Wednesday, November 26, 2014

How to develop Sri Lanka’s wood-based industry

Daily Mirror - 24/11/2014


A conference and workshop under the theme “Wood Based Industry – Way Forward’ organized by the Wood Based Industrialist Association of Sri Lanka (WBIA), will be held at the Export Development Board (EDB) Auditoriumon on November 28.

Channa Wijesekera, President of the Wood Based Industrialist Association of Sri Lanka, is expected to outline the problems facing the wood based industry in this article. He explains why this important industry has not developed over the years and proposes a series of solutions to remedy the situation.
When analyzing the development of t he various industries in Sri Lanka, the timber and ti mber related industry indicates a comparative downward trend or slow progress in comparison with the other industries.

The Table shows information provided by the Export Development Board indicates the total export value of wood and wood based products in US Dollars.

In a cautious investigation, the following main causes can be identified.

INADEQUATE KNOWLEDGE AND AWARENES ABOUT DRYING AND PRESERVING TIMBER
Many medium and small scale wood industrialists use un-dried and untreated timber to manufacture their products due to lack of knowledge about the subject. This process directly effects negative impact on the quality of the products, in particular, furniture with wide surfaces such as Almairahs, Tables and Wardrobes etc.

These products tend to warp, expand discolor or disfigure and mostly become unusable. Therefore, a national programme on publications on methods of treatment of timber and kiln drying etc. and educating the trainers of Government and private vocational training schools is required urgently. Another virtually important action is to introduce Carpentry into new GCE Advanced Level Examination under Technical Education segment and train teachers on the subject.

UNAVAILABILITY OF EASY AND SUFFICIENT QUANTITIES OF DRIED AND TREATED TIMBER IN THE MARKET
This is a disappointment to the Wood i ndustrialists who have identified the significance of this process. When an order for furniture is obtained, the industrialist has t o purchase logs, obtain transport permits, transport the logs to Saw Millers, re-transport the sawn timber planks for treatment/drying and transport the dried/preserved timber planks back to his work shop after obtaining another permit. This process takes a month or more which results delays of delivery of the order to the customer.
Following are the suggestions which are to be implemented immediately to overcome above.
Step 1  - Provide Government assistance to Industrialists with chemical treatment plants and kilns and formulate a programme to encourage them.
Step 2  - Introduce Laws to transport all treated and dried timber released by these entities island wide on the Invoice issued by them. When implemented, the above will immensely benefit small and medium scale wood industrialists and self-employed carpenters.
On the other hand, this will enormously help a person to acquire long lasting wood products such as doors, windows, frames from properly dried and adequately treated timber. In addition, such person will save unwanted time spent for observing sawing, preservation, drying and obtaining permits and transporting etc.

INSUFFICIENT USAGE OF MODERN MACHINERY AND LACK OF KNOWLEDGE ABOUT TECHNICAL OPERATION OF MACHINES
In rural areas, manual tools are being used as yet for complex carpentry related work. This reduces the speed, capacity and quality of production making them uncompetitive in the market.

The Government and private vocational training Institutes should be encouraged to introduce training modules such as wood machine operations, finishing processors of furniture, etc. These training programmes and the training institutes should be registered under TVEC. Trainees who successfully complete this training programme to be registered and directed to Sri Lankan Industry and foreign job agencies. When Sri Lankan Industry and foreign job agencies want to test skills and knowledge of applicants, it can be done by these registered private and government training institutes. In my personal opinion, attitudes of the wood technicians who returned after foreign exposure are more positive and their improved technical knowhow can be used to the betterment of the industry.

