SME forum explores value-added coconut industry’s export potential

From left: Kantar Sri Lanka Director Himalee Madurasinghe, Good Market Co-Founder Achala Samaradiwakara, Cha’s Organics CEO and Co-Founder Chanaka Kurera, Industry and Entrepreneurship Development Ministry Secretary Thilaka Jayasundara, and Coconut Development Authority Chairman Shantha Ranathunga​

•  Experts dissect strategies to boost local coconut industry
• Industry and Entrepreneurship Development Ministry Deputy Minister Chaturanga Abeysinghe highlights importance of collaborative efforts, knowledge exchange to unlock full potential of value chain
• Opines industry’s priority must revolve around improving export competitiveness
• CDA Chairman Shantha Ranathunga says 1,500 m deficit in nuts exist due to gap between local supply and demand
• Says proposals of maximising awareness programs, cultivation programs, and minimising wastage efforts are underway
• Kantar Sri Lanka Director Himalee Madurasinghe describes significance of data collection in making informed decisions
• Good Market Co-Founder Achala Samaradiwakara suggests making sustainability a forefront of industry
• Urges prompt measures to strengthen supply chain efficiency, diversification and innovation

By Janani Kandaramage

The Industry and Entrepreneurship Development Ministry last week hosted an SME forum on ‘Value Added Coconut’ at the Sri Lanka Foundation Institute, Colombo, focusing on value-chain development and fostering dialogue on maximising the export potential of coconuts.

The forum witnessed the participation of over 50 individuals, including farmers, plantation companies, coconut processors, coconut value-added product exporters, industry experts, economists, and coconut enthusiasts.

With an engaging agenda, the event featured esteemed speakers including Industry and Entrepreneurship Development Ministry Deputy Minister Chaturanga Abeysinghe, Industry and Entrepreneurship Development Ministry Secretary Thilaka Jayasundara

, Coconut Development Authority (CDA) Chairman Shantha Ranathunga, Good Market Co-Founder Achala Samaradiwakara, Kantar Sri Lanka Director Himalee Madurasinghe and Cha’s Organics

 CEO and Co-Founder Chanaka Kurera.

The Deputy Minister expressed his gratitude to all the attendees for their active participation and commitment towards the growth of the coconut industry. He spoke of the importance of collaborative efforts and knowledge exchange to unlock the full potential of the value chain, enabling sustainable development and economic prosperity.

Highlighting value-chain integration as the foremost priority of the Government, Abeysinghe said: “The Government will be following a series of steps to address the SMEs problem, with particular emphasis on commodities like coconut. The first step is problem identification, where we analyse the root causes. From analysis, we have understood that fierce external competition from overseas is hindering the export competitiveness of our nuts. Hence, we must ask ourselves, what can we, as representatives from the Government and industry do to enhance its export competitiveness?”

He added: “Facilitating collaboration among all intermediaries in the coconut supply chain enhances value chain integration, leading to improved export competitiveness by streamlining processes, reducing costs, and fostering innovation.”

In addition, the Deputy Minister emphasised the need to elevate quality standards while catering to evolving consumer expectations. He urged manufacturers and processors to tap into the country’s diverse natural flavours, which inherently eliminate the need for preservatives or artificial additives commonly used abroad.

“Today’s society places immense emphasis on sustainability and wellness. Therefore, it is essential that we capitalise on these emerging preferences to provide coconut products that are natural, healthy, and environmentally sustainable,” he opined.

The CDA Chairman however noted the path ahead is murky, discussing the industry’s key challenges ranging from — fluctuating nut prices due to excessive demand, insufficient raw materials to fully utilise industry capacity, and coconut oil shortages leading to escalating imports and increased risk for local industries as a result.

“The coconut industry faces a raw material shortage, limiting processing plants from operating at full capacity. In addition, we also face a shortage of coconuts which has created a gap in the supply of coconut oil that is detrimental to both industry revenue and consumer lifestyles,” he remarked with concern.

He also noted, “Fluctuating nut prices has led to price volatility in the market, driven by fluctuating demand, hindering producers’ ability to forecast and plan and maintain stable pricing.”

Ranathunga claimed bridging the supply gap in the coconut industry is paramount considering the 1,500 million deficits in nuts. He attributed this deficit to the heightening demand of nuts at 4,500 million when only 3,000 million is available to be supplied.

He also spoke of the number of hatching units currently available in the industry at 2,433 while the current total annual hatching capacity is at 2,190 million nuts, implying that the current unused capacity of the industry is at around 40%. In response to queries about the way forward, the Chairman explained the CDA’s vision for 2030—in achieving a high export income of $ 1.5 billion through the export of 4,500 million nuts and allocating 1,195 million nuts for domestic consumption.

“The Strategic Roadmap to achieving this target, is focusing on short-term, medium-term, and long-term measures separately,” Ranathunga stated.

In the short-term, CDA proposes to implement cultivation development programs and awareness programs on minimising coconut wastage and promoting substitutes to conventional products while importing dehydrated coconut chips to Sri Lanka in the medium-term. This importation aims to support the coconut oil industry by preventing shortages and generate net foreign exchange earnings. In the long-term, he asserts that by importing frozen white coconut kennels/coconut milk for kennel-based value-added industries, value-addition will be facilitated at a faster pace.

Kantar Sri Lanka Director highlighted the importance of elevating data collection in the country, as a means of deriving market insights, particularly in dynamic industries such as coconut.

She stressed the necessity of specific figures and accurate facts to effectively compare income disparities across urban and rural areas, global regions, and between genders, thereby enabling informed decision-making in businesses.

“From recent data studied, we have understood that there is not much of a difference between urban and rural income. This is because income earners in urban areas carry the higher burden of taxes, so their purchasing power is significantly reduced for utilities like coconut. Meanwhile, 87% of the local population are involved in some sustainable practices, suggesting the need for a greater shift to an environmental and wellness focus,” Madurasinghe commented, calling for industry and Government intervention that strives for coconut diversification and strategies to reduce cost.

Samaradiwakara, with her wealth of experience as Good Market’s Co-Founder, affirmed Madurasinghe’s remarks by noting the gradual surge of global coconut products, with a projected value of $ 53.4 billion by 2033. 

She said this implies Sri Lanka’s strategic position to supply health-conscious, sustainable and organic products; urging local stakeholders to utilise the country’s diverse natural offerings to meet the increasing global demand.

To encourage value-addition, she suggested enhanced organic and sustainable farming practices, diverse coconut-based products, and measures to reduce carbon footprint while encouraging fair trade and social sustainability. Coconut-based superfoods, coconut-based beverages, and coconut-based cosmetics can be expected to bolster export revenue from nuts, while eco-friendly farming and solar powered drying and processing units for production will make exports more appealing to foreign markets.

In addition, Samaradivakara reiterated the importance of strengthening supply chain efficiency, listing-developing blockchain traceability systems for transparent supply chains, enhancing cold chain logistics for perishable coconut based exports, and social enterprise models to empower smallholder farmers, as key pillars.

Although supply chain efficiency must be a foremost priority, she acknowledged the need to expand into premium markets like the EU, USA, Japan, and Middle East while promoting Sri Lanka as a ‘Sustainable Coconut Hub’ through eco-labelling and branding.

Pix by Lasantha Kumara