Norwegian GSP+ opens $ 100 b market for Sri Lanka

Daily Finance Times - 20/03/2014

• Norwegian Customs offers hands-on support in Colombo for first time
• Post-war Lanka demonstrated strong growth: Norwegian Ambassador
• Norwegian openings for Lankan textiles, tea and rice: Norwegian Customs
• 'Norway a gateway to Scandinavian market: EDB’s Egodage

As bilateral trade soared by a strong 26%, Norway, the gateway market to Scandinavia and the third highest per capita market in the world, called Sri Lanka on 18 March to step forward and grab promising opportunities available with it.

“There are many niche markets for your products and new opportunities are available in Norway. The new Norwegian GSP Plus involves lower middle income countries with populations of less than 75 million. Sri Lanka therefore qualifies as a GSP Plus country. As result, Sri Lanka now receives better market access to Norway,” announced Ambassador of Norway in Colombo Grete Lochem on Tuesday.
Lochem was addressing the EDB-facilitated seminar on the Norway GSP+ scheme at the EDB auditorium, Colombo.

Present at the session were Minister of Industry and Commerce Rishad Bathiudeen, EDB Chairman/CEO Bandula Egodage and top EDB officials. Also taking part were Directorate of Norwegian Customs and Excise Department of Customs Senior Adviser Susann Nilsenn and Directorate of Norwegian Customs and Excise Department of Customs Assistant Director Cecilie G. Alnaes.

This is the first time that top officials from the Directorate of Norwegian Customs and Excise Department of Customs were in Colombo at hand to clarify issues for Lankan exporters.

The Norwegian import market potential is estimated to be $ 100 b. It is considered to be a high purchasing power market due to it being the third highest GDP per capita nation in the world; GDP/capita PPP of nearly US$ 55,000.

Norway has concluded 25 preferential free trade agreements through EFTA, while negotiations are underway with a number of free trade partners. The new Norwegian GSP+ is not a part of the EU’s GSP assistance scheme.

“Our total bilateral trade with Norway has increased by 26% to $ 31.83 million since 2008. The balance of trade is in our favour. Apparel is the main export item to Norway from Sri Lanka, taking 38% of the total exports in 2012,” said Bathiudeen, noting that Sri Lanka is targeting an export goal of US$ 20 billion by 2020 as per the vision of President Mahinda Rajapaksa.

Market access for countries like Sri Lanka, through supportive schemes including the new Norway GSP Plus schemes, has been playing an important role in Sri Lanka’s export competitiveness, he asserted, adding that in this context it will be more important to explore the possibilities of widening Sri Lanka’s access to markets through such promising schemes.

“Sri Lanka has been benefiting from the Norwegian GSP general facility from 1972 and has now met the criteria to enjoy the Norwegian GSP Plus status from this year. The door is now open for our exporters to this highly promising $ 100 b market. From the SAARC region Sri Lanka enjoys Norwegian GSP Plus benefits on the basis of lower middle income categorisation. Sri Lanka appreciates the Government of Norway’s generous support in providing the GSP Plus facility. I am hopeful that the Government of Norway will maintain the same position in future in line with the principles of WTO. I am therefore very optimistic that today’s initiative will benefit our export community, especially manufactured products such as apparel, as well as agricultural products, including tea,” Bathiudeen outlined.

Pointing out that Sri Lanka has demonstrated strong economic growth since the war ended, Lochem addressing the session stated: “Progress has been made in service and manufacturing sectors. There is development in infrastructure – ports and roads. But Sri Lanka is experiencing a trade deficit, importing much more than exporting. In invoking Norway-Sri Lanka commercial cooperation, it’s the hard work of everybody that is involved. There are trade opportunities to expand trade and investment. Today Norwegian Customs officials are especially present here to answer all your questions on the Norway market. Let’s hope there will be more exports from Sri Lanka to Norway.”

Meanwhile, EDB Chairman/CEO Bandula Egodage stated that Norway offers a potential market for Sri Lanka with an import market of nearly US$ 100 billion and a per capita GDP that is the highest in Europe, recording over US$ 55,000.

