Friday Nov 15, 2024
Friday Nov 15, 2024
Monday, 27 June 2022 02:13 - - {{hitsCtrl.values.hits}}
By Charumini de Silva
The confectionery industry has seen a 30% drop in overall production so far, as a reflection of multiple challenges they endured amidst the worst economic crisis.
The $ 150-200 million worth confectionery industry — had been struggling for the past two years to import raw materials, deal with the exchange rate, source fuel and find containers to ship their goods to export markets on time.
“We have seen a 30% drop in overall production so far. With no concrete plan from authorities on how to fix the problems, the stakeholders fear the production will further drop to 40% by next week,” Lanka Confectionery Manufacturers Association (LCMA) President S.D. Suriyakumar told the Daily FT.
He noted that the companies would have at least survived better, at least break even, had there been no shortage of raw material and fuel supply along with a proper policy to encourage exporters more effectively.
“All companies are faced with multiple financial, operational and distribution setbacks daily. The members are now focused on survival, but even that they find it extremely difficult to manage,” he added.
He said the industry is threatened by multiple challenges each year post-COVID with no signs of recovery this year too.
The mounting challenges of sourcing special raw materials such as flavours and fats have become a daunting task amidst the shortage of foreign exchange, energy, and soaring cost of production.
“Despite the challenges, we have not prioritised any production lines as they cannot be programmed that way. Our members are trying their level best to manage ourselves as an industry, but it is uncertain for how long we will be able to manage that way,” he lamented.
Claiming that the business situation in Sri Lanka was not very conducive for any investor, he said the economy would further suffer if no proactive measures were taken to protect the export industries.
Suriyakumar called on authorities to give utmost priority to protecting local industries, employees and livelihoods before all the cogwheels start to stop.
“Our members stand together as a 100% local industry because we strongly believe that it is the right path – otherwise the total economy will collapse if nothing is done right now,” he pointed out.
Given the dire straits of the industry, the LCMA President also said the members have spoken to Embassies to promote made-in-Sri Lanka confectionery products, as exports are the only way they could survive.
“We are thinking of expanding the export markets with the support of foreign trade missions. We have already had discussions with Ambassadors to help find customers and to promote our confectionery products,” he added.
He asserted that member companies had invested over Rs. 10 billion to bring in the technology and machinery to produce world-class confectionery products locally, apart from incurring costs on promotion activities to bring the ‘Made in Sri Lanka’ brands to the shelves of the leading supermarkets in European and African countries.
Suriyakumar said the initiative to promote confectionery products in new markets will be done as a private-public partnership (PPP) with support from the Department of Commerce.
“At the early stage of our export industry, our products were only sold in areas where ethnic groups were residing, but now our products are in leading supermarkets such as Tesco, Lulu and Walmart, to name a few. We export to over 50 countries at present,” he added.
In November 2021, the industry said they were looking to move production to more favourable overseas locations. However, the decision was later reversed after considering the impact it would have on the livelihood of over 550,000 people engaged in the industry and overall economy.
