Forex crisis weighs in on industrial sustenance | Sunday Observer

Forex crisis weighs in on industrial sustenance

30 January, 2022

Footwear and leather products manufacturers are in dire straits due to lack of raw materials and components for the industry, a top official of an industry association told the Sunday Observer Business on Friday.

A majority of the manufacturers are badly affected due to the short supply of important raw material and components due to the foreign exchange crisis, Sri Lanka Footwear and Leather Products Manufacturers Association President P.G.D. Nimalasiri said.

A large number of industries have been hit by the inability to source raw material due to the forex crisis in the country and disruptions to the global supply chain. To manufacture quality products there are quite a few quality important raw materials and components that need to be used. If the current situation continues for a few more months, the impending collapse of the industry will be unavoidable, Nimalasiri said.  “As the head of the Footwear and Leather Products Association I had raised the matter at many forums and brought it to the notice of policymakers cautioning them of the impending danger to the sustenance of the industry which has grown to what it is today overcoming many hurdles throughout its journey,” he said.

Nimalasiri said the industry has spread through the length and breadth of the country though predominantly found in the Colombo and Gampaha districts.

The total direct and indirect employment generation through the sector is close to 300,000. The annual footwear requirement in the country is around 60 million pairs and prior to the pandemic the share of local manufactures was around 70% which has now  reached around 80%. Local manufactures have the capability and capacity to increase the share up to around 90.

He said the value of the footwear and  leather products sector exceeds Rs. 100 billion locally and the potential for exports is encouraging.

The Ministry of Industries, Sri Lanka Export Development Board and Industrial Development Board extend their fullest support to develop the sector.

Footwear and leather product exporters have established themselves as leading suppliers to global brands.

Renowned for producing a range of products from colourful rubber thongs to high-quality genuine leather shoes, Sri Lankan footwear manufacturers have transcended from being a mere manufacturer to creative design and production solution provider to global buyers. 

Export revenue from the footwear and leather industries increased by 300% between 2008 and 2018.

The Joint Apparel Association Forum of Sri Lanka (JAAF), the body representing the apparel sector called for intensive dialogue and greater stakeholder collaboration to resolve the current forex crisis, as well as legislative reforms towards a more sustainable medium-long-term trajectory for Sri Lankan apparel.

The Association officials expressed these views at the Association’s AGM recently.

JAAF past chairman, A. Sukumaran said  that the industry would likely face continuing disruptions to their supply chain over the coming year, making the need for continuous engagement across industry stakeholders an essential prerequisite to develop long-term solutions to the industry’s present and future challenges.