ABSENCE OF CAREER GUIDANCE PROGRAMMES ON TIMBER RELATED INDUSTRIES FOR SCHOOL LEAVERS
As a preliminary step, Education Ministry, Higher Education Ministry, Ministry of Vocational Skills Training and Ministry of Industries can jointly organize special Seminars/ workshops for school leavers on wood technology and publish career guidance books for the students with the assistance of the wood industrialists. It is important to highlight the success stories of entrepreneurs who have climbed up the ladder. It is virtually important to expose the students to the operations of medium and large scale industries as most of the students have seen only small carpentry shops. This act would inspire them tremendously to join wood related trades. In addition, the foreign employment agencies can test their prospective candidates’ skills through these government and private institutions.

LIMITATIONS OF THE DESIGNING METHODS OF FURNITURE AND OTHER WOODEN PRODUCTS
Government and private training institutions should be encouraged to introduce professional courses on furniture designing. It is important to try to obtain aid from Japan, America, and Germany etc. for these programmes.

SCARCITY OF BOOKS WRITTEN IN SINHALA AND TAMIL LANGUAGES ON CARPENTRY.
Books published on wood technology in indigenous languages are almost nonexistent in Sri Lanka. This is a big hindrance to the development and progress of the industry. Therefore the books should be published on following topics which should include workshop drawings, supportive sketches, photos, etc. The subject matter of the books to be published are “Wood Technology”, “Drawings for Wood Work”, “Wood Work Practicals”, “Operation of Wood Processing Machines”, “Mathematics for Wood Training”, etc.

UNAVAILABILITY OF PROFESSIONAL QUALIFICATIONS IN THE INDUSTRY, REVISION OF CURRICULUMS AND PUBLICATION OF TEACHER STUDENT GUIDES
Currently, TVEC has introduced classifications and training standards under NVQ qualification system. It is extremely important to re-discuss the modules with Wood industrialists for re-design them and publish teacher training instruction books. In the absence of proper guidelines, results of practical tests differ according to knowledge, skills and attitudes of the examiner. As a result, the skill level of the same NVQ certificate will vary and standard of the certification may lose its credibility. This should be considered as a major issue and these testing methods to be revised in collaboration with industrialists.

EXCESS IMPORTS OF WOODEN AND WOOD BASED FURNITURE
Government has taken a reasonable step by announcing that heavy taxes will be levied from furniture imports in 2014 budget. Further, Government has instructed Developers working in BOI projects to purchase local furniture and related products from local manufacturers. We consider this as a step forward and we would like to pay our gratitude to the government for making this proposal.

PROVIDING MORE TAX CONCESSIONS FOR RAW MATERIAL, PAINTS AND FITTINGS USED IN THE WOOD SECTOR
It is virtually essential to offer further tax concessions for raw material and fittings and paints. As examples, items such as sand papers used for finishing work, thinner & various types of paints and accessories such as hinges should be considered for tax concessions.

Russia shows green light on fish import from SL

Daily Mirror - 26/11/2014


Russia has granted approval to import fish and fish products to the Russian Federation from Sri Lanka, 2014, the External Affairs Ministry said.

The Ministry said the Federal Service of Veterinary Surveillance under the Ministry of Agriculture of the Russian Federation granted approval to import fish and fish products to the Russian Federation as a result of the untiring efforts of the Sri Lankan Government through its Embassy in Russia.


Initially, 14 Sri Lankan fish exporting companies who had sought to export their products to the Russian Federation have been included in the register of enterprises and individuals allowed to export into the territory of the Russian Federation and would benefit from this approval, it said.

According to the Ministry, these companies would also have the added advantage of exporting their products to the Republic of Belarus and the Republic of Kazakhstan since these countries have established a Customs Union with the Russian Federation, whereby a product imported to one country can also be imported to the 2 other countries without payment of Customs duties.

The 14 Sri Lankan companies which would be able to supply fish and fish products in the categories of Fresh or Chilled Fish, Frozen Fish, Fish Fillets and Other Fish Meat, and Dried or Salted Fish.

According to statistics of the Russian Federal Customs Service, in 2013 Russia imported 443,014 tons of fish and fish products of these categories to the value of US$ 1581 million while it imported 484,000 tons of fish and similar products falling under this category to the value of US$ 1422 million.

