Business

$ 15 b merchandise exports target for 2022

  • Apparel gets more orders: Bandula
  • Plans to open more garment factories outside Western Province

By Imesh Ranasinghe 

Sri Lanka expects to increase merchandise exports in 2022, and anticipates $ 15 billion in revenue through said exports, The Sunday Morning Business learns.

Speaking to us, Trade Minister Dr. Bandula Gunwardana said that merchandise exports have increased by 25% in 2021, an amount which the Government plans to increase in 2022.

“We are targeting upto $ 15 billion in revenue from merchandise exports, an increase from the $ 10 billion we get now,” he said.

He said that due to the changes that affected the market following the Covid-19 pandemic, Sri Lankan garment factories are getting more orders for their textiles. Further, in a move to encourage more textile exports, the Industries Ministry together with the Trade Ministry will help 25 small and medium-scale entrepreneurs who would like to open garment factories by providing them lands outside the Western Province.

The Minister added that there will be a greater focus on exports such as seafood, ornamental fish, coconut, and value-added rubber products. Moreover, he said 1,000 export processing villages will be completed by 2022.

“We have planned to open 300 coffee-producing villages in the Nuwara Eliya District,”  Gunawardana said.

He further added that Sri Lanka’s exports will look into product diversification, market diversification, and product innovation. 

Meanwhile, Export Development Board (EDB) Chairman Suresh de Mel told us that Sri Lanka would look into market diversification and product diversification in 2022, while advising exporters to be agile and focus on some of the changes that are happening in the world market.

He said that value addition to Sri Lankan exports is very important.

“We have highlighted certain aspects of export strategy, including export services such as IT, Business Process Management (BPM), and logistics,” he added.

However, he noted that focusing on specific exports will depend on global trends.

The EDB Chairman added that a special focus would be given to organic food, value-added food, and agriculture, which have experienced an upward trend in the world market recently.

Regarding focus markets, de Mel said that they have planned to connect more to Asian and African markets next year, as there are new opportunities in those markets for exports under market diversification.

De Mel further opined that Sri Lanka should focus on value-added products to niche markets, which are ideal for exports.

“Buying and selling without value addition is the biggest sin, as we have good products such as cinnamon and black pepper, which are high quality products that are among the best in the world,” de Mel said.

Further, he opined that Sri Lanka should sell its exports to the premium markets: “To enter the premium market, the products should be processed with added value to match that market.”

For example, tea exporters earn money from the tea bag, which is a value addition to the product, he noted.

The EDB Chairman also pointed out that due to the existing trade war between the US and China, opportunities have become available for niche markets, as some are moving their productions out of China over fears of depending solely on China.

De Mel said that the biggest challenge that Sri Lankan exporters face is their inability to balance the quality, volume, and the price of their products.

“This is why we need to focus on improving the quality and sell these products in a quality market,” he added.

Moreover, he stressed that it was pointless to have the world’s best cinnamon and sell it to Mexico or to have the best pepper in the world and sell it to India, because Mexico re-exports these products to the US while India re-exports to Europe. 

“We don’t have a sufficient supply to target the mass market, as there is a shortage of raw materials and labour in these sectors,” he acknowledged.