Garment factories driven overseas due to high overheads here; already 15,000 workers face job loss this year

Category: GARMENTS

Country: Sri Lanka

Region: Asia

By Chaminda Silva
Published 28th November 2022

Around 15,000 garment workers employed in free trade zones would lose their jobs in 2023, Convener of the Free Trade Zone Workers’ Center, Gamini Ratnayake said.

He said there were 148,000 garment workers in 14 free trade zones. It was likely that a number of other factories too would be closed down after new tax laws are implemented, he said.

“Recently, one of the largest companies announced that it would close its factories in Katunayake, Koggala and Biyagama. It has asked its 5,000 workers who will lose their jobs to apply for employment to its factories in India,” Ratnayake said.

It was likely that many garment factories outside the free trade zones too have closed down, he said. However, there was no one monitoring these factories and there is no data available.

“The Minister of Power and Energy says power tariff will be increased significantly from January and there is speculation that there will be extended power cuts. So, a lot of foreign buyers are hesitant to give our factories new orders,” Ratnayake said.

The expenditure of garment factories has increased due to increased electricity tariff, he said.

“Now, we are finding it hard to compete with other countries that have much lower overheads. Therefore factory owners are already taking steps to shift to other countries,” he added.

Courtesy: https://island.lk/garment-factories-driven-overseas-due-to-high-overheads-here-already-15000-workers-face-job-loss-this-year/