Call to help ceramics industry to face challenges

Restructuring of loans, increasing the quota sold in the local market and reduction of high energy costs will help the ceramics industry to face the challenges of the global financial crisis.

President, Sri Lanka Ceramics Council, Dayasiri Warnakulasuriya said that the quality of Sri Lankan ceramics is equal or better than most Asian competitors and is comparable to that produced in the world but the global recession has changed our position and we are finding it difficult to market our products.

Therefore, we are requesting the banks to restructure the loans so that we have more time to settle the loans.

The industry doesn't want any waivers and we will pay the capital and the interest .

In addition the industry is requesting for 40% of the ceramics to be sold in the local market until the crisis period is over. At present, as BOI companies we are only allowed to sell 20% in the local market. In the event the BOI permits the companies to sell 40% of their production it will help save foreign exchange that is drained out of the country on inferior imports as well as save our companies from closing down.

In addition to these measures, if the government takes steps to reduce the high energy cost it will give new breathing space for the industry as energy costs are more than 50% of our production cost.

Chairman, Dankotuwa Porcelain Sunil Wijesinghe said, "we are not hoping for any growth but we want to survive.

He said that Sri Lankan products compete on quality while Chinese products compete on price. Once China started exporting we lost our market due to high freight rates and energy cost.

MD Noritake Lanka Porcelain K. Nakanishi said that after 37 years we are glad that we are surviving. One of the largest suppliers of ceramics in USA has filed chapter 11 while Wedgewood of UK with a 250-year history is almost bankrupt.

He said that if this trend continues the company won't be able to survive. Nakanishi said that compared to 2007 the company had spent Rs. 100 mln more while the company lost Rs. 50 mln due to exchange rate fluctuations.

General Manager Lanka Walltile, Niranjan Jayawickrama said "at a time energy prices are dropping globally we have been asked to pay unrealistic costs for energy.

The planned investment for the Meepe factory is on hold as our exports are affected due to the housing industry being affected in the USA. During the last three months our exchange loss was US$30 mln. In the event we curtail production several jobs will be at stake.

SG