“We all know that Norway is rich in terms of petroleum, hydropower, fish, forests and minerals. Besides, Norway could be an entry point for us for looking at the larger Scandinavian market, which includes Sweden, Denmark and Finland, with a combined population of over 25 million and a GDP of over US$ 1,100 billion,” Egodage added.

Directorate of Norwegian Customs and Excise Department of Customs Senior Adviser Susann Nilsenn, addressing the Lankan exporters, said: “As a GSP+ country, Sri Lanka will receive a better offer than ordinary GSP countries. You will get duty free access for goods under Chapters 61-63, as well as 50% or 100% duty free access for certain agricultural goods. There are no demands in the Norwegian GSP system relating to implementation of core international conventions on human and labour rights, sustainable development and good governance. The Norwegian GSP system is amended every three years. We don’t have any textile production in Norway, no tea production and no rice production, therefore exporters of such items have a ready opening. Sri Lanka is in Group 3 in regional cumulation; Group 3 countries are Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.”

Kithulaka Varuna Exhibition and Trade Fair at Sudarshi Sinhala Cultural Centre

Daily Finance Times - 21/03/2014

The Ministry of Traditional Industries and Small Enterprise Development has organised the Kithulaka Varuna Exhibition and Trade Fair from 4 to 6 April 2014 at the premises of the Sudarshi Sinhala Cultural Centre opposite the BMICH.

This is an annual exhibition and trade fair held every year before the Sinhala and Tamil New Year to popularise and promote Kithul products. This exhibition will be opened to the public from 9 a.m. to 9 p.m. on all three days. Admission is free and it is open for public.

Minister of Economic Development Basil Rajapaksa will be the Chief Guest for this program, along with Minister of Traditional Industries and Small Enterprise Development Douglas Devananda providing the leadership and strategic guidance to take the kithul sector forward with the support of the Deputy Minister Weerakumara Dissanayake.

Secretary, Ministry of Traditional Industries and Small Enterprise Development V. Sivagnanasothy said that this three day exhibition and trade fair has been organised by the ministry with its implementing agency the Industrial Development Board (IDB) and with the participation of other stakeholders such as the Industrial Technology Institute (ITI), National Engineering Research and Development Centre (NERD), Sri Lanka Standard Institute (SLSI), Department of Export Agriculture, Department of Forests and Export Development Board (EDB).

Fifty (50) trade stalls have been established to exhibit and showcase the quality kithul products and provide market opportunities to the kithul producers to sell their products directly to the consumers. The producers will exhibit kithul treacle and jaggery, kithul flour (Piti), kithul based food and beverages such as pudding, halapa, thalapa, kithul pitti kandha, handicrafts, timber and furniture etc. Among the exhibitors, an assessment will be made to select the high quality Kithul products and producers to recognise, motivate and encourage and work towards high quality products. The best performers will be given awards and certificates.

Further, in all three days a demonstration training session will be organised for housewives, women, home based entrepreneurs and for those who are interested on preparing Kithul based food and beverages. This demonstration session will be conducted by the Sri Lanka Institute of Tourism and Hotel Management. This exhibition and trade fair will offer great opportunities for consumers to purchase high quality kithul treacle and jaggery to meet the Sinhala – Tamil New Year requirements. Moreover, producers have opportunities to interact with the exporters and establish sustainable long term buy back arrangements.

Declaration of Kithul Promotion and Consumption Week

The Ministry has initiated action to declare the first week of April 2014 (from 1 to 6 April) as Kithul Promotion and Consumption Week to coincide with the Kithulaka Varuna Exhibition and Trade Fair. It is scheduled to hold awareness programs at the district level, distribute nursery plants to kithul producers, create awareness among school children and university students on the nutritional, medicinal and health values, promote the products among tourists and general public and other related programs will be conducted to popularise and promote the kithul sector.

Kithul industry underutilised 

The kithul traditional industry which is over thousand years old and the indigenous traditional techniques and skills have been transferred from generation to generation need to be further supported, strengthened and upgraded and harnessed to realize the foreign exchange earning potential of the kithul sector.

