Major players in the apparel sector were sustaining their operations with the production of personal protective equipment (PPE).
CEO Hela Clothing Dilanka Jinadasa said that given that a vaccine would take over a year to develop it was likely that the usage of PPE would become more commonplace. Jinadasa was amongst other leading professionals of the apparel sector speaking on the PWC webinar series on 29 April.
Jinadasa said that his company had procured equipment for the manufacture of PPE. They aim in the medium term to get into more specialist niche manufacturing. Jinadasa said, “we are looking at the niche category to get some form of premium.”
PPE clothing has major customers in supermarkets overseas which have faced fewer operational restrictions and more buoyant demand. Major retail chains such as Debenhams, Mothercare, and JC Penney were facing problems before the COVID crisis and are now expected to have an accelerated rate of decline.
Group finance director Brandix Hasitha Premaratne said that customers need to be supported during these difficult times. Premaratne said “customers say if I die you die. They are such a large part of our business that it is important to consider their welfare.”
Premaratne predicted more consolidations in the sector. He said “we will have to change. There is a lot of industry consolidation that can happen. We have to look at our cost structures and look at whether we can afford them.”
Hela clothing’s operations have a large component-based in Africa.
Jinadasa on national comparative advantage said, “Duty is going to be a significant deciding factor on where they are going to source from and Africa has some of the best duty-free.”
Jinadasa was of the view that an earlier warning would have helped companies lower their level of inventories. Jinadasa felt the manufacturing of PPE would give his organization additional avenues of growth in the future.
The apparel sector is actively sharing best practices through their associations and other informal channels. The orders for PPE are also being subcontracted to smaller-scale producers.
The firms are taking risk assessments and then extending credit to their customers. In the instance of cancellations, the loss is being shared by the producer and the customer.
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