Friday, February 3, 2023

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Exporters warn of present dollar crisis impacting SL revenue and credibility

High energy-consuming industries yesterday called on the government to get its act together and give some level of confidence with regard to its ability to come up with sustainable solutions to resolve the ongoing hours-long power cuts, a result of the prevailing foreign exchange crisis.

Manufacturing industry representatives expressed disappointment in the course of action taken by the authorities thus far in solving the massive energy problem the country is faced with. According to them, the country was not caught off guard by an escalating power crisis, but it is a result of clear mismanagement of the economy.

“Today we are dealing with a toxic combination, a power, and a fuel crisis. This puts all the industries in a very tight corner because you can be ready for some, but for others you cannot,” said Hemas Holdings Executive Director/Hemas FMCG Managing Director Sriyan de Silva Wijeyeratne.

Addressing a webinar on ‘Navigating through the Power Crisis’ organized by CT CLSA, he pointed out that industries have been taking measures to stay afloat, but the real challenge is sustaining so that businesses continue to stay afloat.

For export-oriented companies, such as Hela Apparel Holdings, managing the power crisis internally is only one of the many daily challenges that need attention.

 Convincing buyers deliveries will be made on time as scheduled is a risk they need to take on a regular basis. “There is the narrative that we need to maintain with our customers who have a certain concern around our ability to deliver with these shortages. 

And that is a difficult narrative to manage,” said Hela Apparel Holdings Group Chief Executive Officer Dilanka Jinadasa.

According to Walltile PLC and Lanka Tiles PLC Managing Director Mahendra Jayasekera, there is an absolute lack of confidence in the policy-making process as well as the signals that are being given.

Businesses are increasingly finding that there are no sustainable solutions coming from the policy-making bodies.

“There is no way we can run our operations without energy and running operations on generators is not a solution. It does not work that way,” said Jayasekera.  

Joint export associations and chambers yesterday urged the Government to take immediate steps to find solutions to the ongoing energy crisis, as the prevailing situation has begun to impact productivity and that could impact revenue earned by the industry for the country.

The associations pointed out that the shortage of power and diesel for logistics is already impacting production and supply chains, and warned the situation could significantly impact Sri Lanka’s reputation and credibility as a destination that could deliver.

the apparel sector is aiming for $ 6 billion in exports in 2022, but the prevailing crisis has put a damper on this figure, with costs mounting due to impacts stemming from the crisis.

Losing credibility is very dangerous, the participants echoed, as it would impact the future and remarked that it would be very difficult to attract buyers back to Sri Lanka. Over the past two years, industrial exports sustained the foreign income of this country and these industries need to be protected, the associations said. 

The Ceylon Tea Traders Association lamented the lack of diesel had impaired transporting teas to the Colombo Tea Auction last week, which had then been shifted to this week. 

Its Chairman Manoj Udugampola, added value addition in terms of packaging and marketing was essential for Ceylon Tea to maintain its edge in the world market, and Sri Lanka’s position was now under risk due to delays and shortfalls stemming from the crisis. “.

It is very inefficient for the industry to work with generators, as its costs about Rs. 30 per kilowatt over grid power they revealed. What is happening today is yet to yield its full impact on the export sector, and the country needs to act now and avoid a disastrous situation, the exporters associations said. 

They urged the Government to draw up a plan with viable sustainable solutions that can offer medium stability to all sectors. 

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