Company set up to develop polymer industry | Sunday Observer

Company set up to develop polymer industry

Lanka Rubber Global Consortium (Pvt) Ltd., was incorporated as a Special Purpose Vehicle (SPV) to collaborate in value chain development and supply chain management processes in polymer and allied industries, to remain competitive in global markets.

For the first time in Sri Lanka, the consortium has brought together rubber sector manufacturers, exporters, the Export Development Board (EDB), Asian Development Bank,

Rubber sector consultants from local and foreign domains and other stakeholders around a single entity “The consortium is a step in the right direction and hope it will continue for many years in serving the industry under the theme of ‘collaborate to compete’. Although the consortium and the members are young, I am confident that they are capable and energetic enough to take up the challenges of the ever changing business environment on a single economic collaboration platform,” Export Development Board Chairperson and CEO Indira Malwatte said.

The rubber products sector has been identified as a thrust industry which has a potential to contribute markedly to the export revenue and established a reputation for quality and reliability. The industry’s contribution was 6.9 % to exports in 2016 and 7.3% up to January to November 2017.

A value chain study for the rubber sector was carried out under this project.

Sri Lanka produces a wide variety of value added rubber products from both latex and dry rubber such as solid tyres, latex gloves, rubber bands, extrusions, beadings, mats, miscellaneous sports goods ,etc. by processing raw rubber for exports.

The rubber products industry is a key sector, contributing 6.9% to exports in 2016. The major markets are USA, Germany, Belgium, Italy, Canada, UK, and Brazil.

Sri Lanka supplies to major international brands such as Continental, Solideal, Wonder Grip, Mapa, and Safety work, Tesco, etc. Companies in the rubber industry use state of the art technologies for manufacturing the above international brands.

Tyre sector accounts for the largest share of turnover (60%) of rubber exports which include solid tyres, pneumatic tyres, bicycle tryes, three wheeler tyres and a variety of smaller tyre categories. Currently Sri Lanka is considered as the global leader in solid tyres, which accounts for over 20% of the global demand and rubber glove caters to over 7% of the global demand.

“EDB which is currently in the process of developing a National Export Strategy targets US $ 13 billion exports this year. However, as per regional date, Sri Lanka’s total exports are likely to reach US $ 15 billion this year. Sri Lanka has also set an export target of US $ 20 billion by 2020 and is well on its path to meet this target,” she said.

The EDB has implemented several programs to assist the rubber industry in the recent past, i.e. System Development Program to obtain ISO 14001 and 50001 certifications, Technical Training and Exposure programs in UK and Malaysia.

The EDB having collaborated with the Asian Development Bank carried out a study on ‘SME Cluster Development’ to identify issues being encountered by companies in their value chains pertaining to few identified sectors in Sri Lanka such as rubber, fruits and vegetables with the objective of assisting them to address some of the major issues hindering exports.

The EDB has implemented the several programs to assist the rubber industry in the past years such as System Development Program to obtain ISO 14001 and 50001 certifications, Technical Training and Exposure programs in UK and Malaysia, financial schemes to obtain relevant certifications/testing not available in Sri Lanka, Trade fair participation and B2B meetings in several countries.

The EDB in collaboration with the Asian Development Bank (ADB) carried out a study that the most of companies are especially SMEs and identified issues being encountered by companies in their value chains.

One of the issues identified by the study was that individually are in a weak position to address some common issues prevailing in the value chain. Therefore, it was proposed that collective effort might bring solutions that could be executed through the cluster development and financing approach accepted worldwide.

Giving impetus to the rapid adoption of “collaborate to compete” theme Sri Lanka has embraced a novel concept. Known as “Special Purpose Vehicle Entity”, simply referred to as SPV, a new economic collaboration platform that connects corporates with homogenous needs, competencies

The consortium consists of five rubber sector companies namely, Jafferjee Brothers Exports (Pvt) Ltd, Polymer Products Impex (Pvt) Ltd, Sinwa Holdings (Ltd), Textrip (Pvt) Ltd and Microcells (Pvt) Ltd.

‘Lanka Rubber Global Consortium’ in addition to encouraging the collective strength channeling among the Sri Lankan rubber sector manufactures, raises the bar of ‘operational excellence’ in the Sri Lankan rubber sector by allowing the local brands to benchmark with the global standards and industry best practices, which

ultimately enhances the status of the Rubber industry in the country, she said.

The goal of the consortium is to strengthen the rubber value chain which would result in building a global brand for Sri Lankan rubber products and to become a dynamic one-stop shop for all buyers, investors and other interested stakeholders.

Lanka Rubber Global Consortium’s main activities would be to collaboratively improve export competitiveness of rubber products by jointly setting up of a finite element analysis center, joint venture manufacturing, building forward and backward linkages in the rubber value chain, joint product development and R & D facilities which result in improving the overall growth of the entire rubber value chain.