R&D vital to take food processing industry to the next level - Food Processors Association chief | Page 2 | Sunday Observer

R&D vital to take food processing industry to the next level - Food Processors Association chief

Sarath W. Alahakoon  Picture by Chaminda Niroshana
Sarath W. Alahakoon Picture by Chaminda Niroshana
  • EU concessions have helped the industry to move forward
  •  Vietnam emerging as a strong competitor
  • Climate change seriously affecting entire food industry

Sri Lanka’s food processing industry is progressing well given the economic situation of the country. The industry needs to have the right technology to move to the next level. Therefore, we need to improve on research and development to keep abreast of global trends, President, Sri Lanka Food Processors Association, Sarath W. Alahakoon said.

However, deploying technology alone is not sufficient for the industry to progress. It needs to go for modern machinery which enhances efficiency and productivity where output is dependent on innovation and sustainability, he said.

“We as a country should consider value addition in processed food and to give the consumer a better choice as this item of food has become a luxury for low the income segment,” he said in an interview with the Business Observer.

Excerpts:

Q. What is the present situation of the food processing industry?

A. The food processing industry is in a very healthy state. It comprises of small, medium and large entrepreneurs. There are plenty of opportunities even for the new comers where the large players provide a platform. The recently held ProFood Propack exhibition which showcased the abilities of the industry, was a huge success.

It recorded 100 percent participation and more than 20,000 visited the exhibition this year. It acted as a spring board to build linkages and B2B contacts for future business development. There was a good response from consumers and we are extremely satisfied with the outcome.

However, the food processing industry is grappling with the biggest problem of inconsistency in the way in which government policies are introduced and implemented.

Due to this we, as industrialists are in a confusing state of mind as to what will change in the next moment. We believe the changing of these policies should be done for the betterment of the consumers as well as the industry.

However, there is very little consultation and dialogue with the industry in making policy changes creating inefficiencies, losses to companies and confusion across the spectrum in terms of implementations, sometime threatening the operations of the industry.

We believe if there are discussions and consultations between the parties, we could have a better dialogue to enable effective policies for the industry.

The consumers are our market and we firmly believe in protecting them as it is also the thinking of the government. The policy makers who bring in regulations wants to look after the consumer interests, but we also want to protect them because the connection between the industry and the consumer is far reaching as they are our market one of the key factors that the existence of the industry is dependent upon.

Q. Where does the industry stand where exports are concerned?

A. The food processing industry spreads across a vast area. In certain sectors, exporters are doing very well. The European Union concessions have helped the industry to move forward.

However, the export market is very competitive. The countries such as Thailand, India and Philippines have a competitive edge over Sri Lanka as they used highly advanced technology.

Vietnam too is emerging as a strong competitor with regard to the processed food industry. In many instances, the export prices are lower than the local prices due to currency variation.

Sri Lanka needs to concentrate more on productivity and product innovation to penetrate the export market. The product scale is necessary where high quantities will gain the advantage of economies of scale. We should look at niche markets. There should be a good local foundation. However, it is fragile due to local taxes and not generating extra capital.

Q. What about production? Are you satisfied with the quantity produced?

A. There is room for innovation. What happens in Sri Lanka is mostly everything is being copied.

There is no originality. There is also this problem of inconsistency in the supply of raw materials. Therefore, this directly affects the processed food industry.

The other key issue is the disposable income of the consumers. Some think that processed food is a luxury as the commodity prices are high. They purchase the minimum requirement and will not go for processed food. This has resulted in fluctuating demand.

Q. What are the new technologies infused into the industry?

A. Food industry covers a huge area and processed food is a one component in the entire industry. The technology changes depending on the food item. However, there is the basic technology with regard to the industry. For example; the level of sugar that should be included in processed food.

For this, there is technology to measure the input of sugar and control the end product.

It is not advisable to reduce sugar levels to the bear minimum as we have malnutrition in the country, according to the World Bank. Therefore, sugar intake is necessary.

However, due to the prevalence of non-communicable diseases, new sweetening technology is emerging in the world.

Q. Are we thinking about the future in terms of technology usage?

A. The basic technology will continue to be used in the processed food industry. However, the use of preservatives will be changing to meet the current requirements in terms of regulations and health. Innovative technologies will be made use of in the industry in the future.

Q. How is the water availability affecting the food processing industry?

A. This is an unpredictable element. However, the industry manages to move forward. The scarcity of water affects the industry badly, but the success lies in the way you manage the problem.

Q. How serious the industry about climate change issues?

A. Climate change is seriously affecting the entire food industry, not only the processed food industry. Therefore, we need to tackle this problem collectively.

The rain patterns have changed as well as the food seasons have changed at present. The climate change is a very big concern for the food industry and the production of certain sectors of processed food has to be curtailed or stopped due to lack of produce.

Q. How is the present trend in people getting in to this industry?

A. The processed food industry which is a part of the entire food industry is open for anyone to come and start a business. This opening has provided the opportunity for many to come and stay in the industry making great strides in their path.

If you are passionate about what you do you will continue to do it despite the challenges and adversity you face. We see that a lot of talented people, especially females get in to the business and move forward.

However, one needs to have entrepreneurship skills and inspiration to be a success in whatever business you are venturing in to.

Q. What are the opportunities the industry offers for young people?

A. The field is open for any one to come and start a business. There are novel processed food items which are in demand at present such as dried jack fruit, mangoes and so on.

There is financial assistance for the upcoming entrepreneurs too. The government initiated Enterprise Sri Lanka program which has a major loan scheme to fund the entrepreneurs in supporting the emerging business community.

It is helping the SME sector in a big way. We also conduct educational and training programs for industrialists to create an awareness regarding the latest trends in the industry.

Q. What are the areas we should think over the next five years?

A. Our immediate concern is the fast changing regulatory framework which contains inconsistent policies. We are also mindful of the possible challenges and negative effects of the free trade agreements which are negotiating at present. These may pose a challenge to the processed food industry in the long term.

Q. What countries are we looking at when it comes to technology?

A. When it comes to technology, some countries do not like to share their technology fearing stiff competition. However, we purchase machinery mostly from European countries such as Germany, Italy and also from India, China and Malaysia.

Q. How do the government policies and the education system affecting the industry? Do you have any suggestions? What are they?

A. The government should get the industry professionals involved in policy matters regarding the processed food industry.

The policy formulation should be done with their suggestions and contributions as this will augur well for the industry. This will facilitate the industry to reach the next level of growth.

Q. In your opinion, what are the immediate challenges the industry face at present?

A. As mentioned the policy inconsistency is the major issue that the industry faced at present. The unpredictable immediate future of the industry is another problem. If we know that there will be a change in policies and adequate time is given then we could adjust ourselves. The ad-hoc policy changes will not benefit the industry and the consumers both. Therefore, careful consideration on this matter is important for the industry to move forward. The government needs to re-look at the high taxes that are imposed on the industry. There is no level playing field as the small timers do not pay high taxes as registered businesses. The industrialists who use local inputs need some tax benefits to encourage them further to source the supply locally.

Q. What is the way forward for the industry? What proactive measure should it take to reach the next level?

A. The industry should work on cost effective measures and be people sensitive. It needs to use appropriate technology to ensure better way of doing things. It is also necessary to go for more innovation. The government should encourage industrialists using local inputs and locally grown products that will have trickle down benefits in the economy. As research and development plays an important role in an industry growth, processed food industry needs to focus more on this area to take it to the next level. 

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