Aug 27, Colombo: Sri Lanka business leaders have extended an invitation to Japanese small and medium enterprises (SMEs) to set up their manufacturing facilities in Sri Lanka.
"We wish to extend our invitation to Japan - Sri Lanka Business Co-operation Committee to consider inviting SME's in Japan to set up their manufacturing facilities in Sri Lanka and make use of the opportunity of entering Indian and Pakistan markets through the present Free Trade Agreements Sri Lanka is enjoying with these two countries. Indeed, many of Japan's SMEs have come to rely more on international markets," said Daya Weththasinghe, President of the Sri Lanka - Japan Business Co-operation Committee of the Ceylon Chamber of Commerce, at a meeting held on 18th August with the counterpart organization Japan - Sri Lanka Business Co-operation Committee of the Japan and Tokyo Chambers of Commerce and Industry.
Mr. Tadayuki Seki, newly appointed Chairman, Japan - Sri Lanka Business Co-operation, who is also the Executive Vice President of ITOCHU Corporation Japan visited the Ceylon Chamber of Commerce to meet the Executive Committee of the Sri Lanka - Japan Business Co-operation Committee of the Ceylon Chamber of Commerce to discuss the way forward of promoting trade, investment and tourism between Sri Lanka and Japan.
More than 99% of all businesses in Japan are small or medium-sized enterprises (SMEs); they also employ a majority of the working population and account for a large proportion of economic output. While most of these companies are not as well-known as Japan's giants, they form the backbone of the service sector and are a crucial part of the manufacturing and export supply chain.
The definition of what constitutes an SME varies between countries: this paper uses the definition according to the Small and Medium-sized Enterprise Basic Act and used by Japan's Ministry of Economy, Trade and Industry (METI). This classifies as SMEs businesses in the retail or services sector with less than ¥50m (US$600,000) in capital, those in the wholesale sector with less than ¥100m (US$1.2m) in capital, and those in manufacturing with less than ¥300m (US$3.6m) in capital. In addition, it restricts the definition to those in retail with fewer than 50 employees, those in services or wholesale with fewer than 100 employees, and those in manufacturing with fewer than 300 employees.
SMEs are prevalent across the Japanese economy, constituting the lion's share of enterprises in all sectors. SMEs are most numerous in the retail, services and restaurant/lodging industries but among the most productive are those in the manufacturing sector. While many of those in the services sector are wholly reliant on domestic demand, a large proportion of SME manufacturers are essential suppliers to Japan's famous large exporters. SMEs, should be making the most of growth opportunities outside their domestic market.