Under the Mahinda Chintana – Vision for the Future – the national development strategy, the kithul sector has been identified as a rural economic development strategy for the development of livelihood, self employment, income generation and poverty reduction in the rural sector and facilitates the flow of foreign exchange directly to the villages.

The surveys undertaken by the ministry in partnership with the Department of Census and Statistics revealed that there are 3 million kithul trees in 18 districts which includes Ratnapura, Kandy, Badulla, Moneragala, Matara, Kegalle, Nuwara Eliya, Kalutara, Galle, Kurunegala, Matale, Hambantota, Colombo, Gampaha, Ampara, Anuradhapura, Polonnaruwa and Puttalam. Currently, there are over 35,000 tappers in all 18 districts. Of the 3 million trees, there are around 600,000 matured trees of which about 120,000 trees are currently being tapped. This is about 20%.  Therefore, there is a need to improve the tapping of the balance trees.

Nutritional products with export potential

On the other hand, kithul treacle and jaggery have been identified as nutritional and healthy products and believed to have a low Glycaemic Index value among sweeteners and as such it is claimed that it will not have an effect on the blood sugar level. Hence, pure kithul is widely believed as an ideal sweetener for diabetes patients.

The rapidly increasing export earnings very clearly demonstrate the very high export potential for kithul products. It is reported that the kithul treacle and jaggery export earnings was Rs. 26 million in 2011, Rs. 58 million in 2012 and Rs. 68 million in 2013. There is an increasing demand for Sri Lankan kithul in international markets such as Japan, Malaysia, and USA. Historical evidence has also revealed that Sri Lankan kithul products were also exported to Great Britain, Belgium, Germany, France, the Netherlands and several European countries.

License not required for tapping

The Excise Ordinance has been amended to enable the tapping of kithul trees without having to obtain special permits. Moreover, the removal of this impediment has been widely disseminated and awareness has been created among all Divisional Secretaries, Police officers and Excise Department officials.

Under the Mahinda Chintana – Vision for the Future the Ministry of Traditional Industries and Small Enterprise Development is implementing the National Kithul Development Program to strengthen this sector as a commercially profitable sector. The average monthly income obtained from a single kithul flower is in the range of Rs. 15,000 to Rs. 25,000. Moreover, it can significantly contribute to reduce the import of sugar and serve as a healthy sweetener in the international market.

National Kithul Development Program: Rural Economic Development Strategy

Secretary, Ministry of Traditional Industries and Small Enterprise Development V. Sivagnanasothy stated that the President’s budget proposal 2013 emphasised kithul development in Sabaragamuwa Province. The National Kithul Development Program has taken the following strategic interventions and initiatives to promote this sector.

Tappers Training Program and Master Training Programs to increase the number of tappers and impart tapping skills to young generation.

Provision of safety kits for kithul tappers (safety jacket, helmet, belt, knife etc.) and introduction of insurance schemes to mitigate the risk of climbing related accidents and life threats of kithul tappers.
Introduction of traditional and kasper technology to increase the sap yield and bring unproductive trees into the tapping process and increase the sap yield.

Quality improvement for kithul treacle and jaggery (GMP, SLS certification, cost effective stoves, brix meters, PH meters and devices to assess the level adulteration) to enable it to compete with other sweeteners such as maple syrup of Canada.

Registration and issue of identity cards to recognise kithul producers and overcome legal impediments.
Facilitation to link the kithul producers with large scale exporters including buy-back arrangements, placing the kithul products in city cops, super markets and franchising in the private sector and establish model sales outlets with high quality kithul products.

Nursery development and kithul plantation to increase the number of kithul trees in the country and convert it as a commercial operation.

Developing of user-friendly tapping system to reduce the risk of climbing – suitable elevators for climbing kithul trees.

Promote, demonstrate and encourage kithul based value added food and beverage products

Research and development
Introduce kithul as a nutritional and healthy sweetener by analysing its medicinal and nutritional contents.
Nutritional labelling of kithul products.
Preserving sap from fermentation to enable it to produce more treacle and jaggery instead of toddy.
Prevention of melting of jaggery and appropriate packing.
The Ministry is giving very high importance to the kithul sector to develop it as a dynamic export oriented sector that will benefit the rural economy.

