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by Channa Kasturisinghe

The Government will take prompt measures to implement national growth strategies put forward by key industry leaders to increase productivity and competitiveness in the export sector, Enterprise Development, Industrial Policy and Investment Promotion Minister, Prof. G.L. Peiris said.

Some of the recommendations by the industry leaders have been already implemented and at present the Ministry is taking stock of the situation of other industries in order to take effective measures. The Minister was addressing a seminar on 'National Growth Strategies for tea, spices, coir and processed food industries' held at the BMICH on Tuesday.

The Chairmen of the four sectors unveiled their five-year sectoral plans to infuse productivity and competitiveness strategies into exports sectors at this seminar. The Ministry has identified sixteen industries to develop sectoral plans and task forces have been set up to culminate a dialogue between the Ministry Officials and the private sector. The leaders of footwear, leather and ceramics industries presented their plans to the Minister two weeks ago.

The said that some of the recommendations presented by the leather industry task force on tariff on issues have already been implemented by the Government.

"Industries in Sri Lanka unfortunately, were unable to perform to their maximum potential due to frequent policy changes, inadequate supply of domestic capital, poor infrastructure and the unfavourable security situation. The Government is making an attempt to change this situation through private and public sector collaboration. The Ministry once identified the areas which need to be addressed will provide them assistance with the help of the USAID," Prof. Peiris said.

Dr. Devapriaya Nugawela, Chairman of the Sectoral Task Force for Spices and Allied Products said that world trade in spices, related products and herbal products is estimated to be US $200 billion annually with an annual growth rate of five percent.

"But even though Sri Lanka's spices are famous for their inherent qualities and our herbal products have a history of over 2,000 years its annual contribution to the national economy is only one hundred million dollars. There has been no significant growth in the past 25 years in this sector in Sri Lanka, while India has achieved a ten fold increase," Mr. Nugawela said.

He said among the key areas that need to be immediate addressed were low levels of production and productivity, lack of research and development activities, implementation of regulatory and fiscal policies that inhibit industry growth, lack of industry quality standards, a strict monitoring mechanism and weak branding. "What we are planning is to increase exports in this sector to over 500 million US dollars and to increase the export volume of the value added sector by to 50 percent of the total exports within the next five years," Mr. Devapriya said.

Chairman of the Sectoral Task Force on Coir and Allied Products Indrajith Piyasena said that Sri Lanka is the world's largest exporter of coir fibre and products, measured by product volume. "But to varying degrees, all segments of the industry face threats to competitiveness, profitability and sustainability. Inconsistent fibre quality, low productivity at mill level, the lack of a quality based pricing system for coir fibre and declining markets due to competition from synthetic materials are some of the problems that are faced by the industry," Mr. Piyasena said.

Chaiman of the Sectoral Task Force for Tea, Mahen Dayananda said that Sri Lanka's tea industry is subject to volatility and long-term price pressures.

"To become more competitive, the industry must build on its traditional strengths to develop brands, create marketing alliances and move closer to end-consumers in its target markets," Mr. Dayananda said. Mario De Alwis, Chairman of the Sectoral Task Force for the Food and Food Processing Industry said that there has been a decline of actual investment in this sector since 1999.

"This can be attributed to a number of reasons. One of the key constraints faced by the industry is the high import tariff on raw materials and packaging materials where cost of production of locally processed food tends to be high. This create a disadvantageous situation when competing with imported products," Mr. de Alwis said.

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