Apparel buyers worried over Colombo’s economic woes
Foreign apparel buyers visited Sri Lanka last week to assess the ground situation following the news of the economic crisis; clearly sending warning signs of a possible drop in future orders.
Two major buyers were in the country last week to understand the ground situation and whether they can continue operations here or would be compelled to shift their orders elsewhere, Joint Apparel Joint Apparel Association Forum (JAAF) Deputy Chairman and Omega Line Group Director Felix Fernando told the Business Times. Omega Line is an associate of one of the largest retailers in Europe, Calzedonia.
He pointed out that they have been giving their assurance from JAAF that they will be able to deliver the orders on time, however, “we can’t do it one hundred per cent.”
Mr. Fer nando explained that at present although the impact on big industries are lesser, the small ones have a big impact due to electricity interruptions and diesel shortages. “It’s a vicious cycle.”
In fact, he noted that other buyers were also expressing concern and were repeatedly calling or inquiring daily. “I don’t know how long we are able to go on like this.”
Sri Lanka’s factories have been facing a crisis following the electricity interruptions and the shortage of fuel in the country that has contributed to industries facing a host of issues in addition to their inability to obtain required fuel for their generators.
Mr. Fer nando asserted that even if electricity was restored in three to four months, buyers will not wait that long, since they don’t have that assurance.
He also noted it is important to see that all macro issues are addressed and commence debt restructuring soon for which if we go to the International Monetary Fund it will be advantageous.
Meanwhile, the crisis at the factories have aggravated to such an extent that workers are told due to the shortage of gas, tea and meals cannot be served to staff, said FTZ Union General Secretary Anton Marcus.
In some factories workers have also been told that they will be offered work for four days but pay will be given for six days; however, the attendance bonus paid every month will be deducted.
Staff at factories is paid an attendance bonus for reporting to work however; it is only deducted if they obtain no pay leave. Under the current circumstances where workers are asked to report to work only four days a week, unions claim it is unfair to deduct this bonus pay.
Mr. Marcus explained that employers have now taken the law into their own hands since the relevant authorities are not providing any remedial measures to overcome the current crisis. He pointed out that in future the employers might even resort to nonpayment of bonus and festival advance as the April holidays come around.
In this respect, the trade unions want to call for a discussion among the National Labour Advisory Committee (NLAC) unions and thereafter take up the matter with the Labour Minister.