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By Ravi Ladduwahetty

The Government will set up a Rs. 1.5 billion universal footwear village at Homagama bringing all manufacturers of footwear under one umbrella to make it a thriving export oriented industry. The proposed venture also targets to cushion the possible loss of revenue from the apparel sector with the termination of the Multi Fibre Agreement in 2005.

The proposed universal footwear village will be set up on a 100-acre block at Homagama where it will be the epicentre for the twelve large scale manufacturers, thirty medium scale manufacturers and 1,000 small manufacturers with an investment of Rs. 1.5 billion, Minister of Rural Economy and Deputy Minister of Finance Bandula Gunawardena told the Daily News yesterday.

The Government will allocate 40 perch blocks to each of the 150 manufacturers after developing the infrastructure and they will be given the basic infrastructure for the semi- built factories on a 1000 square premises.

These factories will be constructed in three months. These manufacturers will be asked to prepare the rest of the structures to suit their needs, the Minister said.

A further highlight of the project is that there will be individual factories within the complex to manufacture soles made out of rubber, Poly Vinyl Chloride, (PVC)and leather while there will also be manufacturing facilities for moulds, packing materials and plastic heels.

These will serve as the sourcing points to these factories.

There are a large number of development banks and commercial banks which have expressed willingness to fund the project and the Indian Line of Credit could also be accessed. The Government will also offer a concessionary credit scheme to these manufacturers which will enable them to repay on a long term plan, the Minister said.

The Government will also procure technical and industrial cooperation from Italy, China, Taiwan and the United Kingdom which are all renowned for their shoes manufacturing capability as the venture is export oriented. The project will also offer direct and indirect employment to 30,000 employees in the first year. The Government hopes to get these manufacturers access to the local market at first and will also set up one hundred retail outlets as a promotion excercise.

This would also be instrumental in saving of valuable foreign exchange which will otherwise be incurred in shoe imports. Although exports will be done from the first year, the real hallmark in the quality of value added exports will be from the third year.

The Government will use this as a pilot project and based on the success of the project, the second such footwear village will be established in the Kalutara District.

This venture is a sequel to Prime Minister Ranil Wickremesinghe summoning the representatives of the national footwear industry to a meeting to discuss the grievances of the industry where it transpired that the imported shoes flooding the market was a drawback to the development of the industry.

It was also decided that the Tariff Commission be approached to combat the imports flooding the market and it was then that a decision was taken to levy an import duty of Rs. 100 per pair of imported shoes.

It was also decided at the meeting that an export oriented facility be made in Sri Lanka for discerning buyers overseas but the footwear industry was conceived as a solution for the industrial ills of the country and as a cushion for the potential loss of export revenue at the time that the Multi Fibre Agreement was to lapse in 2005.

Subsequent meetings were chaired by Advisor to the Prime Minister on Policy Planning R. Paskaralingam which had other key industry personnel such as Secretary to the Ministry of Enterprise Development, Investment Promotion Industrial Policy and Constitutional Affairs Ranjit Fernando, Board of Investment Chairman/ Director General Arjunna Mahendran and bettans Group Chairman Chandralal De Silva.

Another salient feature of locating the proposed universal footwear village at Homagama is that a majority of shoe manufacturers are located at Kssbewa, Maharagama and Homagama electorates, according to the Minister.

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