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Using the right kind of packaging helps goods fetch higher prices and minimise post-harvest losses in transportation.

Deputy Chairman Ceylon National Chamber of Industries A.K. Ratnarajah said that little attention was given to packaging in the early days. "However, the scenario has changed now as packaging helps increase the quality of goods as well as presentation, thereby fetching a higher price for the product," he said.

The packaging industry is evolving throughout the world with new forms of presentation and rapid developments. Therefore, people engaged in packaging have to keep abreast of new knowledge and technology as machinery specially in flexible and print packaging becomes outdated within four to five years.

Prior to 1977, importers did not seek packaging unless absolutely necessary due to foreign exchange controls. But with the opening of the economy in 1977, the packaging industry developed quite fast. Sri Lanka was even ahead of India in the early 1980s due to the high quality of its finished product.

But factors such as market volume, unavailability of raw materials locally, high interest rates and the cost of power led to Sri Lanka losing its position to India in the early 1990s, he said.

As Sri Lanka is a small market, it is not financially feasible to go for modern machinery and technology. Most raw materials also have to be imported which forces companies to keep large stocks, resulting in the company's finances which could be used for development measures being blocked in raw materials.

"It is also not viable to bring large stocks as our requirements are low which results in less bargaining power. The high interest rates also deter people from investing in technology which is aggravated by the fact that machinery becomes redundant within a few years. All these factors have led to Sri Lanka gaining a back seat in the packaging industry," Ratnarajah said.

He cited another reason for the small market volume as companies purchasing packaging from Board of Investment (BoI) companies, which is easier than purchasing from non-BoI companies.

This thins away the profits of non-BoI companies as BoI companies are permitted to sell 20 per cent of their produce in the local market.

Though non-BoI packaging companies can sell to BoI and non-BoI companies, the stringent rules are a problem. Ratnarajah said that companies prefer imported material when they require lightweight packaging while they opt for local stuff when they need heavy packaging.

Therefore, procedures relating to non-BoI companies should be simplified to give them a chance to compete for business while some uniformity is required in the classification of BoI and non-BoI companies.

Ratnarajah stressed on the fact that a coordinated effort of training from the factory floor grade to supervisor grade is a dire necessity as this will definitely help upgrade the quality of the packaging.

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