EDB organises Lanka pavilion for Kunming Fair

Daily News - 19/03/2014

The Sri Lanka Export Development Board (EDB) in collaboration with the Sri Lanka Embassy in China will organize a Sri Lanka pavilion at the second China South Asia Exposition to be held at the Kunming International Convention and Exhibition Centre, from June 6 to 10, 2014

This exposition is sponsored by the Ministry of Commerce of China and the Government of Yunnan province to promote import products from the South Asian region .

Applications are expected from manufacturers and exporters from the categories such as food and beverages (tea, spices and kitchen essentials, processed food products, fish and related fishery products and fresh fruits and vegetables), agri products (cut flowers and foliage, coir and coir products), gems and jewellery, garments and textiles, ceramics and porcelain products, handicrafts (high quality handicrafts, batiks, artificial fashion jewellery), healthcare products (herbal products, personal care products) finally industrial products such as rubber and based products, paints and varnishes, automobile spare parts, bicycle products, electrical products and activated carbon.

The organizers in China will provide an effective publicity agenda to attract the local business representatives to the fair, thus providing the participants with a good opportunity to establish a good recognition in the import market. The organizers will also arrange one to one business interactions and corporate match making meetings for the attendants, in order to conduct clear presentations for the business visitors.

The shortlisted applicants will first be interviewed by the selection committee and selected companies will be provided stall space of 9sqmt with brick fixtures and fittings.

Applications can be obtained at the Market Development Division EDB or from the EDB website www.srilanka business.com, should be submitted to the Director/Market Development to reach before March 25,2014. 

Steps taken to expand Gem and Jewelry exports

news.lk - 18/03/2014

Sri Lanka’s Gem and Jewelry Industry is emerging as one of the biggest foreign exchange earning industry for the country. The Gem and Jewellery Authority has implemented many measures to uplift the industry.

These includes holding periodical exhibitions locally and in foreign countries and providing facilities for gem miners and establishing partnerships with other gem exporting countries in the world.

As a result of these activities Myanmar has invited Sri Lanka to establish cooperation in the industry.  Deputy Minister of Industry and Commerce Lakshman Wasantha Perera said that with this new initiative from Myanmar we could establish new industries both local and foreign to enable us to generate huge employment opportunities locally and overseas, in addition to development of Sri Lankan exports.

He said that there are possibilities of importing rough stones and re-exporting them with high value added finished products.

In 2012 Sri Lanka exported Rs.111 million worth of gems and, diamond re-exports amounted to over Rs. 410 million.  Plans have been made to increase the revenue from Gem exports to Rs. One Billion by the year 2015.

Initiative to jumpstart Palestine - SL trade

The Island - 18/03/2014

Minister of Industry and Commerce of Sri Lanka-far right Rishad Bathiudeen prepares for the interview with Mai Bakry (presenter, "Palestine TV") on 07 March in Colombo. Third from right (standing) is Anwer al-Agha, Palestine Ambassador to Colombo.

Bilateral trade needs to be revived first, before moving for such trade mechanisms as FTAs when it comes to trade with the virgin market of Palestinian Territories. "FTA with the Palestinian Territories is a good idea but with non-existent trade at present, it is too early for it" said Minister of Industry and Commerce Rishad Bathiudeen.

Minister Bathiudeen was speaking to Ms Mai Bakry, presenter of "Palestine TV" on March 07 in Colombo when he was interviewed for the channel.

"Sri Lanka has entered into a new economic development phase thanks to President Mahinda Rajapoaksa. We are now a lower middle income country focusing to develop as a commercial hub in this region. Sri Lanka and the State of Palestine are maintaining very cordial relations over the years. The recent visit of President Mahinda Rajapaksa to Palestine has further enhanced and strengthened relations between the two countries" Minister Bathiudeen said, introducing Sri Lankan economy to Palestinian viewers. "However, bilateral trade, between the two countries is low and almost negligible. This shows that there is very strong unrealised trade potential at both ends" Minister Bathiudeen added.

