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| Sunday, 25 August 2002 |
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Innovation, new technology keys to success of industries by INDUNIL THENUWARA Innovation and the use of new technology are of utmost importance to make headway in any industry including ceramics, Charles Conconi, Director (Private Sector Development) The Competitiveness Initiative, a USAID-funded project, told the Sri Lanka Ceramics Symposium in Colombo. Other important factors are developing human capital; knowledge of end-customer; communications between companies and between private and public sectors; understanding the value chain and how each link can be leveraged for more productivity and profitability; and identifying linkages among industries. "There is the need to define a set of concrete strategies to overcome barriers to growth and capitalise on resources," he said. Conconi cited creating a policy environment for industries to expand and attract new foreign investment; establishing a cost leadership position to effectively compete with regional players and ensure viability in the long run; increasing international awareness and getting global recognition for Sri Lanka's ceramics industry; and fostering skills development and research by forming links with other institutions and US and European universities as important development strategies. "Sri Lanka should not rely on low value addition. Value addition and differentiation are necessary and could be effected anywhere in the value chain. Retailers and buyers or distributors earn most from ceramics at the moment while the actual manufacturer earns only about 20 per cent. We should focus more on value not volume, marketing the goods as products and not commodities, technology, information and knowledge, research imperative, innovation and quality and consistency," he said. Secretary to the Ministry of Enterprise Development, Industrial Policy and Investment Promotion Ranjit Fernando, who was the chief guest at the event, said industries now have to formulate strategies to face the challenges posed by happenings in other countries, and not just on their doorstep. "Cheap imports are flooding our markets now, but protection cannot be offered to local industries anymore. Governments cannot raise tariffs on their own to protect local industries as they are signatories to international conventions which prevent such tariff raises. Consumers also do not seek such protection as they may not want to buy things which are expensive and of low quality despite them being produced locally. Now we see a situation of moving from one extreme to another where all imports were banned previously, but now everything is allowed in," Fernando said. The Ceramics Cluster has the knowledge and the wherewithal to develop the industry, he said and added that with government assistance, the industry will be different five years down the line. Giving an overview of the birth and development of the ceramics industry in Sri Lanka, Chairman Ceramics Cluster and Chairman Dankotuwa Porcelain Ltd., Sunil Wijesinha said the industry could be traced back to 500BC. Bricks, tiles and crude ornamentalware belonging to this period have been discovered in the island. "However, the industry in this era had not progressed beyond this point," he said. Around 1919, ceramics had been identified by the colonial government as a sector which needs to be developed. The first industry-related factory was set up during the 1940s, which saw the birth of the industry in its present form. The establishment of the Noritake factory in 1972 boosted the industry, prompting many other ventures. The Ceramic Research and Development Centre (CRDC) was set up for the benefit of the industry. With the privatisation of the sector in 1989, the industry received an enormous boost. Now there are around 45 companies and ceramic exports in 2000 amounted to US$ 47 million. "The strategies which had been used those days do not count now; modern requirements call for measures to improve productivity, technology etc. The Ceramics Cluster was formed one and a half years ago with this objective in mind. "A cluster is different from an association as the former comprises not just manufacturers, but inter-connected players in an industry. "A cluster includes manufacturers, component manufacturers, raw material and machinery suppliers and support service providers. It is not protection-oriented and is more forward-looking than an association," Wijesinha told the symposium. He said the Ceramics Cluster is now working on a separate new technology and research and development facility for the industry and maybe develop the CRDC into something more. |
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