The government has requested Export Development Board (EDB) Chairman Prabhash Subasinghe to try to begin opening up factories back again.
The EDB has been assigned a communication point and has been requested to work closely with Police and law enforcement authorities.
Speaking to the public through an Advocata sponsored webinar on April 16 he said, “we need to think about running a marathon and not a race. We are looking at a minimum of 18 months before we can come to some level of normalcy. The reality is that we are not going to have the business we had yesterday. You need to understand that and get with the program.”
Subasinghe said that the coronavirus has a larger and more global impact on markets than the Second World War.
Subasinghe called on exporters to also realize the opportunities the crisis presents. “Demand for certain safety products have skyrocketed while the demand for essential products will remain buoyant when markets reopen and exporters must look at these new trends.”
Demand and revenues from fish exports had been strong. A UAE based importer had been flying private aircraft for the distribution of produce from Sri Lanka.
He called on exporters to be aggressive and leverage on the limited logistical capabilities available. The EDB is of the view that it is now a suitable time to seek a Free Trade Agreement with China and/or the broader ASEAN region.
The Export Development Board has revised national export targets from US $ 18.5 billion to US $ 10.75 billion. Merchandise exports have been targeted at US $ 7.5 billion from the previous target of US $ 13.5 billion.
Meanwhile CEO Brandix Ashroff Omar said that apparel is a sector that will face a lot of challenges. “Smaller players in the market are unable to meet wage bills for April and have stated so in formal communication.”
Omar expected 30-40 percent of players in the industry to be closed down.
He described the situation as having multiple negative impacts on both customers and suppliers. Initially, the virus hit China disrupting the major supply chains for apparel and then subsequently hitting major export destinations for apparel. “The industry is already facing cancellation of orders and retailers are seeking heavier discounts on the exported product.”
Omar believes even if the crisis does end it will take time for consumers to frequent clothing stores due to the perceived health risks.
Workers in the apparel sector are expected to have salary reductions of 25-30 percent due to loss of incentives, bonuses, attendance allowances, and overtime. The sector is facing a severe liquidity shortage.
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