Taiwan textile fair opens in Colombo

Daily FT - 25/11/2014


The Taiwan textile industry is the acknowledged world leader in research, development and manufacturing of fabric and garment accessories. The highly successful Taiwan Textile Fairs brings together leading suppliers of textiles and related products from Taiwan, one of the world’s largest apparel textiles exporting countries to Sri Lanka, at the Taiwan Textiles Fairs in South Asia 2014.

The fairs will showcase innovative and high performance functional textiles for apparel, bags, shoes, rainwear, etc. to Sri Lankan manufacturers. The fair will be held on 24 and 25 November at the Grand Crystal Ballroom of the Taj Samudra Hotel.

The Taiwan Textile Fairs in South Asia 2014 is an excellent opportunity for Sri Lankan apparel manufacturers, exporters, brand-owners, buying houses, buying agents, big retailers, importers, etc. to interact with manufacturers from Taiwan to source superior fabrics and textile auxiliaries that will add more value to their product range. The fairs will also introduce Sri Lankan manufacturers to new product categories to cater to growing demand in the domestic and export market.

The Sri Lanka apparel industry is set for strong growth on the back of continued positive growth in the economy, with it recording 7.8% growth year-on-year in the second quarter. The apparel industry, which makes up 15.9% of the economy’s total revenue, is on track to achieve the export target of US $ 5 billion by 2016 buoyed by rising export demand. Bilateral trade between Taiwan and Sri Lanka has increased over the years and the organisers believe that Sri Lanka has a strong demographic dividend. With South Asia predicted to become the largest textile and apparel producer, Taiwan is looking for stronger bilateral trade and co-operation with Sri Lanka.

Taiwan Textile Fairs in South Asia are organised by the Bureau of Foreign Trade (BOFT) and Taiwan Textile Federation (TTF) in association with the Sri Lanka Export Development Board (EDB) and represented in South Asia by Worldex India Exhibition and Promotion Ltd.
The event is supported by leading textile associations of Sri Lanka such as the Joint Apparel Association Forum (JAAF), the Sri Lanka Apparel Exporters Association (SLAEA) and the Sri Lanka Apparel Sourcing Association (SLASA).

The fairs will showcase a wide range of high performance and innovative textile products from knitted fabrics, functional fabrics, woven fabrics, polyester fabrics, Raschel, Jacquardtronic and Textronic laces, textile uxiliaries, leather auxiliaries, nature industrial cleaner, heat transfer label, reflective transfer label, active-casual fabric, texture fabric, double knit fleece fabric, laminated fabrics for shoe, bags, tents, rainwear, etc.

Taiwan Textile Fairs in South Asia 2013 was very successful, seeing over 300 buyers in just two days with concrete business ventures and collaborations taking place between exhibitors and buyers. Sean Tsai from the Overseas Market Development Department, remarked: “This year we are bringing special 100% waterproof nylon targeting the rainwear market: rain coat, tent roof, etc. as Sri Lanka faces heavy rains during the monsoons and there is a good opportunity for Taiwanese manufacturers to showcase their products in this sector.”


EDB hits China gold with first mainland MoU

Daily FT - 25/11/2014


  • Deeper commitments with new FTA: Vice President Hua
  • Fresh ties: EDB’s Egodage
  • Exports to China grew in last 5 years: EDB’s Dr. Maraikkar
  • Bilateral trade at $ 3 b



Sri Lankan exports broke fresh ground on 20 November, as a pioneering MoU between the country’s apex exports facilitator EDB and China was entered into in Colombo. With the commencement of FTA talks, bilateral relations have also further deepened.

“During President Xi Jinping’s recent visit to Sri Lanka this September, he and President Mahinda Rajapaksa reached consensus to deepen the strategic partnership and joint construction of 21 Century Maritime Silk Road. Now the countries have officially started the bilateral FTA negotiations and we believe that the bilateral cooperation would be further deepened in future,” said Zhang Hua, Vice President of CCPIT Guangdong Sub Committee.

