SL exports value addition equals Ireland, Finland
Value addition power of Sri Lanka exports is on par with that of Ireland and Finland, a minister reveals.
“The value addition levels of our exports have increased to 153 points in 2010 compared to the value of 100 points in the base year 2000, showing a 53% increase in value addition in a 10-year period. This is on par with Ireland and Finland and closely behind France and Japan in terms of the World Bank’s export value index,” Industry and Commerce Minister Rishad Bathiudeen said.
The minister stated that this positive trend is further strengthened by the 2012 budget propos- als by President Mahinda Rajapaksa, encouraging value addition in a significant way by discouraging export of several materials in raw form such as raw rubber, natural graphite, clay, sand and even timber logs.
Also, the extention of various tax incentives for value added manufacturing investments and research and development, during the same budget, enhanced the country’s national value addition efforts considerably, he said.
“Among other leading value addition steps are the Tea Promotion and Marketing Fund for value addition on Pure Ceylon Tea, increasing research on rubber technologies for rubber value addition, setting a new aim of 3,650 million coconuts by 2016 along with value added production of coconut cream and milk powder and the Department of Export Agriculture’s new measures to increase replanting and new planting activities of export agricultural crops such as cinnamon and pepper.”
Minister Bathiudeen was addressing the CMA Management Accounting Summit 2012 at Taj Samudra Hotel on the eve of June 21.
He also highlighted the new budget proposals of exports with a domestic value addition of more than 65 percent, with local patent rights, to be taxed only at a maximum rate of 10 percent annually.
All these initiatives are expected to strongly contribute to our exports, the minister said. The country’s export sector grew 21 percent despite the global economic downturn in 2010. The momentum improved further in 2011 by growth rate of 23 percent. The industrial exports which accounted for 72 percent of the total export earnings grew by 28 percent.
“I am also pleased to inform that the revised Industrial Production Index of Sri Lanka has begun to show with more clarity of emerging structural changes in the indus- trial sector giving a better understanding of value addition. For example, the share of the apparel industry in the revised Industrial Production Index has increased to 24 percent from 22.7 percent, showing increased value addition in the apparel industry,” the minister said.
Explaining the importance of apparel success to rest of the exports, Minister Bathiudeen said, “Our apparel industry is a viable model that shows how value addition was successful. Apparel is the major export item from Sri Lanka with US$ 295.5 million export in April this year.
Earnings from merchandize exports thereafter rose to $ 10.5 billion in 2011 from $ 8.6 billion 2010, surpassing the $ 9.1 billion export target for 2011.”
The minister said that good quality and disciplined workforce and the government actively working with the industry to ensure decent working conditions in garment factories contributed to its success. “The industry itself paid early attention to improve productivity to off-set higher input costs resulting from the need to import almost everything to create a piece of premium garment.”
“As a result, Sri Lanka has the highest productivity levels among Asian garment producing nations. To differentiate itself from other garment producers Sri Lanka then launched Garments Without Guilt, that helped to improve our image in the international markets,” he said.
Sri Lankan manufactures decided to take an active lead and many factories submitted themselves to an independent audit of their working conditions.
Speaking of the role of Sri Lanka’s management accountants, Minister Bathiudeen said, “As you are already aware, with the dawn of peace thanks to the leadership of President Mahinda Rajapaksa, Sri Lanka is now in a new phase of economic upswing which require the contribution of the professionals such as Management Accountants.
Therefore, let me congratulate and commend Sri Lanka’s 5000 plus certified accountants, including the CMAs, whose professionalism is now reported to be in par with that of international standards. According to the esteemed New York Times, Sri Lankan accountants have successfully carved their place in the global accountants’ outsourcing market fulfilling a demand for affordable and quality accounting skills.”
The SAFA-CMA International Management Accounting Summit 2012 is held on the theme ‘Sustainability and Corporate Responsibility’ and is attended by all professional accounting bodies in India, Pakistan, Bangladesh, Sri Lanka, Nepal, Maldives and Bhutan. Technical Sessions of the summit are to conclude today. During the inauguration event, the firstever Tamil translation of CMA study pack was handed over to Minister Bathiudeen by Trichy (in India) based accountant Selva Kumar. The Tamil study pack is an initiative by CMA Sri Lanka to popularise management accountancy among Tamil language students of Sri Lanka.