avenues but it depends on how long this problem goes on”.

Currently most manufacturers are in search of other sources of buying raw materials and accessories but China still is competitive compared to even India.

Within two weeks the situation is likely to become more serious as the local apparel industry is looking at taking their own measures to mitigate the problems they face.