Measures proposed to minimize virus impact on apparel industry

• Requests govt. permission for 90 hours of OT per month from current 60 hours 
• Asks for clearance for weekly charter flights if need arises 
• Requests to make foreign currency denominated loans eligible under CB’s credit support scheme 

By Shabiya Ali Ahlam 
Sri Lanka’s apparel sector has presented a paper assessing the possible impact of coronavirus (COVID-19) on the industry, which also contained proposed measures that would help safeguard the small and medium-sized industry players.

Joint Apparel Association Forum (JAAF) Secretary General Tuli Cooray said three key measures proposed to minimize the impact of the pandemic on the country’s apparel industry was presented at a multi-sectoral meeting chaired by Prime Minister Mahinda Rajapaksa on Wednesday.

The proposals were made moving forward with the assumption that no orders would be cancelled, Cooray said.

The industry has sought government assistance in the areas of extending over-time (OT) hours, ensuring minimal disturbances to logistics and providing financial support to small and medium-sized industry players.

Certain fabrics from China would be available for processing in the coming weeks, which would allow bulk of the manufacturers to kick off operations, the industry has requested the government to extend OT hours from the legally permitted 60 hours per month to about 90 hours for four months starting June to catch up on the lost capacity. 

Stressing that the relaxation is requested to meet the legal and compliance requirement, Cooray said the excess OT hours will be paid as applicable.

With logistics being one of the major concerns for the industry to get finished products to its buyers just-in-time, Cooray said the industry will negotiate with independent service providers to offer weekly charter flights during the challenging period, for which clearance for such an arrangement is sought from the government. 

He stressed this option would be explored only in the event standard service providers fail to offer reasonable freight rates for the increased demand. Lastly, to ensure continued operations of small and medium-sized industry players engaged in the sector, the industry requests banks and finance firms to grant adequate loan facilities subject to the Credit Support Scheme referred to the Central Bank Circular No.1 of 2020, with immediate effect.

To facilitate the same, the industry requests the government to revalidate the circular by making foreign currency denominated loans eligible as well. The industry also requested the government to allow the small and medium-sized industry players to delay their payments, if any, to government and statutory bodies for the next six months. This includes payments to the Board of Investment (BoI) and State utilities among others. The apparel sector earlier this week said it estimates a loss of US$ 510 million in the coming months due to the COVID-19 epidemic, and is unlikely match or exceed the US$ 5.3 billion exports achieved in 2019.