Hua was addressing the first MoU signing event between EDB and China Council for the Promotion of International Trade of Guangdong (CCPIT – Guangdon) held on 20 November at EDB, Colombo.
Reps from 19 leading Guangdong firms and Government enterprises, including  Guangdong Guangye Asset Management (mineral resources), Guangzou Dajunmei Electric (consumer electronics), Landrent Investment Ltd. (enterprise management), Qinyuang Takson (tea), Qinyuang Silver Field (tin and scrap metal processing), Qinyuang Shengli Copper Materials (copper processing), and First Rare Materials Co (producer of high purity metals including selenium, tellurium, cadmium), were present for B2Bs with more than 20 Lankan firms such as D. Samson Industries, Akbar Bros, Mt. Lavinia Hotel, Robert Agencies, Abans PLC, Oviklo International and Agility Logistics.

Guangdong (formerly Canton) is China’s largest provincial economy producing more than 10% of China’s GDP, with 104 m population and hosting some of the largest global multinationals such as Shell (the Petrochemical giant) and Du Pont (chemicals).

Guangdong also hosts China’s largest international annual expo, the Canton Fair.
Addressing the event, Hua said: “CCPIT Guangdong has maintained good cooperation, relations with Consulate General of Sri Lanka in Guangzhou, organised several business meetings to further promote bilateral communications. In fact, we have just organised a business meeting last month with the Consulate General of Sri Lanka in Guangzhou for the entrepreneurial delegation led by EDB. We hope that today’s MoU with EDB will further promote bilateral business communications between Guangdong and Sri Lanka.”
China is Sri Lanka’s second largest import country with a value of $ 3 billion, accounting for 17% of total imports in 2013. Total trade with China was $ 3,081 m in 2013.

EDB Chairman/CEO Bandula Egodage addressing the event said: “This is the reciprocal event for the visit of the entrepreneurial delegation led by EDB to Guangdong. We thank you for giving us the opportunity to access Guangdong. The EDB team has played a considerable work to coordinate this MoU. The MoU is a commitment that shows the interest of both parties to engage in bilateral trade.”

EDB ED Dr. Yousuf Maraikkar, addressing the event, said: “China was the 18th export destination for Sri Lanka with an export value of $ 121 m, contributing 1.2% of total export earnings in 2013. Sri Lanka’s exports to China have grown over the past five years increasing from $ 59 m in 2009 to $ 121 m in 2013. The EDB has organised participation of 27 Sri Lankan companies at the 11th China International Small and Medium Enterprises Fair held in Guangzhou, China in October this year. Today’s MOU aims to exchange market information and relevant publications, exchange of official visits between two countries and support to participate at trade exhibitions and other trade events with the overall objective of developing trade between two countries.”

EDB Director General Sujatha Weerakoon led the Sri Lanka trade delegation to the 11th China International Small and Medium Enterprises Fair held in Guangzhou and during a meeting with the CCPIT Guangdong Province she invited CCPIT to organise a delegation from Guangdong, China to Sri Lanka.

EDB secures links with world’s largest textile retailer ZARA

Daily News - 26/11/2014


For the first time in Sri Lanka’s apparel history, the Export Development Board has directly linked top Lankan apparel suppliers with the world’s largest textile retailer, Spain’s ZARA and is stepping up its support for apparel market diversification.

“Though the Lankan apparel sector caters to many international brands, we have still not been able to manufacture to Zara brand, the world largest fashion retailer.

This successful effort directly linked our apparels to Zara for the first time,” said Chitranjali Dissanayake (Director-Industrial Products of SLEDB).

Dissanayake was reporting on the success of first ever Lankan apparel industry delegation to Spain’s Inditex, recently. Inditex ranks as the world’s largest textile retailer by sales, and is present in 87 countries.
It owns such international retail brands as Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterqe.

