Sri Lanka's EDB for more Agressive Entrepot Trade

14th June 2010, www.dailynews.lk, By Harshini Perera

Sri Lanka needs to re-consider the entrepot trade that was not aggressive during the past few years, Export Development Board (EDB) Chairman Janaka Ratnayake said. In the entrepot trade, value is added to an imported product in Sri Lanka which is less than three percent and will be re-exported with a higher value.

The products that can be considered under entrepot trade ranges from chemicals and cigarettes and to numerous products that will increase the country’s foreign exchange, Ratnayake told Daily News Business.

He said a financial arm has to be established similar to that of Ex-Im banks operating in other countries to address the financial needs of the SMEs in the country.

The EDB has recorded an increase of exports by 9.83 for the first quarter of this year as against the respective period of 2008 and 2009.

Among the sectors that have improved, agricultural sector is significant in which tea, rubber and other export crops showing significant highs. The agricultural sector has contributed 23.5 percent of the total exports last year.

The EDB expects to promote products for which Sri Lanka is famous such as organic fruits and vegetables, garments without guilt, high quality products and services.

There is a slight decline in fisheries products, textiles and garments, ceramic and porcelain products.

The turnover of exports for the first quarter this year was US $ 2.3 billion whereas it was US$ 2.08 billion in the respective period last year.

The country’s total exports contribution to the world export is as low as 0.05 which is in value nearly US $ 8 billion. It is similar to the revenue of a multi-national company of fortune 500 companies in the world, he said. He said that the exports turnover of the country was US $ 8.1 and US $ 7.08 billion for 2008 and 2009 respectively. Though there was a decline last year, EDB expects to regain the turnover of 2008 exports which is US $ eight billion this year.

Since Sri Lanka is politically stabilised now, the EDB expects to accelerate promotional activities to exploit international markets.

In the process, Sri Lanka will be promoted as a brand that is famous for specialized products such as Ceylon tea, gem and jewellery.

The EDB has developed a five-year corporate strategic plan in which Sri Lanka can position its products in the high end markets internationally.

Road shows of Sri Lankan products in different continents with the optimum support from the stakeholders including national and international chambers of commerce and foreign missions will be conducted in the future, Ratnayake said.

“We will be popularising Sri Lankan products with media campaigns in foreign magazines and Journals such as BBC, CNN. A wide space will be given to IT BPO service oriented professional services. We have recognised triggers and barriers of each and every product which will be promoted aggressively in the future,” he said. The EDB will support the SMEs sector with subsidies, technology, guidance and advisory services. He also emphasised the need to trickle down the benefits of exports to the SMEs.

“We will be presenting new budget proposals to the authorities to support SMEs as well as overall exports of the country. We as an Apex body, will be conducting the Presidential Exports Awards, the highest recognition for exporters in November this year which was not conducted for the last three years. Sri Lanka Expo Fair will also be held early next year.