Consequences of COVID-19

Cessia Murillo

The consequences of COVID-19 are being felt. Due to the health crisis that the country is going through due to the coronavirus; the textile sector up to May recorded about 150 million losses which represent 10% of the total amount received in 2019, according to the Association of Textile Industries of Ecuador (AITE).

The entrepreneur, Rafael González, president of the textile area of the Chamber of Small and Medium Enterprises of Pichincha (Capeipi); comments that, in order to avoid bankruptcy, several companies have reduced or suspended working hours in some cases, while in others the option was to lay off their workers to maintain the sustainability of their initiatives and adds that at the moment they are dedicating their efforts to medical supplies (masks, coveralls, safety suits).

The labor union representative also said that companies expect to catch up in no less than six months, as consumer preferences have been leaning towards basic necessities and medicines.

1.- How many textile companies are currently affiliated in Capeipi?

There are 182.

2.- Of these, how many work?

Just 43 small and medium-sized enterprises manage 45% of their capacity, compared to the start of the health crisis, which was only 3.5%. What we did was bring the machines to our operators’ homes so that they could start producing from there and find a solution to the problem.

3.- Have some of them unsubscribed due to the pandemic?

So far there is no disaffiliation, but there is concern for the market recovery.

4.- Of the affiliated companies, how many of them, due to lack of liquidity, had to lay off their employees? Estimated percentage of layoffs.

Most of the textile entrepreneurs represent about 18.5% nationwide and generate a source of employment in Ecuador. 10% have losses of $ 300,000 in the case of large and small $ 25,000 a week, which complicates the liquidity of organizations for which an estimated 275 employees have been laid off.

There were companies with about 70 or 80 people to make clothes, they did not work and did without the services of their collaborators. In addition, the government wants to add a special contribution that reduces economic resources to workers and companies.

5.- With the aim of reactivating, textile companies are currently devoting themselves to the production of medical supplies. However, what kind of problems did they have to overcome?

One of these are health permits; the local market is supplied only because we do not have the raw material, until two months ago before the pandemic. Fabrics like cambrela were found at $ 0.45 cents a meter, then $ 0.53 and now $ 2 too, there is speculation on the market; It was decided to work with antifluid fabrics that have a greater durability up to forty washes, are easier to obtain, are nationally produced and we have reactivated the work area, they are also environmentally sustainable as they have a longer useful life.

Another problem we found is that non-woven fabrics were imported from China; The Eastern Government prohibited the export of their raw material and they only wanted to sell the finished product, this was not convenient for us.

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