Global-regional supply chain battles, an opportunity for Lanka – BOI DG | Sunday Observer

Global-regional supply chain battles, an opportunity for Lanka – BOI DG

31 May, 2020
(BOI) Sanjaya Mohottala
(BOI) Sanjaya Mohottala

The conceptual battle of the global supply chain model versus a regional supply chain model is reaching new heights creating more opportunities for Sri Lanka, Director General of the Board of Investments (BOI) Sanjaya Mohottala said in an interview with Sunday Observer Business.

“Of course we are going after these investment opportunities. However, we must always remember that companies which are looking at India as their supply base, for a 1.3 billion population, are different from somebody looking at us. In Sri Lanka, predominantly, we have an export-oriented company set up,” Mohottala explained, comparing the two neighbouring countries.

“Within that framework, we are also attempting to attract some companies who are looking for a different regional supply chain model. Sri Lanka has a good advantage as we can work with all the SAARC countries very openly and collaborate with everyone,” he said.

Therefore, in the wake of high competition among nations to win new opportunities during the realignment of the global supply chain, Sri Lanka is racing with several advantages in hand, the BOI officer thinks.

About four decades ago when export-oriented industries were set up in Sri Lanka, one key incentive for the investors was the cheap labour. However, currently, there are several countries in the region where labour is cheaper than Sri Lanka. In this backdrop, it is widely expressed that Sri Lanka is in need of absorbing more skilled labour for industries, especially which are export-oriented. However, Mohottala who has a strong track record in shipping, logistics and transportation, believes that labour is still a key strength Sri Lanka possesses.

“Our labour is still attractive compared to most other countries. Productivity and loyalty of our labour force are maybe the main reasons for that. But in terms of our efforts to move on to a knowledge-based economy, we have to upskill some of our labour force,” he said.

The BOI also focuses on more labour participation with gender inclusiveness. Sixty-two percent of BOI factories are now located in four districts, Colombo, Gampaha, Kalutara and Puttalam and it now eyes on expanding these industries into more areas. 

The BOI official also showed possibilities of developing seafood, aquaculture, advanced agrotechnology, and even medical tourism as industries to reap more benefits soon.

“We need to think about how to build a couple of pillars aiming billion dollars of exports in the next five-six years,” he said.

According to the global Doing Business Ranking – lack of institutional support (Registering property/ Getting credit/ Paying taxes/ Enforcing contracts) is a key reason for the bad performance of Sri Lanka in the list, compared to other south-east Asian nations.

“It is indeed a challenge for some of the investors. As the BOI, we are trying to smoothen some of those difficulties for investors who are within our zones. And I think as the progressive policies come along we will try to move along with that,” he said.During the pandemic, BOI industries faced a severe downfall of businesses as USD 5 billion out of the 11 billion annual export revenue is from apparel. However, 92 per cent of BOI factories are back to work with 65 percent of their labour force at present. Yet, they (BOI factories) have had to diversify their usual business and to seek timely opportunities such as manufacturing PPE and other healthcare products.