“Inditex is commonly known by its oldest and biggest brand, Zara. Though Lankan apparel sector caters to many international brands such as Victoria’s Secret, Gap, Nike, Tommy Hilfiger, Marks & Spencer we have still not been able to manufacture to Zara brand, the world largest fashion retailer” said EDB Director Dissanayake, and added: “As a result of the Lankan industry leaders showing a keen interest to develop business contacts with Spain’s Inditex and to manufacture apparel in Sri Lanka for its ZARA Brand, the EDB promptly initiated a dialogue with Spain’s Inditex Inditex for an initial meeting with a Lankan delegation to present the country’s capabilities and invite Inditex SA to source from Sri Lanka.

EDB in global apparel breakthrough

Daily FT - 26/11/2014


  • Secures links with world’s largest textile retailer ZARA
  • 6-member EDB-led delegation to Spain 
  • Brandix, Timex, Fergasam in pioneering session 
  • September apparel exports up by 4.4%



For the first time in Sri Lanka’s apparel history, the EDB, Sri Lanka’s apex export facilitator, has directly linked top Lankan apparel suppliers with the world’s largest textile retailer, Spain’s ZARA on 29 October.
The facilitator, the Sri Lanka Export Development Board (EDB), is stepping up its support for apparel market diversification.

“Though the Lankan apparel sector caters to many international brands, such as Victoria’s Secret, Gap, Nike, Tommy Hilfiger and Marks & Spencer, we still haven’t been able to manufacture for the Zara brand, the world’s largest fashion retailer. This successful effort directly linked our apparels to Zara for the first time,” said EDB Director – Industrial Products Chitranjali Dissanayake recently.

Dissanayake was reporting on the success of the first-ever Lankan apparel industry delegation to Spain’s Inditex on 29 October. Inditex ranks as the world’s largest textile retailer by sales, is present in 87 countries, and owns international retail brands such as Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterqüe.

Inditex’s consolidated sales in 2013 totaled over $ 20 b, recording an impressive growth of 6% over 2012. The Group’s brands strive to sell fashionable products (fast fashion) with high quality. Inditex describes its business model as “creativity and quality design together with a rapid response to market demands”.

“Inditex is commonly known by its oldest and biggest brand, Zara. As a result of the Lankan industry leaders showing a keen interest to develop business contacts with Spain’s Inditex and to manufacture apparel in Sri Lanka for its Zara brand, the EDB promptly initiated a dialogue with Spain’s Inditex for an initial meeting with a Lankan delegation to present the country’s capabilities and invite Inditex SA to source from Sri Lanka. EDB succeeded in getting the meeting, resulting in a good session with Jesus Echevarria Hernandez, General Director of Communication for Inditex SA, at their headquarters in Spain. Under the guidance of Minister of industry and Commerce Rishad Bathiudeen and support of EDB Chairman and CEO Bandula Egodage, the EDB is stepping up support for the apparel market diversification efforts of Lankan sector.”
Apparels became the leading growth driver in September’s exports (followed by coconut and food, beverages and tobacco). September apparel exports grew by 4.4% to $ 403.8 m in September compared to the same period last year.

The pioneering 29 October Lankan delegation to Zara consisted of reps from Brandix Lanka, Timex & Fergasam Garments, Union Apparel and EDB officials. The six-member delegation, facilitated by EDB, Sri Lanka’s apex exports body, has held several one-to-one meetings with heads of sourcing teams of different Inditex product groups to explore manufacturing for Zara brand.

During the visit, the delegation was provided a Zara company presentation and a meeting with Hernandez, followed by a guided tour to their cutting and finishing processes and logistics departments located in corporate headquarters as well as headquarters of Zara and Zara Home, two Inditex brands. A detailed presentation on Sri Lanka’s capabilities on the apparel industry was made by the Sri Lanka delegation which was followed by a discussion.

