The adhesive industry plays a crucial role in a variety of allied industries such as footwear and lately even SMEs due to its value addition role.
The Department of Commerce (DoC) of Ministry of Industry and Commerce is now studying ways to assist the cross-cutting Sri Lankan adhesive industry from cheaper import substitutes.
“There seems to be unfair competition faced by the local adhesive industry due to the influx of low quality adhesives from other countries at reduced duties,” said P.D. Fernando, Director General of Commerce recently.
Fernando said this in the aftermath of his meeting with an adhesive industry delegation from the National Chamber of Commerce (NCC) of Sri Lanka on 27 June. The delegation informed Director General of Commerce (DGC) that the import duty for adhesive from India and Pakistan are zero per cent while the duties on imports from other countries are around 15 per cent.
“This low duty regime has created an unfair competition in the domestic adhesive industry,” he said.
Thousands are employed (directly and indirectly) in this industry and the Lankan footwear sector is strongly dependent on the adhesives. Among the manufacturing firms engaged are Sinwa Industries, Edna Refineries Ltd., Antler Trading, Harrisons Chemicals, Agra Chemicals, S-Lon Lanka, Ceylon Carbon Paper, Vortex Industries and Abesinghe Industries.
The synthetic rubber based adhesives sector, with high tech knowhow, now produces Polychloroprene (CR) adhesives, in accordance with international quality standards.
“We supply about 60% of the Lankan adhesive requirements mainly to the footwear, furniture and other allied industries,” said Naider Cader of Sinwa Industries and President of the Sri Lanka Adhesive Industry Association.
“We want the DGC to convince the policy makers and to charge a cess for imported adhesive so that local industry will have a fair competition as against the present unfair competition.
The local adhesive industry was started in 1960s and performing well until the recent past and the reduced import duty introduced lately has adversely affected the industry.”
The delegation also pointed out that Sri Lanka had been exporting adhesives in the past but due to the import duty reduction, the industry was presently struggling to survive.
Cader’s firm ‘Sinwa’ is well known for rubber-based footwear, which has lately diversified into the manufacture of industrial and consumer adhesives.
The adhesive industry delegation, accompanied by E.M. Wijethilleke, Secretary General of NCC, requested the support of the DGC especially in deciding tariff for high quality products that are successfully manufactured within the country so that the local industry could survive and help to save foreign exchange which is otherwise spent on low quality imports.
Fernando pledged to take up the issue with the policymakers to look after the industry with fair practices and thanked the National Chamber of Commerce of Sri Lanka for bringing up genuine issues so that the Department could actively engage in promoting the local industry.
“The chambers should highlight problems of this nature for the betterment of the local industry,” he added.