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March 5, 2020

Sri Lanka sees orders slow as coronavirus hits main export markets

Sri Lanka is dealing with a fall in apparel order volumes as the coronavirus outbreak causes uncertainty among retailers and consumers.

By Hannah Abdulla

Sri Lanka is dealing with a fall in apparel order volumes as the coronavirus outbreak causes uncertainty among retailers and consumers.

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The industry is already suffering, like many others, from a delay in raw materials supply from China, which is seeing many factories stand down operations.

Rehan Lakhany, chairman of Sri Lanka Apparels Exporters Association told local publication EconomyNext that its export markets of Italy and Germany are being impacted by the spread of the virus.

“So what’s scary is our orders are being cancelled or reduced, which is going to be even worse,” he said.

The garment sector is Sri Lanka’s largest export industry, accounting for nearly 40%. 

Some factories are forecasting a 20-30% drop in orders from the next season onwards, starting in June, Lakhany said, adding he is concerned panic over the outbreak will stop consumers buying clothing.

“This is going to be a double impact, from one side we are getting hammered with sourcing raw materials and on the other hand, we have to face the reduction in order,” he told EconomyNext.

Lakhany added the raw material shortage is expected to continue until June, prompting some factories to close for about two to three weeks. Others may prolong the April new year holiday closures until fabric and raw materials arrive for them to start production.

The coronavirus epidemic has presented challenges for many countries dependent on fabrics and accessories from China, particularly Cambodia, Vietnam, Ethiopia, and Myanmar.

Earlier this week, Myanmar confirmed a factory closure due to a shortfall of raw materials from China, leaving over 1,000 employees out of work and Cambodian officials warned production would slow at 200 garment factories for the same reason. 

Click here for additional insight on the coronavirus outbreak: Is coronavirus a threat to the clothing industry?

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COVID-19 continues to dominate headlines the world over. It has already affected our lives forever. The way we work, shop, eat, seek medical advice, and socialize will all be different in the future. Quite how different remains to be seen, but all industries must plan for multiple eventualities.  Faced with an explosion of conflicting information on how to plan and implement successful recovery strategies, decision-makers are in dire need of a single, reliable source of intelligence.   GlobalData’s COVID-19 Executive Briefing gives you access to unparalleled data and insights to successfully navigate the uncertain road to recovery across the world’s largest industries. Understand every aspect of this disruptive theme by delving into: 
  •  COVID-19 infection update, with statistics on the spread, testing by country, as well as the latest data on vaccines and therapeutic developments 
  • Economic impact overview, covering stock market indices, GDP, unemployment rates, policy responses & GlobalData’s economic recovery scorecards 
  • Sector developments, with access to sector insight summaries, cross-sector indices and the leaders and laggards in each industry vertical 
Whatever your company’s imminent strategic plans, the long-lasting impact of COVID-19 must not be overlooked. Find out how to futureproof your business operations – download our report today. 
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