Exporters Association of Sri Lanka

No: 50, Nawam Mawatha, Colombo 02, Sri Lanka.

Chairperson's speech 2011 - 2012

ADDRESS AT THE EASL AGM HELD ON 27TH JULY 2011

Hon Mr Basil Rajapaksa , Governor Central Bank Ajith Nivard Cabraal, Chairman Ceylon Chamber Mr Anura Ekanayake, Chairman EDB Mr Janaka Ratnayake, IP Chairperson Mrs Nirmalie Samaratunge Distinguished Invitees Fellow Members of the EASL and Guests.

The Annual Report of the EASL for the year past is in your hands. Mrs Nirmalie Samaratunga has already addressed this House with an overview of the EASL's activities during the period 2010/2011. I would however urge you to peruse the content of the Annual Reports and observe the wide gamut of export related activities in which the EASL has been involved.

The on-going thrust of the EASL in the year ahead will be to continue its endeavours to capitalise on achievements thus far and press on to create an environ where Exporters will find it worthwhile, and conducive towards keeping their businesses moving in an 'equal playing field ' environ with its global competitors.

In the past couple of years, despite an expectation of the dividends of peace, Exporters had to contend with unprecedented issues as a result of world economies crashing, and markets dwindling. They have had to re-invent their strategies. Changing markets, revised consumer demands, volatile currency market concerns and a range of 'relative to the specific product' issues had to be addressed.

Additionally in 2010, the lament of Exporters involved in substantive exports to the EU, was that the withdrawal of GSP + was going to have a staggering impact on their markets. And indeed it did, affecting some more than others. The result has been that companies with greater resource bases, led the way with a renewed zeal to remain competitive. Diversified product development strategies, which addressed aspects such as improved productivity, innovative marketing, creating quality awareness whilst addressing compliance issues, and of course the importance of branding and identifying niche markets have evolved.

The export figures for the 1st and 2nd quarters of this year reflects this happy recovery despite the sluggish performance of the traditional markets. Unfortunately , every exporter has not had the resources, ability or the capacity to weather the downturn in the manner in which others have done.

The disappointment that funds expected from the Export Development Reward Scheme for the 3rd and 4th quarters have not been forthcoming has been a recurring issue being raised with which the EASL has had to contend .

Even at this late stage, I would ask if there is any possibility for some consideration to be given to the fulfilment of the scheme, even if only as a method whereby, Organizations which demonstrated their commitment to maintain their Export enterprises, albeit absorbing losses at the time, in anticipation of being compensated, if they qualified within the criteria of the Scheme, can be recompensed.

The introduction of Simplified VAT (SVAT) has been a comfort for Exporters who did not previously qualify for the suspended VAT program. . Once the system is fully operational, Exporters will be relieved of the problem of blocked working capital waiting for their VAT refunds. We acknowledge the willingness of the IRD VAT unit to work towards resolution of the teething problems of the revised system.

Sri Lanka's Export Marketers will be watching the traditional US ,EU and UK markets where we know a turnaround in their economies will result in restoration of business, but in the meantime we need to continue developing new strategies and initiatives to create a demand for our products in emerging markets.

In today's technology driven age, one can virtually visit and identify the potential market places without too much difficulty/discomfort , and certainly in a more cost –effective manner.

The professionals at the SL EDB under direction of CEO Janaka Ratnayake and his team, together with the respective product related communities will without a doubt spearhead the thrust towards facilitation of new market development.

Exporters' concerns arising from anti- competitive practices which have been burning issues for many years have been addressed in the last budget, whilst measures by which there would be even greater facilitation to promote exports have been recognized. We know that progressive action on these fronts will result.

An export target of US$20BN by 2020 has been set and we believe it is achievable.

The evidence of the infrastructural development country wide is welcomed. But let us not be lulled into complacency believing that with a fantastic road and telecommunication network linking newly opened areas to the economic hubs, development will automatically follow .

Challenges which were hitherto not experienced must be anticipated. For example, in order to remain sustainably competitive, Sri Lanka will need to comply with the imposition of various new rules and regulations which will govern importation into the different destinations, Compliance demands have already surfaced and it is vital that we gear ourselves, to meet the emerging challenges.

This is a valid concern, particularly with the agricultural exports. I am not referring to the traditional products such as Tea and Coconut but to the several other non traditional agricultural products and produce for which markets are emerging. Aspects such as methodology to implement certification will have to be be addressed. The Ceylon Chamber has been proactive and already set up the Switch Asia program to facilitate this aspect. We acknowledge this initiative.

Information and knowledge technology will play an important role and must be used to help us remain ahead . This will also encourage educated youth to be absorbed into the system bringing to the fore new entrepreneurs. A frequent topic at our meetings has been the shortage of labour and the incentives Organizations have had to offer to retain skilled workers in employment. As the per capita income improves, the labour component of Sri Lanka's cost of production will not be an easy number to absorb.

Transportation (fuel) costs are steadily rising. With increased export product needing to be moved across the country , more time and cost effective methods need to be addressed. I was delighted to learn of the consignment of Prima Flour which was transported by rail, direct from Trinco to Colombo Port. This mode of transport should be encouraged.

Our rail service has not played too important a role in the transportation of produce.. If this facility can be effectively presented to service the movement of even 30% of produce currently being moved across the country, it would ease congestion on the roads whilst reduce maintenance cost on our road network. The benefits can be endless.

Opportunities will present and challenges will arise. Institutional mechanisms will need to be implemented to create a fast track problem resolution methodology to which Export Entrepreneurs can have easy access. The announcement that the Exporters Forum will once again become functional is welcomed. It can perhaps be an appropriate point of reference for the transparent resolution of Exporter concerns.

The year ahead is definitely going to be a challenging one. The EASL looks forward to engaging with the Government and the Private Sector in extending its capacity and willingness to support every endeavour towards take this country to a greener and sustainable future way beyond 2020.

Thank you.