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By Kushani Ratnayake

Three major export industries namely the leather, footwear and ceramics unveiled a five-year plan to infuse productivity and competitiveness strategies into these sectors which have so far failed to achieve its maximum potential.

The Chairmen of three of the 16-industry Task Forces set up under the Ministry of Enterprises Development, Industrial Policy and Investment promotion presented the first in a series of sectoral plans for local industries to bolster economic growth and development at a workshop on 'Strategies for growth - How will the Industry Compete', at the BMICH.

Minister of Enterprises Development, Industrial Policy and Investment promotion, Prof. G.L.Peiris delivering the keynote address said that for Sri Lanka to generate national wealth and a rising GDP, industries must become more competitive in the global marketplace. "The complexities of globalisation and dependence on external economies, prompts us to rethink our strategies and approaches. With innovation, creativity, technology, HRD, flexibility and an open and transparent government, higher value products and services can be created, if industries work together as a team, appreciating each other's perspectives and needs, arriving at a consensus on strategies and policies to drive the industry forward".

Chairman of the Ceramics Industry Task Force, Sunil Wijesinghe in his presentation said that traditional ceramic manufacturing bases are moving from Europe, Japan and the US to areas in the East and South Asia. "This is to decrease manufacturing and material costs, therefore, we in Sri Lanka are in a good position to re-evaluate future market trends and leverage on key strengths available in the changing stance of the ceramics industry". Outlining the constraints and problems in the industry at present, Wijesinghe said that there is very little R and D within the industry which hinders technical capabilities and growth.

The ceramics task force has identified three strategic initiatives to help the industry address these constraints and become a leading supplier of ceramic products in the areas of 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.

With a gradual shift in global shoe manufacture from developed to developing market economies, the main benefactor in the process has been Asia, increasing its production share from 40% to 70% in the last two decades. "Although the footwear industry in Sri Lanka grew from US$ 27 million to US$ 70 million from 1993 to 1997, over the last few years it decreased to US$ 33 million in 2001," Chairman of the Footwear Industry Task Force D.C Nathaniel said.

The main contributory factors were, 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 and could given the correct input, easily overcome any unemployment problem resulting from the phasing out of the Multi-Fiber Agreement. There are opportunities to develop support industries, shift consumer interests to natural rubber based products as proposed to PVC which is banned in several countries and save foreign exchange through import substitution.

The Task Force proposals include enhanced financing facilities to enterprises, introduction of investor friendly labour regulations, amendment of holiday patterns, inclusion of footwear in the proposed FTA with the US, seeking duty free access to Europe through current trade negotiations, imposition of a floor price of US$5 per pair on imports of all footwear and the duty free import of leather until the Bata-Atha complex becomes operational, while strengthening and developing facilities available at the complex for the development of the industry.

The leather sector covers the entire spectrum of raw hides and skins to production and exports of a wide range of leather products. The aggregate earnings of developing countries rose from US$ 2.700 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.

"Unfortunately, Sri Lanka has been unable to cash in on the good fortune of our neighbouring countries, as not much attention is being paid to problems that were faced by the industry," said the chairman of the Leather Industry Task Force Nimal Samarakkody. "We have lost about US$ 7 million due to poor quality and improper collection of raw material," he said.

The Task Force proposes to set up private sector abattoirs with a system of incentives and creation of awareness programs among farmers, facilitation of more industry friendly financing avenues, initiating long-term sustainability of the Bata-Atha Industrial park to be set up 2004, promote growth of an accessories manufacturing industry through joint ventures, enhance R and D facilities, productivity quality improvement, product design and development, marketing assistance and re-engineering factories.

Secretary to the Ministry, Ranjit Fernando, said that there are 16 industries headed by a Task Force which will spearhead and initiate improvement and development of those industries to enable Sri Lanka to compete successfully within the region.

"This public and privet sector partnership is vital in our march forward," he said. "The paradigm has to be established now so that we can reap the benefits for the entire country very soon," he said.

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