Sri Lanka’s total trade with Palestine Territories stood at $ 0.02 Mn in 2010. Thereafter the values fell to almost negligible amounts.

When asked by Bakry on current bilateral trade reality, Minister Bathiudeen responded: "The export values are very low at only $ 0.02 Mn! No imports from Palestine. Our exports to Palestine are only some yarn and vegetable oil."

When asked by Bakry on the potentials for FTAs with Palestine Territories, Minister Bathiudeen responded: "FTA? There is a need to work to enhance bilateral trade and business. FTA with the Palestinian Territories is a good idea no doubt but with non-existent trade at present between our countries, it is too early for it."

On practical steps to revive trade, Minister Bathiudeen said: "In view of the low trade, during my meeting with Dr. Ms. Khuloud Daibes, Palestinian Minister of Tourism, in April 2012 in Colombo, I expressed our country’s interest to create a "Sri Lanka - Palestine Joint Investment Forum" to increase bilateral trade. I believe that we can work to establish such a mechanism which is a promising starting point for both partners."

Explaining the investment opportunities in Sri Lanka for Palestinian investors, Minister Bathiudeen said: "There are many opportunities in Sri Lanka for Palestinian business community, in diverse sectors for trade and investment. Opportunities are also, available under the Indo-Sri Lanka Free Trade Agreement and Pakistan-Sri Lanka Free Trade Agreement. Also, I stress tourism. Middle Eastern tourists including from Palestine, are now more and more aware about Sri Lanka than before. We invite the Palestinian business delegation, to visit Sri Lanka to explore the opportunities available for them. My ministry will provide all the support and assistance to investors from Palestine. 100% ownership for, Palestinian investments also ensured. Palestinian investments in Sri Lanka are guaranteed by the constitution as well."

Exclusive Myanmar gem zone for Sri Lanka

Daily Finance Times - 17/03/2014

Sri Lanka’s gem mining industry is set to turn a new chapter as Myanmar has invited the country for unprecedented cooperation efforts across many sectors. “I am pleased to say that the follow-up delegation as a result of President Mahinda Rajapaksa’s visit to BIMSTEC in Myanmar has reaped great success. I am quite confident that, with this initiative, we could establish new industries both local and foreign, to enable us to generate huge employment opportunities locally and overseas, in addition to development of exports of Sri Lanka,” revealed Deputy Minister of Industry and Commerce Lakshman Wasantha Perera.

Deputy Minister Perera was speaking in the aftermath of his ministerial meetings with members of the Myanmar Cabinet in Myanmar.  Deputy Minister of Industry and Commerce Lakshman Wasantha Perera led the 15 member strong Sri Lankan delegation to the Myanmar Construction Summit held in the country’s capital city Naypyidaw.

Deputy Minister Perera’s delegation was organised by the Export Development Board, and consisted of EDB Chairman and CEO Bandula Egodage and representatives from 12 leading Sri Lankan construction firms as well as EDB officials, accompanied by Sri Lanka’s Ambassador to Myanmar H.R. Piyasiri.

Deputy Minister Perera’s delegation is a follow up to the recent visit of President Mahinda Rajapaksa to the BIMSTEC summit in Myanmar. During his visit, Deputy Minister Perera called on Union Minister of Mines Dr. Myint Aung, Union Minister of Construction U. Kyaw Lwin and Union Minister of Commerce U.Win Myint.

During Deputy Minister Perera’s meeting with Minister Dr. Myint Aung, held on 10 March, the usage of high technology for gem mining was the key highlight, but also focused on the possibilities of having a dedicated Sri Lankan gem mining zone in Myanmar with the added potential of ample employment opportunities for Lankans. This development is in spite of foreign gem mining being still not allowed in Myanmar.

In order to improve the efficiency and value addition to the total industry, usage possibilities of latest gems identification technology (CNC) by both countries was also discussed. Possibilities of importing rough stones and re-exporting with high value added (cutting/polishing) finished products was yet another topic that received the attention of both parties.

Sri Lanka’s offer of green housing technology was the key topic at Deputy Minister Perera’s meeting with U. Kyaw Lwin (Union Minister of Construction of Myanmar) on 10 March. Sri Lanka has offered low cost, environment friendly, green housing construction technology to Myanmar. Realising that construction plays a vital role in the development, both parties agreed for a follow up session in the due course.

