Condominium Developers Association raises concerns over proposed protectionist measures in tile industry

The Condominium Developers Association of Sri Lanka (CDASL) yesterday said it was deeply concerned about recent proposals advocating for protectionist measures within the tile industry.

It singled out MackTiles  Chairman Mizver Makeen’s call for anti-dumping laws targeting the import of floor and wall tiles. CDASL said Makeen is attached to MackTiles, making his remarks seem quite self-serving. Furthermore, such proposals, if implemented without careful consideration, could have far-reaching consequences for both industry stakeholders and the general public.

At the heart of the issue lies the lack of substantiated evidence supporting claims of “dumping”. Without concrete proof, such allegations raise suspicions regarding the motives behind them and the potential for unintended consequences. Moreover, the proposed measures overlook the detrimental effects of monopolistic practices, which have long plagued the housing, construction, and condominium industries in Sri Lanka.

Monopolistic practices not only stifle competition but also stand in the way of innovation and quality advancements. By limiting consumer choice and exploiting market dominance, these practices drive up costs and erode trust in the industry. Furthermore, they hinder the growth and sustainability of the sector, further impeding progress and economic development.

The escalating costs of tiles also pose significant challenges for construction projects, impacting affordability and accessibility of housing and commercial properties. This trend not only exacerbates financial strains on developers and contractors but also undermines the broader goals of social stability and economic growth. Affordable housing is essential for fostering inclusive communities and driving prosperity, making it crucial to address the root causes of high costs.

In light of these concerns, the CDASL urges a balanced approach to policymaking—one that considers the interests of both consumers and local manufacturers. While protecting domestic industries is important, it must not come at the expense of consumer welfare or market fairness. Any proposed measures should be evidence-based and transparent, with a clear understanding of their potential impacts on industry dynamics and consumer choice.

Addressing the issue of “reverse dumping” is equally critical in ensuring market integrity and competitiveness. Unjustified price surges undermine fair trade principles and distort market dynamics, necessitating proactive regulatory intervention. Thorough investigations are essential to uncover any unfair pricing tactics and safeguard consumer interests.

Furthermore, the CDASL questions the rationale behind extending favouritism to feeder industries, such as tiles, cables, cement, steel, and others that lack substantial export earnings or workforce engagement. Such policies not only distort market dynamics but also undermine the growth potential of the housing and construction sector. By re-evaluating these policies, policymakers can foster a more conducive environment for sustainable development and economic prosperity. The unconscionable profits earned by the tile and cables industries, including companies such as Royal Ceramics, Lanka Tiles, ACL, and Kelani Cables, in 2022 and 2023, can be seen in their annual accounts, where net profits have multiplied more than three times over 2021, due to the restrictions placed on imports, all while growth and profits in the broader construction sector declined.

Accordingly, the CDASL believes that promoting a competitive and open market environment is essential for fostering innovation and driving long-term growth. By encouraging competition and entrepreneurship, policymakers can incentivise investments in research and development, leading to technological advancements and product diversification. A vibrant and dynamic raw materials market, including tiles, not only benefits consumers through greater choice and affordability but also contributes to the country’s overall economic resilience and competitiveness on the global stage. Therefore, any regulatory interventions should aim to strike a balance between protecting domestic interests and promoting a level playing field conducive to innovation and sustainable growth.

As a representative body within the industry, the CDASL emphasises the importance of responsible decision-making and thorough evaluation of proposed measures. It calls for dialogue and collaboration among stakeholders to find solutions that support long-term growth and competitiveness. By working together with all stakeholders, and promoting a free and fair market for raw materials, the CDASL believes that Sri Lanka can build a stronger, more resilient industry that benefits all Sri Lankans and contributes to broader economic wellbeing.