Lanka Rubber Global Consortium debuts to boost exports

A unique Lanka Rubber Global Consortium was launched yesterday to boost the industry’s exports under a groundbreaking multi-stakeholder initiative. 

Incorporated as a Special Purpose Vehicle (SPV), the consortium aims to engage collaboratively in business activities pertaining to value chain development and supply chain management processes in polymer and allied industries, with a view to remain competitive in global markets in a sustainable manner. 

For the first time, the consortium has brought together rubber sector manufacturers, exporters, the Exports Development Board (EDB), the Asian Development Bank (ADB), rubber sector consultants from local and foreign domains, and many other stakeholders around a single entity.

The SPV as a small and medium-sized enterprise (SME) cluster is a widely adopted mechanism across the global context. 

The consortium consists of five rubber sector companies, namely, Jafferjee Brothers Exports Ltd, Polymer Products Impex Ltd, Sinwa Holdings, Textrip Ltd. and Microcells Ltd.

In addition to encouraging collective strength channelling among Sri Lankan rubber sector manufacturers, the consortium raises the bar of operational excellence in the Sri Lankan rubber sector by enabling local brands to benchmark with global standards and industry best practices, which ultimately enhances the status of the rubber industry in the country.

The consortium’s office will be operational from the EDB building and a Memorandum of Understanding (MoU) has been signed between EDB and the consortium. The office was ceremoniously opened yesterday. 

The goal of the consortium is to strengthen the rubber value chain, which would result in building a global brand for Sri Lankan rubber products, and to become a dynamic one-stop shop for all buyers, investors and other interested stakeholders. The Lanka Rubber Global Consortium’s main activities would be to collaboratively improve export competitiveness of rubber products by jointly setting up a finite element analysis centre, joint venture manufacturing, building forward and backward linkages in the rubber value chain, joint product development and R&D facilities, which result in improving the overall growth of the entire rubber value chain.

The consortium’s vision is to make local brands more competitive in the global arena, as this would help to drive the country towards a highly competitive export-oriented economy. 

The idea of a consortium originated when EDB, in collaboration with ADB, carried out a study showing that most companies in the industry are SMEs, and identified issues being encountered by such companies in their value chains. 

One of the issues identified by the study was that SMEs are, individually, in a weak position to address some common issues prevailing in the value chain. Therefore, it was proposed that a collective effort might bring solutions which could be executed through the Cluster Development and Financing approach accepted worldwide. The consortium was born of the adoption of a ‘Collaborate to compete’ theme that connects corporates with homogenous needs, competencies and business interests, with the aim of mutual prosperity.

EDB said the rubber product sector has been identified as a trust industry, which has the potential to contribute markedly to export revenue and has established a reputation for quality and reliability. Sri Lanka produces a wide variety of value-added rubber products from both latex and dry rubber, such as solid tyres, latex gloves, rubber bands, extrusions, beadings, mats, and miscellaneous sports goods by processing raw rubber for exports.

The rubber products industry is a key sector, contributing 6.9% to exports in 2016. The major markets are the US, Germany, Belgium, Italy, Canada, the UK and Brazil. Sri Lanka supplies to major international brands such as Continental, Solideal, Wonder Grip, Mapa, and Safety Work, Tesco. Companies in the rubber industry use state-of-the-art technologies in manufacturing the above international brands. 

The tyre sector accounts for the largest share of turnover (60%) of rubber exports, including solid tyres, pneumatic tyres, bicycle tyres, three wheeler tyres, and a variety of smaller tyre categories. Currently Sri Lanka is considered as the global leader in solid tyres, accounting for over 20% of the global demand, and rubber gloves, catering to over 7% of the global demand.

EDB said it has implemented several programs to assist the rubber industry in the past years, such as System Development Program to obtain ISO 14001 and 50001 certifications, Technical Training and Exposure programs in UK and Malaysia, Financial Schemes to obtain relevant certifications and testing not available in Sri Lanka, trade fair participation and B2B meetings in several countries.