According to Economynext.com, a Sri Lankan news website, Sri Lanka’s Teejay Lanka Plc, a leading circular knitted fabric manufacturer for intimate apparel and sportswear that swung to masking fabric making during the COVID-19 pandemic, says a global shift in supply chain diversification and lower cotton prices would moderate the impact of the crisis.
Chairman Bill Lam said in the company’s annual report to shareholders, according to the new site: “Looking ahead, the US-China trade tensions may have significant implications for garment centers like Sri Lanka and others in the South Asian region.”
“Supply chain strategizing to sustain a country’s total supply chain and reduce its dependency on a single destination may become a reality in the future, with consolidation within industries also part of the impact of COVID 19.”
Teejay has shifted to making fabrics for personal protective equipment ( PPE). “This strategic decision was taken to ensure that Teejay can continue producing masks in case COVID-19 lingers longer than planned or there is a second wave,” Lam said.
“On the other hand, if COVID-19 is brought under control soon and economic recovery in export markets is seen, Teejay can revert to business as usual, supported by its strong relationships with buyers.”
The company said its knit fabric for women’s undergarments and loungewear may not have a “full impact” on the company since they are essential in comfort wear.
Many end-market stores in the US and EU have been closed but new PPE customers have the opportunity. But there was demand from U.S. and EU supermarket customers while there was demand from Asia as well, though margins are expected to decline, it added.
“Falling cotton prices in recent weeks will help, Lam said.
Commenting on the fact that the company in a stock exchange filing said the Central Environment Authority made an inquiry on the sludge disposal process followed on July 16, the company said, “We had discussions with the BOI and the CEA and replied to the CEA as a result.”
“We reiterate that Teejay Lanka Plc has resolved the matter and that we are conducting operations with all the requisite approvals and guidelines provided for under the Environmental Protection License.”
Teejay Lanka reported March Quarter income of 421 million rupees, down from last year’s 605 million rupees. The group reported income of 2.3 billion rupees in the year to March, up 26 per cent from last year’s 1.85 billion, the study concluded.