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| Sunday, 11 August 2002 |
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5-year industry plans to meet global market challenges The ceramic, leather and footwear industries have revealed their five-year sectoral plans for development to achieve maximum potential to earn global reputation for quality and value. Minister of Enterprise Development, Industrial Policy and Investment Promotion Professor G.L. Peiris said that 16 sectors have been identified for development to meet global market challenges. It is funded by the Competitiveness Initiative The first three presentations were unveiled at a seminar titled 'Strategies for growth - How will industry compete - A forum for change'. The presentations outlined the development plans for the next five years and the assistance the industries needed from the government to make it a success. Chairman of the Ceramics Industry Task Force Sunil Wijesinha said Sri Lanka's ceramic industry consists of three major export-led segments - tableware, ornamentalware and ceramic tiles. The strengths of the sector are its highly trainable workforce, relatively low labour costs, excellent management at factory level and confidentiality of design integrity in contrast to Asian copiers such as China. The constraints to the development of the industry are the lack of brand and quality recognition, understanding of consumers, cost effective energy sources, consistent quality in raw materials and lack of skills in advanced ceramic applications, eroding labour cost advantage and labour productivity. "The industry has tremendous potential for growth and employment generation if the necessary assistance is given" said Wijesinha. The Ceramic Task Force has identified three strategic initiatives to help the industry address these constraints and become a leading supplier of ceramic products. Initiatives are needed in the design and marketing excellence, supply chain management and the creation of centres of technical excellence. The aim is to create a Ceylon quality umbrella for worldwide recognition initiated through branding, publicity, and face-to-face meetings with buyers, have energy cost and internal supply chain management, process control and productivity improvement. There will also be an initiative to upgrade the technical workforce and leadership in new technologies and industries for advanced technology training, creating a certification agency, establishing linkages with international universities and upgrading technical facilities and equipment. Chairman of the Footwear Task Force D.C. Nathaniel said that although the footwear industry in Sri Lanka grew from US$ 27 million to US$ 70 million from 1993 to 1997, it has decreased over the last few years. Last year it decreased to US$ 33 million. The main contributory factors are cheap imports, stringent labour regulations, intermittent holiday patterns, high-cost of finance and loss of duty concessions. "The industry has immense potential and currently employs around 30,000 people. Given the correct inputs, we can easily overcome any unemployment problem resulting from the phasing out of the Multi-Fibre Agreement," he added. There are opportunities to develop support industries, shift consumer interests to natural rubber-based products, as opposed to PVC which is banned in several countries, and save foreign exchange through import substitution. The proposals of the task force include enhanced financing facilities to enterprises, introduction of investor-friendly labour regulations, amendment of holiday patterns, inclusion of footwear in the proposed Free Trade Agreement with the US, seeking duty-free access to Europe through current trade negotiations, imposition of a floor price of five US dollars per pair on footwear imports and the duty-free import of leather until the Bata-Atha complex becomes operational. Chairman of the Leather Industry Task Force Nimal Samarakkody said that Sri Lanka has been unable to cash in on the good fortune of its neighbouring countries, as not much attention is paid to problems faced by the industry. He said: "We have lost about US$ 7 million due to poor quality and improper collection of raw materials". The leather sector covers the entire spectrum from raw hides and skins to production and exports of a wide range of leather products. The aggregate earnings of developing countries rose from US$ 2.7 million in 1980 to over US$ 18 million in 1995 due to the relocation of the global leather industry to developing countries in South East Asia and South America. |
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