Creating conducive environment for industrialists is IDB’s contribution to Restart Sri Lanka

IDB Chairman Upasena Dissanayake

As an organisation that is committed to this sector, the Industrial Development Board (IDB), under the purview of the Ministry of Industries and Supply Chain Management, has taken many initiatives within a short span of time to enable the SMEs across the island. Sharing his views is IDB Chairman Upasena Dissanayake.

Dissanayake is the Founder Chairman of Aqua Masters Ltd., which is in the field of water purification technology. Having held key managerial positions for a number of years, he is considered to be a trendsetter in the field of water purification in the country. He has over 15 years’ experience in the retail sector in John Keells Holdings and has managed both retail and supply chain management in Sunshine Holdings for over 10 years as a member of its top management. He holds the Bachelor in Science from the University of Kelaniya and an MBA from the Post Graduate Institute of Management from the University of Sri Jayewardenepura.

Following are excerpts of the interview:

Q: What is the role of the IDB in brief?      

A: The Industrial Development Board was established 50 years back, with the objective to help grow local industries. In the 1970s we had everything in this country where we produced everything we needed; we produced tyres, sugar, paper, chocolate, vehicles, radio, and even transistors. During that period the necessity for this kind of an organisation was needed in order to support the growth of local industries. However, in the late 1970s the perception of industries took a different path based on the policies of the open economy. Trading was seen as the easier route that production and the shift was visible across the economy.

Q: With 50 years since inception of the IDB, has it been able to change the perception of industries to the better?

A: Yes, we see a lot of discussions about industries taking place in many circles at present. The general feeling is that we need to do something now, and the environment is ready for the local industries to restart.

Q: When you say local industries, do you mean already established industries or the smaller and the medium industries?

A: We have many industrialists in this country. There hasn’t been much Government support or institutional support. Despite this, they have been continuing their efforts. So now our aim is to gather these people together, give them the courage, the infrastructure supports, necessary frame works, the legal support, etc. Some only need a little push and the motivation that the environment is right for them to continue their industry. So we have to give that support. If we all get together, we can support these innocent people. Some of them have home based businesses. They do it with their family members in a very small scale, but they are doing a very good job, and making a very big contribution to the economy. We have to create processes that can help them and the IDB is at the forefront of this.

Q: The IDB’s responsibility towards the SME sector for is much larger at present. How did you deal with the inundation of cries for help?

A: COVID created a situation that pulled everyone down, not only production but even service industries. We were anyway going through a tough time prior to that and this was like a double punch. Even though some industries are yet to fully function, 70-80% will tell you that business is getting back, and we hope we can do better. This positive mindset is everywhere. 

The IDB has lined up many programmes together with the Ministry. For the first time the Minister has assigned an open day for the industrialists at the Ministry. Any industrialist can meet the minister to discuss their issues. The environment is conducive for industrialists at the moment, so they are looking at how best they can develop.

Also, when we were discussing industry issues, it came up that there are issues that need support from the other ministries, so the inter-ministerial task force was created, with the President. We have had three rounds of discussions. Some issues got immediate solutions. This is the level of strategic approach we are initiating at present.

Q: What are the specific initiatives the IDB has taken?

A: Many people come with different issues. There are some that are common to many, one being access to finance, working capital. With the banking and finance infrastructure we have in the country, it’s not easy to find a solution. To take loans for the current interest rates and invest on industries is not a joke. Also an SME can’t get a loan from a bank without collateral. So some people have a good industry, a good idea, or a production that they have made into a reality. But the banking and finance system is not flexible enough to understand this and see what kind of profit it can make and grant a loan. So we gave much thought to this issue, and with the help of the Minister, we approached People’s Bank. 

The IDB has an island-wide network, we have an office in every district with a skilful staff. We proposed to work together with People’s Bank. We have industrialists who want financial support, but if they go to the bank directly, they don’t understand the banking jargon. The bank asks for financial statements from last three years. These people don’t have such documentation. This is the gap that IDB can fill. We will bring the industrialists to the level that the bank requires, so that there won’t be a mismatch. We signed the MoU for this and expedited the process. It is called the One Digit Loan Scheme. We have set a goal to take 5,000 industrialists to this level in the next two years. Without developing the SME you can’t uplift an economy. 

As a next step, we want to create a bank specifically for industrialists, this has been mentioned by the Minister himself. 

Q: The IDB’s steps are all to boost the SMEs. SLIM is also doing the same with Restart Sri Lanka. Is there any chance for the IDB to get together with SLIM and go together in this path?

A: SLIM is an institute that can do a lot to the industrialists. We have to create a market opportunity to them, we have to train them to use marketing tools. 

As for creating a market for these industrialists, the biggest market in this country is in the government; the government purchase value and volume is huge for all the state institutes. Most of these are being imported. We have to turn this towards local production. This will be our next task. There is a clause named ‘Domestic Preference’ in the Government procurement process in the tenders. This has been completely neglected up to now. What we want is for domestic preference to be mandatory in the Government procurement guidelines. Through this we can open up a large market for the local producers. The IDB has a big role to play, to improve quality, get them the proper qualifications, set standards, etc. 

Q: How can SMEs approach the IDB to obtain this support? And what is the path they can take for the future?

A: We have an office in every district. You only have to speak to our staff there to get your requirement fulfilled.