EDB Chairman Suresh De Mel noted that Sri Lanka’s future success in exports would be driven on the back of a niche-product strategy. He noted multiple successes of export revenue generation companies and how they have successfully exploited niche markets.
Given demographic and resource factors he noted that Sri Lanka would never be able to achieve very large economies of scale in industrial manufacture for exports. De Mel criticised the ease with which certain people compare Sri Lanka and Bangladesh. Suresh noted that Bangladesh is much larger and has the workforce to support over 6000 garment factories whereas Sri Lanka has about 200 garment factories.
De Mel was speaking recently at the Centre for Banking Studies lecture on improving export performance.
De Mel noted that organic products from Sri Lanka with the right certification were doing very well in export markets. De Mel in his personal capacity has invested in a company called EcoWave Guarantee Ltd which seeks to export certified organic spices and herbs. He has noted great success in the social venture.
De Mel said, “We are selling a story and the buyer is currently in Germany and Switzerland. They are at the top of wealth distribution. We are working very hard to get our product up to the standard. Getting the best quality out of home gardens is a challenge.” De Mel’s venture is looking to centralize processing and improve the standardization of spice exports from Sri Lanka. The venture has cooperative elements in its organizational structure of recent export products, the spice sector has shown considerable resilience and high demand. The low value of the product results in customers being less price-sensitive to high markups. The EDB is working hard on building up brand recognition for Ceylon Spices.
De Mel noted that the government’s recent venture to reduce chemical inputs into farming would have a huge boost to the image of Sri Lanka agricultural exports and more should be done to obtain a certification with regards to organic production.
The EDB is looking to boost boat manufacturing in Sri Lanka which is expected to see a boom with the development of a marina. De Mel said, “I don’t know of any other island destination in the world without a boating marina.” De Mel was excited by the opportunity of nautical tourism and has set up ventures in fishing to take advantage of Sri Lanka’s sea assets. Questions were raised on access to foreign financing and the disclosures required for export companies in obtaining foreign loans. Questions were also raised on whether borrowed funds can be maintained abroad for use in transacting.