Sri Lanka’s rubber industry on track for $ 1.2 billion in exports - Opportunity Sri Lanka
Sri Lanka’s rubber industry on track for $ 1.2 billion in exports

Sri Lanka’s rubber industry on track for $ 1.2 billion in exports

The Morning: The Sri Lankan rubber product industry is expected to continue its growth during the current year and is targeting a minimum of $ 1.2 billion in export revenue during 2022, despite the prevailing negative market conditions in Sri Lanka.

Speaking to The Sunday Morning Business, Sri Lanka Association of Manufacturers and Exporters of Rubber Products (SLAMERP) Director General Rohan Masakorala stated that the main target for the rubber product industry in 2022 was to achieve a minimum of $ 1.2 billion in export revenue, which was the level achieved in 2021. He expects the rubber product industry to surpass this target provided that the current situation in the country improves.

Explaining further, he stated: “We can definitely surpass the target of $ 1.2 billion and have already received a marginal increase of 2% Year-on-Year (YoY) during the first quarter of 2022 when compared to the first quarter of 2021. However, all of this depends on the market and the domestic situation. So far we have not faced any supply chain issues and our companies have functioned without any disruptions, but due to the current power crisis and other related restrictions, we are unable to take on any extra orders. Therefore, expansion isn’t possible in the current situation.”

However, Masakorala pointed out that while demand for rubber products and volumes remained high, their margins were being impacted by the increasing cost of production and increasing price volatility of rubber products.

Accordingly, he noted that the cost of production for the industry had increased due to surging energy and raw materials prices, as natural rubber prices in the global market had increased considerably in 2022.

Furthermore, global market prices of certain products such as rubber gloves have fallen considerably in recent times as the world has begun emerging from the Covid-19 pandemic.

Sri Lanka’s rubber product industry is one of the country’s major foreign exchange earners and was its third largest merchandise exporter in 2021 as per data published by the Central Bank of Sri Lanka (CBSL), recording an export revenue of $ 1.1 billion, behind only textile and garment exports which amounted to $ 5.4 billion and tea which accounted for $ 1.3 billion.

Speaking to The Sunday Morning Business, Rubber Research Institute of Sri Lanka Additional Director Dr. V.H.L. Rodrigo stated that one of the major bottlenecks for the development of Sri Lanka’s rubber product export business was the fact that the country’s rubber cultivation was only capable of supplying 50% of the raw material requirements of the rubber product industry. The remainder is required to be sourced from abroad, which in turn reduces the foreign exchange earning capacity of the rubber product sector.

“Therefore, currently we are targeting the expansion of the natural rubber production capacity of the country by promoting cultivation in non-traditional rubber cultivation areas,” Rodrigo added.

OSL take:

Sri Lanka’s manufacturing and exports sectors continue to record a growth despite facing challenges posed by the pandemic and and ongoing economic challenges. It is in such a backdrop that rubber products industry has shown signs of achieving high revenues this year. The many trade agreements as well as trade concessions enjoyed by the country have helped boost Sri Lanka’s rubber products industry while the many programmes launched by the Sri Lankan authorities to uplift and develop the rubber plantation industry have also helped the cause. The growing business potential in Sri Lanka’s rubber products industry is indicative of the overall expansion of business/investment opportunities in the industry. Given Sri Lanka’s economic resilience and the growing business potential of the industry, foreign businesses/investors could confidently explore opportunities in the rubber products industry.

Share this:

Article Code : VBS/AT/08072022/X_1

    For More Info and Help

    Leave a Comment