World’s leader in car production opens new door for Sri Lanka rubber, tyres

Minister of Industry and Commerce Rishad Bathiudeen with Slovak Finance Minister Peter Kazimir on 28 March in Colombo

Sri Lanka’s rubber sector received a major opening from the world’s leader in car production, Slovakia, yesterday.

Slovakia has called for using Sri Lankan rubber – especially rubber tyres – in its record-setting car manufacturing industry.

“We want to diversify our rubber intake and to this end want to expand the sourcing from our present African and South East Asian suppliers,” said visiting Slovak Finance Minister Peter Kazimir on 28 March. Kazimir, who accompanied a nine-member official delegation, was in discussion with Minister of Industry and Commerce Rishad Bathiudeen during a courtesy call on the latter.

“As a result of post-Soviet era economic restructuring, Slovakia has become a manufacturing economy. 40% of our industrial exports are automotives. Well-established global brands such as KIA, Volkswagen, Jaguar Land Rover, Audi, and PSA Peugeot Citroen are now manufacturing in Slovakia at Tier One OEM level,” said Kazimir.

He added: “More than 400 Slovak SMEs too are part of our supply chain as second tier suppliers. Our automotive manufacturing industry has been rapidly developing and last year we became the world’s leading car producer. As a result, we are now working to diversify our industry supply sources. For example, we want to diversify our rubber intake and to this end expanding the sourcing from our present African and South East Asian suppliers. Tyre supplies are crucial for us. We want to expand this sourcing and are now keenly focusing on Sri Lankan rubber sector, especially tyres. We also wish to send our business delegations here and even ready to transfer our technical knowhow to Sri Lankan (automotive) industry if you wish. New supplies from Sri Lanka to Slovakia would also increase low level of our existing bilateral trade.”

Bilateral trade between Sri Lanka and Slovakia totalled a mere $ 45 million in 2017. Sri Lanka’s leading export to Slovakia in 2017 was apparel while machinery was the key import item to Sri Lanka from Slovakia. Last year Slovakia ascended to become the world’s leading car producer by making 191 car-units per 1,000 inhabitants. Its annual car output last year also surpassed the one million unit mark.

Bathiudeen welcomed Kazimir’s offers. “I welcome your interest on our rubber and tyres as well as technology transfer to our automotive sector-no doubt these measures will upgrade our manufacturing and even bilateral cooperation. Global demand for our high quality rubber continues to increase-even last year our rubber exports increased by 18% to $ 39 million from 2016’s $ 33 million. Therefore you are in the right location looking for high quality rubber and tyres for your automotive sector. The Ministry will extend its fullest cooperation when your business and investment delegations arrive here and will facilitate sectoral meetings,” he responded.

Kazimir also stressed their interest in investing in Sri Lanka and called for a bilateral investment protection and double tax avoidance mechanisms between both countries during the meeting.

Slovakia recently began expanding its car production to SUVs having launched production of the Porsche Cayenne in 2017. Slovak sources said the new generation of Volkswagen Touareg and Audi Q8 were other new SUVs lined up for production.