Sri Lanka’s garment sector struggles with ongoing power outages By Reuters

© . Employees at the Broadway Kids (Pvt) Ltd clothing factory wait for the generator to turn on during a seven-hour power outage at the factory in a suburb of Colombo, Sri Lanka on March 3, 2022. REUTERS/Dinuka Liyanawatte


By Uditha Jayasinghe COLOMBO () – Indika Prasanna Kumara sets out every afternoon to try to find 200 liters of diesel for the Broadway Kids clothing factory in Sri Lanka so it can run its generators during power outages and continue to operate. “We have to search for several gas stations because of the shortages and then wait in line for eight hours or more,” said Kumara as he and two colleagues from the fuel search team threw their last pull into a generator at the plant, which employs 275 people in the field. the commercial capital of Colombo. “Once we have the fuel, we have to guard the cans because they can be stolen. People are so desperate for fuel.” Sri Lanka is facing its worst financial crisis in a decade, with foreign exchange reserves shrinking 70% to $2.36 billion in January. Due to the shortage of dollars, the island is struggling to pay for imports, which include food, medicine and fuel. Due to a serious shortage of diesel, several thermal power stations have been closed, causing power outages, sometimes for more than seven hours a day. Broadway Kids, which produces clothing for British brands such as Next, Matalan, Frugi and John Lewis & Partners, has been hit by regular power cuts and is one of dozens of clothing factories struggling to meet production targets. “We operate on very thin margins,” said Chula Dharmadasa, owner of Broadway Kids. “I’m already getting warnings from customers that if we miss delivery targets, we’ll have to air freight, which we can’t afford.” “Our orders will be canceled and buyers will move to competitors like Bangladesh,” he said, adding that the loss of orders from one company could affect the entire value chain and potentially lead to job losses. Garments are the second largest source of foreign exchange revenue in Sri Lanka and the sector just saw a pandemic recovery with export revenues rising 22.1% in January to $514 million, compared to January 2021. ‘CRITICAL’ In total, the sector has approximately 300 factories that generated revenues of $5.4 billion in 2021. “The situation is now critical as factories come to a standstill due to a lack of diesel for generators, personnel transport and freight transport,” said Yohan Lawrence, secretary general of the Joint Apparel Associations Forum, which is the largest clothing companies in Sri Lanka. The government has promised help is on the way. Uninterrupted power will be restored after March 5, President Gotabaya Rajapaksa’s office said in a statement on Wednesday, but did not offer a plan for how reliable fuel supply would be ensured. On Thursday, Rajapaksa appointed new energy and power ministers in a swift cabinet reshuffle. The power situation and fuel shortage have forced Broadway Kids to spend 400% more on fuel and generator costs, compared to the same period last year, driving overhead costs up. With fewer hours of work, workers are likely to be paid a third less this month for not working overtime, says Saumya Porage, Broadway Kids’ Human Resources Manager. The fuel shortage has also forced the company to suspend free transportation to employees. Because many private buses queue for hours for fuel, some workers choose to walk to work and start as early as 6 a.m. “I get up at 4:30 AM to cook for my family and leave for work. First few miles and walk the rest of the way,” said RM Manike, 43, a machine operator, of her 6km walk to work. “We’re afraid we’ll lose our jobs.”

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