Business

Italian giant to invest in fruit industry

– MoU signed for processing plant

$ 250 m export target for 2023

By Madhusha Thavapalakumar

Following two years of discussions, Sri Lanka’s fruit exporters have attracted Noberasco, a leading Italian dry and dried fruit company, for a 10-year engagement in the island, which includes the setting up of a processing plant.
A Memorandum of Understanding (MoU) to this effect was signed between the Lanka Fruit and Vegetable Producers, Processors, and Exporters Association (LFVPPEA) on 22 February, 2019.
Speaking to The Sunday Morning Business, LFVPPEA Chairman Zuraish Hashim noted that Noberasco will purchase several fruit varieties from Sri Lanka which will be dehydrated and packed according to the international packaging standards and be introduced to Italian markets starting from this summer.
For this purpose, LFVPPEA has identified five companies to spearhead the targets that have been set for each fruit for the next two years.
However, the collaboration between the company and LFVPPEA is at the feasibility stage, with many details yet to be finalised.
“The scale is not confirmed, and at present, we are at the feasibility stage. Once the first and second shipments go, we will see whether value chain development also comes through them,” Hashim said.
However, the association has planned a further two visits to Italy to arrange buyers.
Based on the success of these operations, Noberasco may set up a processing plant in Sri Lanka within two to three years, which would result in the company producing fruits in Sri Lanka according to internationally-recognised standards. The plant is not feasible at present as Sri Lanka is unable to meet the required quantity.
The exact investment made on the plant would differ according to the technology that will be brought into Sri Lanka.
He added that the association was looking at enhancing value addition in the fruit and vegetable export sector, prioritising quality over quantity.
“We are currently adding value through dehydration, and will be expanding into more value additions by going into dehydration with less sugar, value packs, and pulp fruit.”
With several other new initiatives in the pipeline, LFVPPEA has set a strategic target of $ 250 million to be achieved by 2023 through the expansion of export markets.
“China is a new market. We have already gone to South America with dehydration and we haven’t even fully utilised Europe. We have only gone into the normal markets like India and Germany.”
Currently, United Arab Emirates, Saudi Arabia, Qatar, Maldives, India, United Kingdom, Kuwait, Germany, and Pakistan are major export markets of Sri Lanka’s fruits and vegetables.
When asked about the obstacles in the way of achieving the target set for 2023, Hashim highlighted non-tariff barriers and insufficient planting materials as major issues.
“We highlighted these barriers many years back. We told the government that they needed to get the non-tariff barriers removed before signing agreements with the world’s countries. But unfortunately, it’s still not done.”
According to LFVPPEA, exports of fruits and vegetable would be around $ 90 million in 2018 but did not confirm the numbers due to issues in the HS (Harmonized System) code under which exports are categorized.

Photo Indika Handuwala