Despite the drawbacks of the anticipated economic recovery in the European Union and the United States not taking place and also the unsettled conditions in the Middle East, there has been a commendable increase in the country’s export earnings in June this year, said Bandula Egodage, Chairman and Chief Executive of the Sri Lanka Export Development Board .
Addressing the 16th annual general meeting of the Exporters’ Association of Sri Lanka as the guest of honour, Egodage said that according to provisional Customs data, Sri Lanka’s export earnings had recorded a commendable increase in June this year and exports to our key markets USA and EU, especially to the USA, had also shown a satisfactory increase in the same month.
“The export sector of Sri Lanka after showing strong growth in 2010 and 2011 experienced a setback in 2012 which continues to prevail even in this year. The setback is mainly due to the aggravated economic conditions in our key markets. The turmoil in these markets has lead to a drop in demand not only for our exports but also for exports of other developing and emerging economies. Also there are supply side constraints in the domestic front,” said the EDB chief.
The anticipated economic recovery in EU and USA which absorb nearly 50% of our products had not taken place. According to international agencies such as the IMF it would take some time for growth to pick up in those regions. The unsettled conditions in the Middle East have further aggravated the situation, he added.
“The problems in our key markets suggest that we should focus on diversifying our markets to other regions. The Asian region comprising China and India have registered substantial economic growth. Accordingly, we are concentrating on diversifying our markets to these regions and other member countries in the BRICS group where the potential is high. This will be done while sustaining our market share in our key existing markets.
“We have already carried out promotional programmes in India and China and some more programmes are planned in the future to be carried out in these regions. We have also carried out market studies on Brazil and South Africa to ascertain the opportunities and barriers. The objective is to formulate suitable strategies to penetrate into these markets.
Expressing confidence that the Exporters’ Association could make a very positive contribution to these efforts using their close relationship with relevant stakeholders nationally and internationally, he said that utilizing those strong links the Exporters’ Association could facilitate to create healthy business relationships to enhance Sri Lanka’s exports.
The Exporters’ Association which represents about 80% of exporters in the country is the foremost body for exporters in Sri Lanka. The EDB highly appreciated the contribution of the Association towards the export development effort of the country. The export sector which contributes 17% to the GDP of the country, clearly played an important role in achieving that objective, said the EDB Chairman.
The EDB is the premier state organization entrusted with the task of developing and promoting exports from Sri Lanka. The EDB is geared towards promoting products and services of the country with the objective of making Sri Lanka the most sought after destination for global sourcing in identified product sectors.
Egodage also pointed out that the EDB strongly believed that the private/public partnership was very essential for the growth and the development of the sector. Private public partnership was not only essential for formulating successful export development strategies but also in implementing the same, he noted.
“Our approach is based on the principle that the public sector plays the facilitator role in developing the export sector while the exporters drive the sector,” said Egodage.
The public private partnership is also enshrined in the EDB Act. The enactment has provisions for establishment of Advisory Committees that are oriented towards the development and promotion of specific products as well as functional aspects of export trade.
In July this year the EDB had established 26 new Advisory Committees comprising 400 members. These members represent both the private and public sector. This will enable EDB to work together to identify the problems confronted by the export sector and find suitable solutions to such problems. The EDB has already scheduled the inaugural meetings of these committees and it expects the full participation of all members.
“Sri Lanka has today become an ideal location for international buyers, to source a wide range of highly quality products and services. But our competitive advantage has been deteriorating over the years due to a number of factors,” observed the EDB Chairman adding that the government had maintained inflation rate at a single digit level which was a positive factor.
“The energy cost is a major component in the cost structure. The government has offered tax concessions for industries adopting alternative energy sources. It is very important that we improve our productivity to regain and sustain our competitive advantage. The government has also offered tax incentives for upgrading technology and acquisition of new technology.
Improvement in technology is very essential to produce innovative products and reduce cost of production. This would lead to improved productivity and competitiveness,” said Egodage.
The EDB is also focusing on branding as a strategy to increase popularity of our products and enhance export earnings.
The strategic plan prepared by the EDB in consultation with the Advisory Committees have been updated to cover the period 2012 – 2016. It contains several programmes aimed at developing and adopting products and services to meet international market requirements, assisting exporters to identify new markets, facilitate supply chain efficiencies and promoting export oriented SMEs, etc.
Pointing out that the EDB intended to implement those programmes for the benefit of the export sector, Egodage said that, “I would request you to have a close rapport with the EDB to discuss any issues or constraints which require our attention.”
The Chairman and Chief Executive of Hayleys Group, Mohan Pandithage was the Chief Guest and the keynote speaker at the AGM. Rohan P, Daluwatte, Senior Manager - Operations & Logistics, Tea Tang Ltd assumed responsibility as Chairman for EASL whilst Sarada De Silva, Chairman and Managing Director of Intercom Limited was elected as 1st Vice Chairman and Fazal Mushin, Director – Export & Business Development, Link Natural Products (Pvt) Ltd was elected the 2nd Vice Chairman respectively. Mrs. Dawn Austin, Managing Director of Nidro Supply (Pvt) Ltd, stepped down as the chairperson of the EASL after serving in the committee in the said capacity for two years.