Lanka to abolish duty free imports to boost $ 500 m boating industry

Introducing a much sought after measure of relief to Sri Lanka’s boating industry, the country will now introduce tax on boat imports that are largely duty free. “The duty free boat imports were allowed by the government in the aftermath of the Tsunami to re-build the fishing industry. But this has now adversely affected the overall boating industry since many vessels, including sub-standard boats, are imported duty free, dealing a blow to our $ 500 million boating industry’s competitive advantage. Having listened to the representations made by the representatives of the boating industry, I together with my officials have now decided to introduce taxes on boat imports from 2013 so that the emerging sector can forge ahead successfully” revealed Rishad Bathiudeen, Minister of Industry and Commerce last week.

“With the consultation of the Ministry of Finance, my officials will start formulating the relevant proposals targeting the 2013 Budget” Minister Bathiudeen added.

Minister Bathiudeen announced this in the aftermath of inaugurating the third international boat show to be held in the country. Called Boat Show 2012, the event opened on May 18 at the BMICH Convention Hall in Colombo to a large number of boating industry players and buyers along with boating enthusiast and industry professionals from many countries. The first ever “Boat Show Sri Lanka” was held in 2008 drawing more than 8000 local and international visitors.

According to the organizers, Boat Building Technology Improvement Institute Lanka (GTE) Ltd (BTI) and the Professional Exhibition Organizer is Lanka Exhibition and Conference Services (Pvt) Ltd, the Boat Show 2012 is South Asia’s most focused and largest international boat exhibition.

A large number of boating industry players and buyers along with boating enthusiast and industry professionals from different countries such as India, Pakistan, Maldives, Bangladesh, Singapore, South Korea, China, Germany, Netherlands, UK, USA among others, are scheduled to take part in this international event. Also on display were Sri Lanka Navy’s commercial boating ventures.

Addressing the event, Minister Bathiudeen explained, “Our international reputation for boat building has been confirmed recently when Seychelles announced to me that it looks towards Sri Lanka as its boat building hub. This great news has been conveyed to us by Foreign Minister of Seychelles Hon. Jean Paul Adams when he visited me in April.

This global recognition is a sign of the real potential of our boat building industry. Boat Building in Sri Lanka is an emerging export sector that continues to expand due to the wide variety of products and services it is capable of offering to international markets and its total annual production value now exceeds $ 500 million. This includes boating industry services as well.

There are around 25 active boat yards around Sri Lanka producing various types of boats and about 7 boat yards currently export their products. The best known sail makers of the world "North Sails" has their factory operating in Biyagama Investment Promotion Zone.

The export value of boats manufactured in Sri Lanka doubled in 2009 to US $ 58 million from $ 22 million in 2008. In 2010 the value of boat exports was US$ 59 million and in 2011 it has reached US$ 149 million which is a 149% increase and which I believe is a very promising growth rate for any industry in the country” Minister Bathiudeen said and added: “With the dawn of peace in Sri Lanka due to the leadership of Mahinda Rajapaksa, our President, the expansion in economy and specifically, tourism industry expansion, have also resulted in renewed interest in boating, specially the leisure and pleasure boating sector.

“I am glad to announce that my Ministry is willing to support marina development in Sri Lanka through the very institutional mechanism of the Ministry. My Ministry, with our industry participation, has already set up an advisory committee on boat building sector and has obtained allocation from treasury to conduct a feasibility study on setting up a dedicated boat park. Also, the 2012 budget has provided the much needed relief to the export production sector and I am happy to note that our boating industry also can reap these benefits.”

Neil Fernando, a pioneer boat builder and Chairman of Boat Building Technology Improvement Institute (BTI), addressing the event said: “Sri Lanka has now earned a place in the prestigious International Boating Industry Magazine. International visitors are surprised to find that such a large number and variety of boat production taking place in Sri Lanka. Among our boat industry sub-sectors, the commercial boat producers are increasingly picking up strong international orders.

These are mostly coming from Asia, Africa and Middle East despite the global recession. Buyers are now demanding more fuel efficient, cost effective boats towards which we should gear our processes. We need funding for research and development to advance the industry.

We also need infrastructure such as boat marinas to develop the sector. I am confident that the private sector will invest in this effort.

I would like to extend my sincere appreciation to the Ministry of Industry and Commerce and the Hon Minister for their sincere efforts in identifying our boat industry as a thrust industry and strongly facilitate its development.

The Export Development Board and the Ministry of Fisheries also played a vital role to develop our industry.”