Royal Ceramics calls for import restriction on tiles, sanitary ware products
Royal Ceramics PLC, which controls Sri Lanka’s floor and wall tile markets, has called for immediate government intervention to restrict the importation of tiles and other sanitary ware products.
“The biggest threat to the local tile sector continues t o be t he inadequately governed influx of imported tiles. These tiles account for around 30 percent market share in value, and threaten local businesses, while also being responsible for a drain of foreign exchange,” Royal Ceramics Managing Director Nimal Perera said in the company’s latest annual report.
“We are responsible for providing direct employment to over 10,000 people, and employment in industries such as mining and quarrying, are dependent on the business we provide.
“In addition, we prize good governance and transparency, paying all stipulated taxes as well as the custom duties on imported raw materials.”
However Perera stressed t hat same cannot be said for the poorly monitored imported tile sector, where “real values of duties and cess are not paid and in many cases importers benefiting from BOI sanctioned
The biggest threat to the local tile sector continues to be the inadequately governed influx of imported tiles
concessions, import extraneous stock which is then sold within the retail market.” According to him, countries such as India, China and those in Europe, have very stringent laws in place to protect their local tiling and sanitary ware industries.
“Our export business is governed by these laws, and it is vital that a similar model be adopted here if local businesses are to flourish and truly benefit from the developments in the construction sector,” he remarked.
Sri Lanka’s tile and ceramic exports increased by 5 percent resulting in an increase to US$ 37.8 million in comparison to US$36 million in 2013. Royal Ceramics registered a 7 percent growth in its exports during the year.
Echoing Perera’s sentiments, Royal Ceramics Chairman A.M. Weerasinghe said, without government intervention to impose controls on the import of tiles and ceramic ware, the industry will continue to suffer, unable to enjoy the benefits of what should be an extremely conducive external environment.
In line with the import substitution policy adopted by the government, the 2014 budget created new provisions for including cement, ceramic and porcelain wall and floor tiles, marble floor tiles, granite and quartz tiles, wash basins, bidets and sanitary fittings, to be placed on the negative list of BOI concessions, meaning that these items can be imported only on condition that their equivalent is not available on the local market.
The government also increased the import cess on items such as ceramics, aluminum bars and tubes, and cement.
In May last year, Royal Ceramics bought the controlling stake of its rival tile manufacturers belonging to CT Holdings in a deal worth of Rs.2.9 billion, carving itself a virtual monopoly in the Sri Lankan tile market.
According to industry sources, following the acquisition, RCL now controls as much as 85-90 percent of the floor tile and wall tile market of Sri Lanka.