Sri Lanka mulls new CFT style unit to solve industrial woes

Sri Lanka is planning a cross functional team (CFT) style solution for woes of industrial sectors. 

“We will be forming a special unit to address issues faced by Sri Lanka’s industrialists, and manufacturers focused on exports” says Rishad Bathiudeen, Minister of Industry & Commerce. “Our main focus is to assist in issues of export oriented industries” he said.

Minister Bathiudeen was addressing a group of representatives (industrialists, manufacturers and exporters) of Sri Lanka’s rubber industry on Wednesday 11 at the Export Development Board premises of the I&C Ministry.

Speaking about the CFT style unit, Minister Bathiudeen said: “I am not just thinking of a solo mechanism by the Industry & Commerce Ministry alone but rather a collaborative effort of other relevant ministries, trade chambers, manufacturing associations and even Department of Customs to solve industrial issues speedily.” 

He added: “It will be a ‘one stop shop’ solution provider for our industry issues. The new unit will not be limited to rubber issues but will involve all industries in Sri Lanka” and declared “We will bring together high level decision making officials of various departments together in one place at the same time to help you all.”

“Initially we may hold it as an Industry Forum once every three months but we will gradually transform it to a permanent Unit thereafter” the Minister said. 

The group of Rubber industrialists who met the Minister on Wednesday 11 informed Minister Bathiudeen that they are burdened with high energy / electricity costs, among other issues. They also felt that current rubber exports in raw form needs to be increased from its present 23% share of total exports, as the raw rubber prices continue to climb in the international markets.

The representatives also complained of high tariffs on their import and export of rubber and requested that high tariff on furnace oil imports (used in rubber factories) be lowered. Another issue raised by them was the high labour costs.

The representatives viewed the announcement as very encouraging. Cheering the move immediately was the President of the Association of Small & Medium Rubber Product Manufacturers, Dilan Ilapperuma.

 “This is a very good step. Of course, it is long overdue” he said.

The share of the Industry sector in total GDP of Sri Lanka is 28.7% in 2010. The Industry sector grew by 8.4 per cent, supported by increased domestic and external demand with enhanced investor and consumer confidence.

Rubber based products, textiles and garments coupled with increased performance in the construction sector were the main contributors for Industry sector growth in 2010.  Sri Lanka reported US $ 737 million export earnings from rubber products in 2010 of which US $ 169 mil was earned from raw rubber volumes. Despite a slight dip in March 2011, international rubber prices continue to remain high and Sri Lankan rubber producers are now reporting record earnings, at times in margins of 200%.

The increase in rubber prices was mainly due to the rise in oil prices in the international market. 

Among the Industrialists meeting the Minister were Saiffudeen Jafferjee (Jafferjee Brothers), D. K. Rajapaksa (DSI Samson Group), Don B. Ilapperuma (Jafferjee Brothers), Don Desmond (Clinco Rubber Mouldings), Sarath Wijesinghe (Aqua Packaging), and Dilan Ilapperuma (President, Association of S&M Rubber Product Manufacturers). Also participating in the discussion were Rohantha Athukorala (Executive Director of the National Council for Economic Development) and Sujatha Weerakone (Director General-EDB).