Jan 18, Colombo: The Sri Lanka Export Development Board (EDB) in collaboration with Asian Development Bank (ADB) and rubber sector stakeholders on Wednesday officially launched a Special Purpose Vehicle (SPV) known as Lanka Rubber Global Consortium Pvt Ltd (LRGC).
The motive of establishing SME clusters by way of formation of a SPV is to create local brands more competitive in the global arena as this would help to improve the country to drive towards a highly competitive export oriented economy, the Government Information Department said.
LRGC, which consists of five rubber sector companies namely, Jafferjee Brothers Exports (Pvt) Ltd, Polymer Products Impex (Pvt) Ltd, Sinwa Holdings (Ltd), Textrip (Pvt) Ltd and Microcells (Pvt) Ltd, would also work collectively to improve export competitiveness of rubber products by jointly setting up of a finite element analysis center, joint venture manufacturing, building forward and backward linkages in the rubber value chain, joint product development and R & D facilities which result in improving the overall growth of the entire rubber value chain.
The Consortium's office will be operation from the Exports Development Board building for an initial period of one year.
Speaking at the inauguration of LRGC, EDB Chairperson Indira Malwatte described the Special Purpose Vehicle as a widely adopted mechanism across the global context and expressed confidence that the LRGC would work towards initiating activities pertaining to the value chain development and supply chain management processes in polymer and allied industries with a view to remain competitive in global markets in a sustainable manner.
"This is a milestone for all of us and we are collaborating to compete with the rest of the world. With this new consortium, it is planned to achieve set targets of the industry thereby come up with strategic and proactive initiatives to identify pain points, then to act as a best solution provider for Sri Lankan make rubber products," Malwatte said.
Malwatte said EDB, which is currently in the process of developing the National Exports Strategy, targets US$ 13 billion exports this year, adding that however, as per the regional data, Sri Lanka total exports are likely to reach US$ 15 billion. Sri Lanka has also set an export target of US$ 20 billion by 2020 and according to Malwatte Sri Lanka is well on its path to meet this target.
Rubber Products Industry is a key sector contributing 6.9% to exports in 2016. The major markets are USA, Germany, Belgium, Italy, Canada, UK, and Brazil. Sri Lanka supplies to major international brands such as Continental, Solideal, Wonder Grip, Mapa, and Safety work, Tesco, etc. Companies in the rubber industry use state of the art technologies for manufacturing the above international brands.
Tire sector accounts for the largest share of turnover (60%) of rubber exports which include solid tires, pneumatic tires, bicycle tires, three wheeler tires and a variety of smaller tire categories. Currently Sri Lanka is considered as the global leader in solid tires, which accounts for over 20% of the global demand and rubber glove caters to over 7% of the global demand.