Business
We become importers or manufacturers depending on govt policy: industrialists
From left: SLCGC Vice President Aravinda Perera, SLCGC Vice President Mahendra Jayasekera, SLGCC president Anura Warnakulasooriya and SLCGC Member S.H.B. Karunaratne
SL Customs ‘text book’ not in line with President’s vision on Production Economy, they say
by Sanath Nanayakkare
A leading local ceramics products manufacturer and member of Sri Lanka Ceramics and Glass Council told the media recently that their members choose to become manufacturers or importers depending on the policy of the government of the day.
“If we find it more profitable to import and sell due to policy decisions, we import. If we see the policy environment in Sri Lanka is conducive to manufacturing locally, we manufacture. We interchange our roles according to policy framework of the government”, he said.
Member of Sri Lanka Ceramics and Glass Council S.H. B. Karunaratne whose company’s product range is exported to about 47 countries made these remarks while speaking at a press conference organised by the Council to voice a ‘major weakness’ in Sri Lanka Customs’ Valuation Book which ‘unfairly’ favours importers of ceramic bathware, glass ware and allied products making things hard for local manufacturers.
“We do believe in free trade which is a two-way street and we can successfully face competition offered by foreign products. But the current valuation for invoicing by Sri Lanka Customs is so skewed and heavily favours importers and doesn’t create a level playing for competent local manufacturers who have invested heavily in the industry. This is not fair and it needs to be rectified,” he said.
“President Gotabaya Rajapaksa’s national policy framework of Vistas of Prosperity and Splendour has created a conducive environment for local production, therefore, we are encouraged to remain as manufacturers”.
“Some social media posts claim that only Rocell makes bathroom sets in Sri Lanka and they produce their goods for individuals of upper-income class and big projects. The truth is not only Rocell but Auto Bathware, RSL Ceramics, Hega, Embilipitiya Ceramics also make complete bathroom sets on a bigger scale and several other companies on a smaller scale. That’s why there was no scarcity of products despite the ban on imports.. Our manufacturers are not producing 100% of the local market requirement. But because of the government’s policy, we have planned to invest Rs.2-3 billion in the near term. With these investments our 60% local production would increase to100% and we will be self-sufficient in ceramic products in two years. And we have our own transparent pricing system to make sure local consumers have access to local products of good quality at affordable prices according to their choice”.
“The main issue that discourages potential manufacturers and existing national manufacturers is that the Customs valuation book value for imported items is at a low and unrealistic rate. To import a complete set of ceramic bathware which weighs 65kgs and includes a commode, tank, basin, pedestal, seat cover and water fitting, the book value for invoicing stands at US$35.00 or Rs.6,350. This is an unrealistic amount as a complete set of ceramic bathware cannot be manufactured at such a low cost, because to purchase the seat cover and water fitting alone it costs Rs. 3,500”.
Suggesting a solution to the issue he said,” This issue can be corrected by amending the Custom’s ‘text 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 in our country. And this will also help to stop the huge outflow of foreign exchange.
“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”.
When asked if their members have voiced their concern with the authorities on the ‘unfair’ valuation method by Sri Lanka Customs, Karunaratne said that they would be meeting Prime Minister Mahinda Rajapaksa to discuss the matter at an upcoming meeting.
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SLT-Mobitel, the nation’s ICT and Telecommunications Service Provider recently partnered with Spotify, to mark their launch in Sri Lanka. Spotify is a paid premium music streaming app which allows subscribers to listen to music to their hearts content. Both, SLT-Mobitel Post-Paid and Pre-Paid customers will now be able to enjoy Spotify by activating a monthly recurring subscription or one-time subscription plan and access unlimited music streaming and downloading facilities.
The subscription charges will get added to the user’s customary billing, where payment will be deducted in real time. Starting from the payment date, the user will be able to access Spotify and download their favourite songs, for the next 30 days. Users who sign up for their first monthly subscription will receive an additional one month, courtesy of Spotify. The one-month subscription plan is not applicable with one-time subscription plans. SLT-Mobitel data rates, depending on the user’s respective broadband charges, will apply.
Spotify also has some exciting features that will provide SLT-Mobitel customers with the opportunity to listen to ad-free music, access millions of uninterrupted music under one platform, play any song they like, anywhere they go, and also be able to enjoy their music offline.
SLT-Mobitel customers can select their preferred premium package under four categories; Individual, Duo, Family, Student. Each category has recurring and non-recurring plans. After one month of free streaming, the package will activate once the offer period terminates. While both, the Individual and Student premiums are limited to one account user, the Duo package offers two accounts and the Family premium is accessible through six accounts. To view Spotify plans, users can log on to https://spoti.fi/3aLWvce
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by Sanath Nanayakkare
Anyone conversant with the elements of a political economy would know that Sri Lanka is using its ‘sovereign power’ to manage the different dynamics of the economy in a sustainable manner, Professor W. D Lakshman Governor of the Central Bank said on Wednesday.