During Deputy Minister Perera’s meeting with U. Win Myint (Union Minister of Commerce of Myanmar), technology upgrading in the processing of gram, pepper and agricultural products took place. Production of biogas from food waste and paddy husk was also tabled during the session.

The Government of Myanmar principally agreed to obtain proposed Sri Lankan high technology for Myanmar industries –including gem mining, low cost construction of housing and buildings, and agricultural process engineering.

Export Development Board, along with the Ministry of Industry and Commerce, will submit project proposals to the Government of Myanmar, in consultation with Ministries/Agencies of Environment, Gem and Jewellery authority, Housing and Construction, and Department of Agriculture, in the near future.

China starts first Sri Lanka value chain study

Daily Nation - 12/03/2014

Sujatha Weerakoon, Director General, EDB-far right, addresses Peng Jinhuo, Division Head of Inspection and Quarantine Authority (seated front row, far right in brown outfit)

Strengthening bilateral trade cooperation further, China’s powerful official organ in charge of import commodity inspections, has despatched its first expert study team to Sri Lanka, signalling that China is opening for Sri Lanka’s agro-exports.

The official quarantine study team from the powerful official organ in charge of import commodity inspections, Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China (ADSIQ-China) has arrived in Sri Lanka on 05 February and begun work on 06 February, by liaising with the EDB. The three member team is scheduled to return to China on 12 March.

During his official visit to Kunming, China in June 2012, Minister Trade and Industry Minister Rishad Bathiudeen made an official request to Gu Zhaoxi, Deputy Governor of People’s Government of Yunnan Province on China’s quarantining of Sri Lankan perishables. The EDB under Minister Bathiudeen was informed by Lankan exporters of the difficulties when exporting fresh agricultural products to China which Minister Bathiudeen was representing to Chinese officials.

Thereafter, Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China (ADSIQ-China) through the Sri Lankan Embassy in China, sent a questionnaire on the Pest Risk Analysis (PRA) requesting information to proceed with the quarantine protocol of China enabling them to consider granting approval and in July 2012 requested to prioritise the products and to request approval accordingly.

Thereafter, based on Chinese export market potentials, Mango, Banana and Pineapple were selected at the initial stage while on EDBs request, the National Plant Quarantine Service of Department of Agriculture had submitted a PRA to obtain Chinese market access for these three fruits. The EDB subsequently forwarded the same to the ADSIQ through the Sri Lankan Embassy in China.

“When it comes to China-Sri Lanka bilateral trade, we in China lack knowledge on the production processes of Sri Lankan agro sector” said Peng Jinhuo, Division Head of Inspection and Quarantine Authority (Liaoning based), who leads the team to Sri Lanka. “Our main objective during this tour is the capacity evaluation of Sri Lanka’s banana value chain. In that, we are looking for first-hand learning of value chains. We also want to learn of Sri Lankan rules on agro exports” added Jinhuo.

“We welcome you to study our agro products” said Sujatha Weerakoon (Director General, EDB) addressing Division Head Jinhuo, and said: “Our agro exports have strong standing in international markets. It is time that China experience them too.”

A presentation by Dr DPP Jayakodi (Additional Director, National Plant Quarantine Service) on quarantine procedures used in Sri Lanka exports, was also made to the visiting Chinese delegation at the EDB.

According to the Department of Commerce, Sri Lanka’s bilateral trade with China stood at $ 2.67 Bn, with the balance of trade in favour of China. Apparel, mineral sands, mattress fiber, coir fiber, rubber and tea (bulk) and tyres and tubes are the top Sri Lankan exports to China.  In 2012, China bought $ 0.02 Mn of fruits from Sri Lanka (including bananas). Biggest importer of Sri Lankan fruits in 2012 was Saudi Arabia ($ 4.28 Mn of fruits), followed by India, UAE, Maldives, Qatar and 33 other countries. According to the EDB, Sri Lanka’s total fruit exports in 2012 stood at $ 18.69 Mn.