The Sri Lankan apparel industry is readying to generate $ 5 b in export earnings by 2016 and the Government’s aim is to position Sri Lanka among the top 10 high quality apparel manufacturing countries in the world by 2020. Sri Lanka is gearing to position itself as a commercial hub and the apparel sector is keen on getting into supply chain management as well.

Wednesday, November 19, 2014

Kenya-Sri Lanka Joint Economic Cooperation talks a success

Daily FT - 18/11/2014



Kenya, the newest entrant to Africa’s top 10 list, called for renewed trade with Sri Lanka and in a display of its commitment towards this end requested three trade pacts with Sri Lanka in one go by 2015.

“We are looking forward to more trade interaction and expecting a delegation to Nairobi from Sri Lanka next year. By the time of your visit to Nairobi we are looking forward to conclude current discussions on three agreements being discussed and to sign them,” said Amb. Nelson Ndirangu Ogn (Director, Economic Affairs and International Trade of Kenyan Ministry of Foreign Affairs, Nairobi) on 12 November in Colombo.

Ogn was addressing Minister of Industry and Commerce Rishad Bathiudeen and top officials during his delegation’s courtesy call on Bathiudeen at the EDB. Ogn was in Colombo leading a nine-member trade delegation to Sri Lanka. The Kenyan team successfully concluded its Joint Economic Cooperation (JEC) session with Bathiudeen’s official delegation on 11 November.

Noting that Kenya is aiming to become a middle income country by 2030, Ogn expressed hope that the agreements – a Bilateral Trade Agreement, an agreement on Avoidance of Double Taxation and an agreement on Promotion and Protection of Bilateral Investments – would be formalised during Sri Lanka’s visit there.

“Once we formalise these three instruments at government to government level, the private sectors at both ends can commence their own trade. Even on agriculture cooperation, a draft agreement is now being finalised. Our Minister of Agriculture, Livestock and Fisheries will be coming to Sri Lanka to sign it once it is ready. All these bilateral agreements are for stronger trade between both countries. We also need to have ongoing B2B interactions and forge chamber level interactions.  President Mahinda Rajapaksa visited the Nairobi Chamber of Commerce last year and as a result the two chambers entered into a MoU which strengthened bilateral trade. We also saw your Chamber of Commerce in this visit and are impressed by your chamber, which was established way back in 1839. It is now time to expand business-to-business links between the two countries in a significant way.”

In 2013, trade between both countries stood at $13.94 m, rising from 2012’s $12.78 m.  Among Sri Lanka’s exports to Kenya in 2013 were natural rubber, tyres, sacks and bags, staple fibre, tea, rice, coconut coir and activated carbon. Trade in January-June 2014 totalled $ 5.86 m.

Kenya discovered oil and gas in 2012 and is now the ninth largest economy in Africa. In its Global Competitiveness Report 2014-’15, the World Economic Forum listed Kenya as the sixth best among the top 10 economic performers of Africa.

“I have been given to understand that 11 November’s Joint Commission (JEC) Session discussions were successful and I am pleased,” said Bathiudeen. “The JEC also helped to link our fruits and vegetables, construction, ceramics and leather sectors to Kenyan economy. We especially note your keen interest in our leather processing. We thank you for your invitation to us to Kenya’s Tea Expo in 2015. If you inform the EDB of the important events in your trade calendar in advance, we would be able to facilitate even greater B2B interactions. I am pleased about the Kenya Export Promotion Council’s interest to enter into a MoU with the EDB so that export and trade is facilitated starting from a higher level. Such a MoU can also facilitate joint trade delegations.”

Ogn and Bathiudeen also discussed other avenues of bilateral cooperation yesterday (17).
Also taking part were Ministry of Industry and Commerce Secretary Anura Siriwardene, EDB Chairman/CEO Bandula Egodage, EDB DG Sujatha Weerakoone and DoC DG R.D.S. Kumararatne.