“Some critics are saying that we adopt a so-called modern monetary theory. That’s not the case. In fact, Sri Lanka is using its sovereign power in a number of economic aspects to honour its external debt repayment commitments as well as to reduce its debt burden in the medium term as well as achieve resilient growth in the medium to long term, he said.
“We make policy decisions to boost our gross foreign reserves, meet our external debt servicing, to facilitate monetary expansion, to boost our GDP growth, to strengthen our current account balance and manage our domestic and external economic variables in a sustainable manner. This is not a modern monetary theory. This is an age-old tool used by central banks around the world when the circumstances demand it, he said.
“Certain trade-offs will be necessary when dealing with an economy which has a big fiscal gap to bridge. There are efforts to push Sri Lanka towards the IMF again which would in turn have influence on our policymaking. We have taken policy measures to stabilize the economy and we have adequate reserve levels to meet our debt repayments. Meanwhile, we are in negotiations with overseas central banks and multilateral agencies to further boost our reserve level and it would materialise within a matter of weeks,” he noted.
“One of the tools the Central Bank has introduced is in respect of repatriation of export proceeds into Sri Lanka and conversion of such proceeds into Sri Lankan rupees in order to strengthen the foreign exchange situation of the country,” he said.
The Governor made these remarks while delivering the keynote speech at a webinar organised by the Veemansa Initiative led by its Managing Director Luxman Siriwardene – the former Executive Director of Pathfinder Foundation.
The webinar revolved round the topic ‘External debt situation in Sri Lanka: Are we heading for a resolution or crisis?’
Professor Sirimal Abeyratne, Prof. Sumanasiri Liyanage, Dr. Nishan de Mel and Dr. Ravi Liyanage were the other speakers on the panel.
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By Hiran H.Senewiratne
CSE produced signs of a rebound yesterday with both indices closing positive, though turnover remained low. Central Bank Governor W.D Lakshman’s recent statement on managing foreign reserves gave some boost to the market yesterday, stock market analysts said.
The index experienced a zigzag movement within the early hours of trading; thereafter, it recorded a slight up-trend as it reached its intraday high of 7,439. Later, the market witnessed a down-trend at mid-day, followed by a sideways movement and closed at 7,372, gaining 43 points during the month of February, market sources said.
It is said the banking sector dominated turnover with a contribution of considerable parcel trades in Sampath Bank, Commercial Bank and HNB.
Further, the Commercial Bank’s impressive quarterly results during the recent turbulent period also built investor confidence. Commercial Bank was able to register a18 percent net interest income when other banks were reporting a decline. Its share price increased by Rs. 3 or 3.5 percent. On the previous day, its shares started trading at Rs. 85 and at the end of the day they moved up to Rs. 88. Due to the positive growth results, the bank announced a Rs. 4.40 dividend per share, plus a Rs. 2 script divergent for every share.
Further, Sampath Bank shares also appreciated in both crossing and retail. In crossings its shares appreciated by Rs. 1.At the end of the day they moved up to Rs. 154.50. In the retail market, its shares moved up by Rs. 2 or 1.3 percent. Previously, its shares fetched Rs. 154 and at the end of yesterday they moved up to Rs. 156.
Amid those developments, both indices moved upwards. The All Share Price Index went up by 104.48 points and S and P SL20 rose by 67.78 points. Turnover stood at Rs. 3 billion with four crossings. Those crossings were reported in Sampath Bank, where 3.9 million shares crossed for Rs. 602.2 million, its share price being Rs. 154.50, HNB 375,000 shares crossed for Rs. 39.4 million, its shares traded at Rs. 105, Pan Asia Power 9.5 million shares crossed for Rs. 33.2 million, its shares traded at Rs. 3.50 and Access Engineering 1.2 million shares crossed for Rs. 28.2 million; its shares traded at Rs. 24.
In the retail market top five companies that mainly contributed to the turnover were, Expolanka Rs. 450 million (10 million shares traded), JKH Rs. 205 million (1.3 million shares traded), Browns Investments Rs. 199 million (34.9 million shares traded), Sampath Bank Rs. 191 million (1.2 million shares traded) and Dipped Products Rs. 137.7 million (2.8 million shares traded). During the day 101 million share volumes changed hands in 18046 transactions.
During the day, Expolanka, the biggest contributor to the turnover, saw its share price appreciating by Rs. 6.20 or 15 percent. Its share price quoted on the previous day was Rs. 41 and at the end of trading yesterday it moved up to Rs. 47.
Sri Lanka’s rupee quoted wider at 193.50/195.50 levels to the US dollar in the spot next market on Thursday while bond yields remained unchanged, dealers said. The rupee last closed in the spot market at 194.50/195.00 to the dollar on Wednesday.
