Processed food industry records steady growth

Anuradha Kodagoda

Investments in the processed food sector has been increased to Rs. 53 billion since 2002 with the high demand for processed foods in the market.

As an industry Processed food had a steady growth of 12 to 14 percent during the last few years compared to other industries in the country said the President of Sri Lanka Food Processors Association (SLFPA), Dhammika Gunasekara.

In 2002 the total investment of the processed food industry was Rs. 11 billion and today it has grown to Rs.53 billion.

There was a slight drop in demand in the market during last year due to the adverse weather conditions and the world economic crisis, but still there is favourable demand for the processed food industry. So as we believe to maintain this growth and the momentum in the industry we are engaged in many partnerships this year for the expansion of the industry,” he said.

“During last few years, Sri Lankan domestic processed food consumption has increased, due to the busy life style; people are having the habit of shopping in supermarkets and there is a high tendency of purchasing processed foods which save their time.

Therefore there are more opportunities created for value added food products in the market for the local manufacturers, since people are moving from raw products to instant food products. With these developments a huge demand has been created with in the country” he said.

However due to the global financial crisis there can be an adverse effect for the process food exporters.But there are many opportunities available in the processed food industry within the region such as in Malaysia, India and Singapore markets. According to SLFPA, the main disadvantage of the export market is that, the exporters who only looked at the lucrative markets in the West have now lost the demands due to the current economic recession.

Therefore to survive in the industry by minimizing their risk factors, the exporters have to get in to the local market and also seek the opportunities within the region as well,” he said.

“In Sri Lanka, in the processed food industry, both import and export markets are playing an equal role. Most of the dairy products, herbs and packaging materials are coming in to the country while tea, spices, fruits and vegetables and various tinned and canned foods are exported from the country. Therefore in the processed food industry, both and exports are going hand in hand to success the industry,” he said.

“For this year, our target growth rate is 12 to 14 percent and we are having positive thoughts that this projection can further expand due to the dawn of peace in the country as there’s a potential of markets being available to expand our business in Northern and Eastern provinces. And also this situation can lead to arrival of tourists where we can expand our business further” said Gunasekara.

“Today only the urban markets are purchasing processed foods, but as processors we have to look in to the potential and cater to the demands and the needs in the rural markets. So we believe the challenge in the processed food industry is to cater to the demand of value added foods and expand the market share in rural areas as well in our country”, he said.