Several companies of the Board of Investment (BOI) and Small and Medium Enterprises sector are expected to downsize or suspend operations following the April New Year, it was reported.
According to the Sunday Times, at least 30 per cent of BOI companies are downsizing and many are unlikely to re-start operations after the New Year holidays this year and 40 per cent of those in the SME sector are also on the brink of downsizing and closure.
Newly-appointed Manufacturers Association (MA) Chairman Dhammika Fernando stated this was due to Sri Lanka’s slow economic recovery, and the global economic downturn resulting in a lack of orders and business shifting to other regional areas.
The rising cost of production, making Sri Lanka about 25 per cent more expensive than other countries, has also resulted in the nation losing its competitive advantage, he said.
Dhammika Fernando also pointed out that logistics issues, such as the gazette issued concerning the imposition of new additional charges on freight costs and taxes targeting exporters have severely affected companies.
He also stated that about 30,000- 50,000 jobs are likely to be lost in the first half of this year, but some sections of the business community believe the conditions will improve in the second half. (NewsWire)