Ceramic Tiles and Sanitary ware manufacturers, with the current government policy, are willing and ready to invest around Rs. 20 billion to expand their current production and to set up new factories, the Sri Lanka Ceramics and Glass Council (SLCGC) said.
SLCGC which hosted a press meet on Tuesday said that this in turn will create around 15,000 – 20,000 new job opportunities for youth. To meet this objective the SLCGC called to create a level playing field as importers are getting uncalled for benefits killing the local industry.
It was also pointed out that the Ceramic Tiles and Sanitaryware exports market was not cracked during on going the global COVID-19 pandemic and Sri Lanka exports amounted to around US$ 11.7 billion for 2020. Presently around 65-70% ceramic tiles and sanitary ware for domestic requirements is produced locally.
“As a result of the present government policy, the existing manufacturers are in the process of expanding their production and there are new entrants to the industry putting up new factories. As outlined by the vision for prosperity and to encourage national manufacturers to start producing everything that can be manufactured locally, President Gotabaya Rajapaksa and the present government have suspended imports of these items,” said SLCGC President, Anura Warnakulasuriya.
“Therefore, by the end 2021 we will be able to manufacture 100% of the requirement locally. There is also a healthy trend where locals prefer to buy ‘Made in Sri Lanka’ ceramics products. Dealers and distributors also state that their profit margins by selling local products are also satisfactory. There are also numerous requests if local producers could manufacture products with the brand names of dealers and this is now being pursued,” he also said.
“However SLCGC opined that whilst local present exports amount to around US$ 11.7 billion, current imports stand at around US$ 22 billion, leaving a trade deficit of US$ 10 billion. Due to this ‘uncalled for imports’ the trade deficit too has been heavily affected and weakened,” he added.
“It has also discouraged new local entrepreneurs and existing national manufactures like Royal Ceramics, Rocell Bathware, Lanka Tiles, OTTO, Bathware, Mactiles, RSL Ceramic, Hega Ceramic, Ambilipitiya Ceramic etc. making further investments,” said SLCGC Vice President, Mahendra Jayasekara.
“The main issue is that the stated book value for imported items in the valuation department of the Sri Lanka Customs is at a low and unrealistic rate. (Ex: To import a complete set of ceramic sanitaryware which weighs 65kg’s and includes a commode, tank, basin, pedestal, seat cover and water fitting the book value valuation stands at US$35.00/Rs.6,350, ”said SLCGC Vice President, Aravinda Perera.
This is an unrealistic amount as a complete set of ceramic sanitaryware cannot be manufactured for such a low cost because to purchase the seat cover and water fitting separately itself, it costs Rs. 3,500.
“This issue can be corrected by amending the custom’s ‘Test book’ value to US$ 100. Once this is amended, local manufacturers will be able to compete with imports and it will also prevent cheap inferior quality items being dumped into our country. And this will also help to stop the huge outflow of foreign exchange,” Mr. Aravinda Perera also said.
Once this book value is amended to $100, the importers and local manufactures will have to compete on a level playing field, and this will in turn benefit the consumer as they can get a competitive price. This will also silence the World Trading Organization as trade is not suspended and will help protect local manufacturers. Importers can continue their businesses, whilst the consumer will also be safeguarded.
“If this proposed situation is maintained over a period of two years, our country will be self-sufficient in the ceramic tiles and sanitary ware industry.
It will also help to increase the number of entrepreneurs in Sri Lanka which stands at 1.6% at present, to around 10% as more and more individuals will start manufacturing. This will also reduce unemployment as it creates a lot of job opportunities,” Mr. Aravinda Perera added.