5 key points from the Export Industry experts discussion on challenges faced by Sri Lankan businesses

The Advocata Institute hosted an online discussion on Zoom featuring Ashroff Omar (CEO, Brandix), Dilhan Fernando (CEO, Dilmah Tea), Romesh David (CEO, South Asia Gateway Terminals) and Prabhash Subasinghe (Chairman, Sri Lanka Export Development Board (EDB), moderated by Murtaza Jafferjee (CEO, JB Securities). The discussion covered the current challenges faced by Sri Lankan businesses and route to recovery, with a special focus on merchandise exports.

While the discussion explored the challenges exporters will face and the potential way forward, a few key points are summarised below.

● The apparel industry suffered a triple effect due to the pandemic. The industry is currently stated to be at a standstill while the exports in April are observed to be only minuscule compared to the previous year. However, there is a massive demand in the PPE (Personal Protective Equipment) area of the industry.

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● The tea industry had unexpected double-digit growth in April due to panic buying. However, issues in the supply chain persist. This situation has highlighted the need for Sri Lanka to reassess its trade and value addition, especially by empowering the rural economy and by establishing the uniqueness of products especially to suit the future consumer demand.

● While the EDB has been given the approval to import raw materials and products required for its exports, the country has to be innovative in the future. In manufacturing gloves, the rubber industry is sold out for the entire year and the incoming demand cannot be matched.

● Overall, shipping lines have faced a storm due to the supply shock that resulted in the closure of Chinese factories. While the terminal industry is not seen to make money at the moment, they are at an advantage given 80% transshipment. Amidst the drop in capacity, Sri Lanka seems to be in a better position than other countries in the region.

● Looking forward, free trade agreements could be a point of focus, and there is an immediate need for a strategic plan that looks at the short, medium and long term to address this crisis.