Value addition power of Sri Lanka exports is on par with that of Ireland and Finland and far behind France and Japan, the Ministry of Industry and Commerce said.
"The value addition levels of our exports have increased to 153 points in 2010 compared to the value of 100 points in base year 2000, showing a 53% increase in value addition in a 10 year period. This is in par with Ireland and Finland and closely behind France and Japan in terms of World Bank’s export value index," revealed Rishad Bathiudeen, Minister of Industry and Commerce addressing the CMA Management Accounting Summit 2012 at Taj Samudra Hotel earlier this week.
The SAFA-CMA International Management Accounting Summit 2012 is held on the theme ‘Sustainability and Corporate Responsibility’ and is attended by all professional accounting bodies in India, Pakistan, Bangladesh, Sri Lanka, Nepal, Maldives and Bhutan. Technical Sessions of the summit are to continue on 22 & 23 June. During the inauguration event, the first ever Tamil translation of CMA study pack was handed over to Minister Bathiudeen by Trichy (in India) based accountant Mr Selva Kumar. The Tamil study pack is an initiative by CMA Sri Lanka to popularise management accountancy among Tamil language students of Sri Lanka.
Detailing the progress of value addition in our exports, Minister Bathiudeen said: "According to the World Bank, value addition levels of our exports have increased to 153 points in 2010 compared to the value of 100 points in base year 2000, showing a 53% increase in value addition in a 10 year period. This is in par with Ireland and Finland and closely behind France and Japan in terms of export value index. This positive trend is further strengthened by the 2012 budget proposals, encouraging value addition in a significant way by discouraging export of several materials in raw form such as raw rubber, natural graphite, clay, sand and even timber logs.
"Also, extending of various tax incentives for value added manufacturing investments, and research and development, during the same budget, enhanced our national value addition efforts considerably. Among other leading value addition steps are the Tea Promotion and Marketing Fund for value addition on Pure Ceylon Tea, increasing research on rubber technologies for rubber value addition, setting a new aim of 3,650 million coconuts by 2016 along with value added production of coconut cream and milk powder, and the Department of Export Agriculture’s new measures to increase replanting and new planting activities of export agricultural crops such as cinnamon and pepper.
"Further, the new budget proposals of exports with a domestic value addition of more than 65 percent, with local patent rights, to be taxed only at a maximum rate of 10 per cent annually should be highlighted here. All these initiatives are expected to strongly contribute to our exports. Our export sector grew 21 percent despite the global economic downturn in 2010. The momentum improved further in 2011 by growth rate of 23 percent. The industrial exports which accounted for 72 percent of the total export earnings grew by 28 percent.
"I am also pleased to inform that the revised Industrial Production Index of Sri Lanka has begun to show with more clarity of emerging structural changes in the industrial sector giving a better understanding of value addition. For example, the share of the apparel industry in the revised Industrial Production Index has increased to 24 per cent from 22.7 per cent, showing increased value addition in the apparel industry."
Explaining the importance of apparel success to rest of the exports, Bathiudeen said: "Our apparel industry is viable model that shows how value addition was successful. Apparel is the major export item from Sri Lanka with 295.5 Million dollars export in April this year. Earnings from merchandize exports thereafter rose to $ 10.5 Bn in 2011 from $ 8.6 Bn 2010, surpassing the $ 9.1 Bn export target for 2011."