Letters | Coronavirus in Hong Kong: clothing suppliers need buyer support if textile industry is to survive the pandemic

The snowballing cancellation of orders will seal the fate of manufacturers who depend on these contracts for cash flow to pay workers’ salaries

Even with generous government support, the supply chain cannot survive if retail stores and brands do not honour contracts and find ways to work together

Reading Time:2 minutes

Staff hard at work in a garment factory in Hong Kong in July 1979. Continued cancellation of orders may effectively dismantle the apparel supply chain which has taken decades to build up. Photo: SCMP

Published: 7:00am, 15 Apr 2020Updated: 7:00am, 15 Apr 2020

For three months now, the novel coronavirus has brought the world to a standstill. Its massive impact has taken over cities and businesses. Not since the last flu pandemic decades ago have we seen the world so helpless, so desperate to find a way back to the normal way of life.

The textile and garment industry has been hit particularly hard, especially having already suffered damages from the import tariffs imposed on China by the US last year. The industry is doing what it can to find emergency support, particularly in alleviating cash flow difficulties.

In this regard, the Hong Kong government’s further enhancement of the SME Financing Guarantee Scheme and the HK$80 billion (US$10.3 billion) Employment Support Scheme for all categories of companies, and support by the Hong Kong Monetary Authority, would provide a certain extent of relief to all businesses and are very much welcome.

Our foremost concern, however, is our buyers’ commitment. Unfortunately, a large number of orders are being cancelled, including those already committed and in the process of production and shipment. We count on these orders to bring in the cash flow to stay afloat and to pay wages.

Abandonment of manufacturers may lead to … a social crisis, as many of the industry’s workers live pay cheque to pay cheque; their families will suffer, even go hungry

If the situation continues, our factories and downstream partners will be forced to close, effectively dismantling the apparel supply chain which has taken the last 30 years to build.

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.css-sioo19{color:#c79a00;}Letters | Coronavirus in Hong Kong: clothing suppliers need buyer support if textile industry is to survive the pandemic

Letters | Coronavirus in Hong Kong: clothing suppliers need buyer support if textile industry is to survive the pandemic