Sri Lanka’s boat- and ship-building industry has recorded notable export growth, surpassing $ 53 million in 2025. While the country maintains a strong international reputation for quality across demanding markets, achieving sustained growth requires addressing logistical and infrastructural issues.
In an interview with The Sunday Morning Business, Dhanusha Marine Lanka Chairman/Managing Director and Chamber of Marine Industries Sri Lanka (CMISL) Board of Directors member Sumithra Fernando, who is also a committee member of the Advisory Committees of both the Export Development Board and the Ministry of Industry, explained that the main challenges facing the sector included bureaucratic delays in obtaining approvals and the absence of a dedicated industrial zone.
He highlighted the urgent need for a one-stop shop to streamline administrative processes and advocated for the establishment of manufacturing facilities near harbours to eliminate the high costs associated with inland transportation and launching.
Following are excerpts:
How would you describe the potential of the Sri Lankan boat-building industry and what kind of growth has been recorded in recent times?
In Sri Lanka, the fibreglass boat-building and ship-building industry is a significant and growing sector. Both previous Governments and the current administration have recognised that this is an emerging field within the broader industrial landscape.
Boat-building is an engineering-driven process, and out of the companies operating across the country, 12 companies, including my own, are active exporters. While the exact figures may vary, the boat- and ship-building industry usually contributes around $ 17 million annually to the economy, though this can vary depending on the year.
To support growth, we also established a marine chamber several years ago, and through this chamber, sectoral issues and challenges with the Government and international bodies are discussed.
The boat-building industry recorded $ 6.36 million from exports in 2025 and the overall industry growth was notable that year. What were the key factors behind this and how can Sri Lanka ensure sustainability of growth?
The main exporters in the country, including Sail Lanka, Chalana Boat Yard, Dhanusha Marine, and Neil Marine, among other boatyards, are driving this growth. Ship-building and boat-building are seeing significant activity in large boat exports to the African continent, along with some to the European market. Our company also exports to Europe and Scandinavia.
The high value of these products contributes to the boom. For instance, some yachts are valued at over $ 1 million and many other boats are priced around $ 275,000.
As a result, we experienced growth last year. A reduction in material prices and other such favourable factors also helped us remain competitive and sell more units. However, sustainability will depend on managing external costs.
With shipping disruptions linked to tensions in the Middle East, affecting routes near the Strait of Hormuz, what are the implications for the boat-building industry?
We are currently facing serious challenges due to rising raw material prices and supply chain disruptions. Fibreglass raw materials are a base product of crude oil. When oil prices rise, the cost of our materials increases immediately. Thus, we are facing material shortages, insurance interests, price hikes, and shipment delays due to the conflict, leading to several cost-related issues.
We have already signed agreements and fixed prices for clients in Africa and various Government institutes, so we cannot increase our prices even though our production costs have spiked. This is a major challenge because even though agreements are signed months in advance, the boat-building process takes at least six months, meaning the boats are still in production when material costs rise, which heavily impacts our margins.
Has the Government taken any measures regarding this issue?
We have discussed these issues and while we are yet to see a specific solution, we can observe attempts to support exporters. At times, while there are efforts at the top level to control the situation, that support doesn’t always filter down to the rest of the Government sector.
For example, during the fuel shortages, it was necessary to discuss fuel requirements at the highest levels to ensure access to diesel due to failed attempts to engage with Government officials. The entire Government apparatus needs to understand that it must prioritise and help the export sector. If the surrounding bureaucracy doesn’t facilitate this sector, we cannot fully capitalise on our geographic position.
You mentioned that transporting and launching boats requires clearances from multiple agencies. Typically, how much delay does this cause for exports?
The administrative process is quite lengthy. Following the completion of a boat, the industry must go through several institutions, including the Ministry of Defence (MOD), Department of Immigration and Emigration, Sri Lanka Customs, and the Board of Investment (BOI). The MOD clearance alone takes about a month to a month and a half.
These are significant issues which cause real friction with our clients, as they are not interested in our internal bureaucratic delays. If a client wants their boat delivered while we are held up by delayed approvals, it damages our reputation. It will be highly beneficial if the authorities streamline this process to ensure improved efficiency.
Infrastructure development is emphasised as a priority by many stakeholders. What specific developments are most urgently needed?
