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Sri Lankan Factory Bosses Playing ‘Catch Up’ on Orders with ‘Very Little Leeway’

Struggling to weather a third wave of Covid-19, Sri Lankan garment factories are fighting for survival with facility closures and new restrictions in place since April.

The impact is being felt by laborers who risk infection given the nature of factory work, often living in close quarters in crowded neighborhoods or dormitories, as well as factory owners struggling to keep safety measures in place and meet delivery deadlines while running at 50 percent capacity.

“If we go out of business, that doesn’t help the workers at all,” said Rehan Lakhany, chairman, Original Apparel Private Limited, citing the dire outlook, with factories forced to shut down for weeks when infections surged while already running at lower labor capacity and facing ocean vessel congestion and delays. Sri Lanka has 350,000 garment workers, and its businesses support approximately one million citizens. Much more as a percentage of the 20 million-strong population, as Lakhany pointed out, than Bangladesh.

Apparel factories across the country are seeking leniency and support from their partners. When Western retailers and brands suffered shutdowns and losses in early 2020, order cancellations were rampant, and requests turned into demands for longer payment windows.

Now, the manufacturers are asking, will global brands help with freight costs and delays as they suffer a brutal Covid wave?

“At this time, the customer is fine, the producer is in trouble,” said Mahika Weerakoon, CEO of Trendywear Private Limited, a business her mother started 33 years ago.

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“It’s been a lot of stress and anxiety as a factory owner. On the one hand, we are responsible for the safety of the workers and we have to ensure that they are tested, get provisions and help manage the quarantine. On the other, we have to ensure orders are met, and there is very little leeway in terms of deadlines with retail having opened across the world,” she told Sourcing Journal.

The point is being echoed across the industry, which had projected catching up with the 2019 apparel exports of approximately $5.3 billion. In 2020, that total dipped to $4.15 billion.

As of April, Sri Lanka garment exports were close to the levels seen in 2019, at $345 million compared to $342 million, up from the comparative $60 million in April 2020 when the country faced a near-total lockdown.

This time, clothing factories have been allowed to continue functioning despite the lockdown set off after the Tamil and Sri Lankan new year holidays when many workers traveled to visit families. Covid spiked with their return to factories.

“Let me put it this way,” Weerakoon said, “The first wave had me under constant claustrophobia…I couldn’t sleep, I didn’t know what to do. With the second wave there was more acceptance. With this third wave my doctor told me that I need to do something about my stress levels, chest pains, headaches.”

“As manufacturers, we are being bombarded with all sorts of things,” said Lakhany of Original Apparel. “The industry works on long orders that you have to ship in three to four months, and one of the biggest issues is meeting the target dates given the impact of the third wave. Even as we struggle to complete the work, one big issue is that air freight costs—now the only way to meet the deadlines—add five to six times the cost.”

“The problem is no assistance from any entity. We don’t have support from local government as it is going through a financial crisis; The European Union has assisted some countries with monetary support. But Sri Lanka has remained out of the radar. That is the reality,” he said.

As the Sri Lanka supply chain has become more sophisticated in the kind of orders it fills, more design-heavy, and catering to specialty needs, global brands have not shifted their focus from production there.

“The orders are there, it’s how fast we can catch up,” Siddharth Hirdaramani, the fourth generation of a family that has 15 factories in Sri Lanka and 22,000 workers, told Sourcing Journal. The group also has factories in Ethiopia and Vietnam. “Sri Lanka has always been a niche for the apparel sector. We’re not nearly as big as Bangladesh or India, but the apparel industry in Sri Lanka is known for its higher-value product and as social and environmental compliance industry leaders.”

It is clear that the size of the company isn’t enough protection. “There are three weeks to three month delays in delivery and we’re having a loss of sales,” he said, adding that running at 50 to 60 percent capacity is “extremely challenging in a labor-intensive industry.”

“From our point of view, the priority has been the health and safety of workforce,” he said. “We’ve tried to social distance as much as we can, but there is no way around the delays.”

Other changes have been endemic. “We have to change with the industry trends, specifically with the pandemic in 2020 when there were no orders, moving to manufacture masks, gowns, PPE, work-from-home clothing, hoodies with built in masks, athleisure, sleepwear—we’ve had to be flexible. That’s been key to our survival. As has the digitization journey,” Hirdaramani said.

He, for one, has seen hopeful signs. “Some of our customers have partnered with us on air freight, wholesalers have managed to get extended terms from their retail partners, and we are asking the others to support in the same way,” he said.

Sri Lanka’s garment factories—along with major brands and the government—need to extend a similar hand to their workers, labor advocates argued Thursday, citing the “devastating consequences” the current wave of the pandemic has wrought on their health, livelihoods and right to unionize.

With many factories open, workers have to huddle into tight spaces, and not always with sufficient protective and hygiene measures, according to the Clean Clothes Campaign, the garment industry’s largest consortium of labor groups and nonprofits. Many are also unable to adhere to social distancing in crowded boarding houses. Forced into these “infection hubs,” at least six workers have died from Covid-19 during this current wave and many others have fallen ill, it said.

“Factories are forcing workers to come to work during this wave of the pandemic,” Chamila Tishari, program coordinator at the Dabindu Collective, said in a statement. “If workers are infected, they have to wait many days before being quarantined or hospitalized. Even though garment-producing zones are playing a major role in the Covid-19 outbreaks, the vaccine strategy of Sri Lanka is not prioritizing garment workers.”

Sri Lankan unions have repeatedly called for the establishment of bipartite health committees in factories that would allow workers to have autonomy over their own workplace safety. Other factors, including wage theft, union-busting practices and climate-change-induced extreme weather, which can lead to flooding, are also exacerbating workers’ distress, they said.

The Clean Clothes Campaign is urging factory owners to take responsibility to ensure their workers receive what they are owed. In the case of brands, not only should they meet with trade unions to negotiate a “memorandum of understanding” on health measures, wages and bonuses, basic labor rights and a dispute resolution mechanism, but they must also sign a binding agreement on wages, severance and the right to organize. To enable Sri Lanka’s workers to “stand up for their own health,” they have to push for the creation of bipartite health committees as directed by local authorities.

“Brands and retailers have made large profits on the basis of the low wages of workers in the Sri Lankan garment industry,” said Palitha Atukorale, president of Progress Union. “The least they can do is to ensure during the pandemic that workers receive their full wages, get severance if they lose their job and can stand up for themselves. These major profitable brands and retailers have a moral obligation to sign a binding agreement that can ensure workers are paid what they are owed.”

Additional reporting by Jasmin Malik Chua.