Sri Lanka's apparel industry, is bracing for a massive blow amid increased cancellations of orders as COVID-19 pandemic is crippling the economies of its key buyers.

In short term, there will be massive job losses in the apparel sector, Brandix CEO Ashroff Omar said and reiterated that May will be a very tough month for the industry.

“With the apparel industry you have factories with 500-5000 workers, and the trickle effect means the whole chain will get impacted. I believe May will be a very rough month for us. June will be tough. We do not see a good situation up until September at least,” Omar said during an online forum organized by Advocata Institute, a Colombo-based think tank.

“We have been talking to the government regularly. The bigger companies will be able to pay the basic wage for a couple of months more, but the smaller companies will struggle. the SME sector has categorically stated that they cannot pay salaries from April. I see a huge issue coming up end of April, early May unless some sort of an injection is given specially to the small and medium scale sectors. But to everybody else in the longer term,” he stressed.

Omar expects the demand to contract almost 40% for the whole year. But, the period from April - June could see as much as 70% - 80% drop , he said.

“If you look at the demand, we believe that there will be a contraction of about 40% for the rest of the year. But, if you look at April, May and June it is much more than that. It will be around 70% - 80%. Now this industry is about a US $480 billion export industry worldwide. We have only 1.5% of that. The biggest player is obviously China and they are working well. Bangladesh is semi lockdown. Vietnam and Indonesia is still working. So once the demand shrinks then there will be price war,” he said.

“Unless of course there is a vaccine, then happy days again. But you cannot plan that way,” he added.