The lack of harbour-adjacent land remains the largest infrastructure issue. Since we are not located at the water’s edge, transportation costs are substantial. It is not simply a matter of fuel, but also the cost of paying different Government boards to obtain clearances for a boat to reach the port. This adds a considerable burden to the final price of the boat, which could be addressed by establishing proper infrastructure.
The most critical need is a single location for the process to take place and for the Government to consider providing land near the harbours where boat-builders can set up their yards. If builders have a place within the harbour area, they can build and launch their boats directly.
This would eliminate certain costs related to transport; approvals from Sri Lanka Railways, Sri Lanka Telecom, and electricity authorities; Police escorts; and many other approvals, mostly scattered across different offices and regions. While approvals are costly, the delays caused by the processes are the most harmful.
Thus, infrastructure development is key and it is understandable that such development would take years, given the extent of the work required. After more than eight years of industry demand, it must be acknowledged and appreciated that the incumbent Government agreed to build a launching pad in Beruwala, which is now in progress. This marks a notable victory for the industry. While the Government is making efforts, the industry would benefit even more if the same level of effort was demonstrated by officials as well.
Whether it is a dedicated launching facility or a common manufacturing zone, having direct access to the water is the only way to significantly reduce our operational bottlenecks. If the Government cannot provide this land or support such infrastructure, the industry will struggle to reach its full potential.
I have also been consistently advocating and planning for a dedicated industrial zone, which remains a priority. A specialised zone would solve many of our current problems by providing all necessary services and infrastructure in one location.
While this would require a significant investment, it would eliminate environmental concerns, simplify the launching process, and remove the logistical issues of transporting large vessels. We are still pushing for this to become a reality.
Do you see a need for labour training development and expansion in the industry?
The skill and reputation of this industry, specifically Sri Lankan fibreglass sector, are well regarded internationally.
There is significant global demand for our technicians, since approximately 25% of our workforce is in the Middle East, while a larger share of fibreglass workers in the Maldives are Sri Lankan. We also see high demand in markets like South Korea, Japan, and New Zealand.
While such involvement brings in foreign exchange, the migration of these skilled workers remains a challenge for the domestic industry as we lose our experienced talent.
If the Government is able to get involved in developing skilled workers through existing technical vocational institutions such as the National Apprentice and Industrial Training Authority (NAITA), it would be highly beneficial.
A large portion of the training is carried out by the industry itself, which is a great advantage to the country. While the industry can sustain these efforts, support from the Government sector would expand these training initiatives to a great extent and help address labour gaps.
Given Sri Lanka’s geographic advantage, what scale of investment is required to expand the boat-building sector?
The potential for investment is vast and many parties are interested in entering the sector. The local industry usually operates through partnerships where we act as the production unit and a foreign partner acts as the marketing unit.
To truly expand, we need investment in infrastructure, which is a massive undertaking. Building a boat is a specialised, capital-intensive job. One cannot simply invest and expect immediate returns without a clear marketing strategy. Once a market is secured, the investment becomes viable, but the initial capital required for high-quality production is substantial.
In terms of interest from foreign buyers or investors to expand production capacity, it is important to note that Sri Lanka maintains great quality. I have been working with the Scandinavian market, specifically Norway and Sweden, for 20 years. These are some of the most demanding markets in the world regarding quality, and we have met those standards consistently.
Similarly, other exporting companies have been exporting to the Netherlands and other similar regions. Our reputation is solid, but to grow that capacity, we need a Government vision that actively supports exporters rather than just observing them, by addressing bureaucratic delays and infrastructure requirements.
Last year saw a boom in the boat-building industry’s export earnings. What efforts are needed to ensure the sector’s continued contribution to Sri Lanka’s foreign exchange growth in the years to come?
The private sector is doing its part, but we need a cohesive vision from the Government sector and there must be an understanding that speed and facilitation are essential. A one-stop shop would be a massive improvement, since currently, the industry must deal with a large number of individual departments.
We shouldn’t be struggling with basic logistical issues or long delays in approvals for an industry that has proven its worth for over three decades. The Government needs to support the private sector more aggressively in order to solve these small but persistent bottlenecks. If we can streamline the path for exporters, the industry’s contribution to our national economy will grow significantly.