Sri Lanka is making a renewed attempt to leverage its geographic advantage in the East-West shipping route, this time as a boat builder and marine tourism destination under the National Export Strategy. The five-year plan formally launched in July 2018 identifies boat building and its related services as one of five key industries to expand Sri Lanka's export basket and increase export earnings to US$ 28 Billion by 2022.
At the end of 2017, boat building generated an estimated US$ 150 million in export revenues, up from US$ 2.4 million in 2008, the first-year boat building sector was formally recognized under export industries. Boat building currently accounts for about 1% of the total value of Sri Lanka's exports. Sri Lanka's boat exports increased rapidly in the last decade, growing at an average annual rate of 17.94%. In the last five years, exports have grown by 44.6 % annually, with transportation vessels for both people and goods representing most of this growth. In recent years, exports of pleasure and sport motorboats have grown fastest and now represent 15% of total exports.
In formulating the NES, a core team of policymakers, private sector leaders and exports reiterated that Sri Lanka has the advantage for further industrial development given that it has some of the best natural harbours in Asia, a strategic location on the maritime crossroads of the Indian Ocean and experienced manufacturers. This, coupled with the strategy to backward integrate the industry to also manufacture boating related parts and services, could propel Sri Lanka into larger oceans across the globe.
Speaking with Business Lanka Magazine Mr. Gamini Herath, Managing Director of Boat Building Technology Institute Lanka (GTE) Ltd, shared the industry's vision to develop the sector as a leading export revenue earner in the near future.
Sri Lanka's strategic maritime advantage has been a key topic in many discussions surrounding the country's economic growth potential. However, the focus has remained in providing port services, transhipment services, bunkering services to commercial vessels plying the East-West shipping route and building smaller commercial crafts, including fishing boats, tugs and patrolling crafts, among others. It is a leader in motor boat and yacht exports among its regional peers and remains the primary exporter of boat sails in the world. The National Export Strategy (NES) aims to expand Sri Lanka's boat construction and servicing capacity, now focused on small vessels, into a renowned recreational boating hub and yachting service centre in the Indian Ocean.
Elaborating on the scope of the industry Mr. Herath stated that the boat industry covers boat building as well as after-sales services (including refitting and repair), marina services, associated recreational services such as boat charters and all services connected with the efficient use of any vessel.
Building an Industry As a relatively new industry, boat building operations will require specialised support infrastructure, specifically facilities to launch the vessels into open waters. Currently boats are built at inland facilities and transported overland to a handful of designated launch sites. This has resulted in increasing the cost of each vessel and requires a coordinated effort between road transport team, the police and other local services and sometimes road closures to accommodate the width of the boats.
Among the proposals in the NES is the development of a specialised waterfront industrial zone, similar to the Export Processing or Free Trade Zones in Sri Lanka. This facility will house boat builders and boating related component manufacturers and like other zones, could share common infrastructure and services needed by the industry, including a boat testing and launching facility. This will attract both new investment in boat facilities and international boat operators requiring services such as boat parking and maintenance.