Sri Lanka’s ceramic industry is facing a severe threat of losing the European market for its tableware, sanitary ware, hotel and ornamental ware if the EU decides to finally withdraw the GSP + facility, according to Sunil Wijesinha, Chairman of tableware exporter Dankotuwa Porcelain and former head of the Ceramics Council.
He told the Business Times that his company with 1100 workers will be badly hit by the decision at a time when there is strong competition from Bangladesh, a new entrant to the porcelain industry with Sri Lankan knowhow, moulds and expertise as the latter would get the orders Sri Lanka might lose if duty free access to European Union markets is withdrawn.
The EU has announced a withdrawal of the GSP+ concession by July/August if Sri Lanka doesn’t show any improvement in adhering to UN conventions on human and labour rights.
Mr Wijesinha said without the GSP+ facility, prices of local products will increase and this industry would lose markets. Sri Lanka exports ceramics worth US $ 42 million annually and no GSP+ means Sri Lanka's three main ceramic manufacturers would be unable to secure orders due to the pricing factor.
Around 2,500 workers are currently serving in three companies manufacture tableware - Noritake, Dankotuwa and Fernwood – in which 80 % of the produce is for export.
Noritake exports to the USA whereas Dankotuwa and Fernwood export to the European market, he said. Of this Dankotuwa Porcelain is facing another problem – a human resource productivity issue as most of the 1100-strong work force is close to retirement age. These employees have served the company for around 26 or 27 years, from the inception of the factory as a state owned entity, he added.
“At the moment we have to manage with the present staff paying high salaries without making new recruitments. The company is also paying the cost of living allowance calculated at current rate and normally a skilled worker is drawing a salary of Rs. 20,000 with this allowance,” he said, expressing concern about the future of the business.
"Ceramics is a very high energy consuming industry and an additional burden particularly at this time, when markets have contracted, is unbearable," said Mr Wijesinha. |
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