Sri Lanka is planning to reduce the dependency its exports sector has on the EU and USA market by finding new markets in the longer run, the Export Development Board (EDB) said.

The Chairman of the Export Development Board Janaka Ratnayake speaking to news360.lk said as of now the EU and USA market absorb 61% of our exports.

Ratnayake said this will be reduced to 50% by the year 2015 by concentrating more on markets such as China and India which the economies are growing.

The EDB Chairman expects the country’s exports earnings to hit US$ 8 billion this year supported by the seasonal growth expected during the 4th quarter.

He stated that although the exports of garments and fisheries products to the EU region have declined during this year, the other exports to the region are performing well.

Following is the interview carried out by news360.lk :

Q) Our exports have grown by around 12% up to September this year, is the growth adequate?

As you are aware our export sector experienced a severe setback in 2009 due to adverse impact of the world economic downturn.

In this context the present growth recorded by the sector during the first nine months of 2010 is encouraging. Normally our exports experience a seasonal increase in the 4th quarter of a year and this year too we expect the same trend to continue.

Q) Where do you think the growth curve will end up by the end of this year?

We have set an export target of US$ 8038 millions for 2010. Presently tea, natural rubber, spices, coconut fiber based products, diamonds, rubber products and some other industrial products are performing well. During the last quarter of 2010 we expect export of garments also to improve considering its seasonal trend. So we are confident that we can reach the export target set for this year.

Q) We have lost the GSP+ status and the latest data show a drop, your views?

Sri Lanka’s exports to the EU region declined by 9.4% during 2009 while it dropped by a slower rate of 1.3% during the period January – August 2010. Except garments and fisheries products the other exports to the region are performing well. So we believe that exports to the region will regain its growth momentum achieved in the past.

Q) Talking on the long term, how are you planning to build our export sector during the next 2 to 3 year period?

The EDB has formulated its Strategic Plan for the next five year period. I.e. 2011-2015. The vision of the EDB is “to be the most sought after destination of global sourcing in identified product sectors”. Accordingly we have identified seven key product sectors to concentrate our energies and resources during the plan period. In order to achieve the expected targets of these sectors we have planned to implement an aggressive market promotion campaign coupled with an effective communication strategy in key and emerging markets. An integrated supply / product / quality development programme will also be launched to enhance the supply chain efficiency of the product sectors. An effective trade facilitation programme will also be carried out to reduce transaction cost and thereby enhance the competitiveness of our products and services.

Q) Which sectors have the most potential apart from sectors such as tea and garments etc.?

Apart from tea and garments we have identified rubber and rubber products, diamonds, gem & jewellery, ICT / BPO / KPO, food & beverages and spices and allied products as key sectors. In addition, fish & fishery, coconut based products, electrical & electronics, petroleum products, printing & stationery, boats, lifestyle products and professional services have been identified as emerging sectors.

Q) We have been taking big about the exports of “spices” specially the cinnamon, have we made progress?

The spice sector experienced a setback in 2009 and improved significantly during the first eight months of 2010 by registering a growth rate of 75%. The major products i.e. pepper cloves and nutmeg & mace recorded over one fold increase during this period while pepper grew marginally by 1%. Considering the high demand for “Ceylon Cinnamon” in the international market we have planned to launch a “Ceylon Cinnamon” national branding programme to differentiate our product and to obtain a premium price.

Q.) Apart from EU / USA are we focusing on any other markets to send our items?

While consolidating our position in these markets we expect to diversify into emerging markets such as Eastern Europe, CIS countries and Middle East countries. Special emphasis has also been paid to promote trade with the Asian region specially with the high performing Asian nations i.e. China & India. At present 61% of our exports are absorbed by the USA and EU. We expect to reduce the dependency on these two markets to 50% by 2015.

Q) What steps the EDB / Government has taken towards helping exporters?

The Government has offered a package of fiscal incentives to Sri Lankan exporters which includes income tax concessions, exemption of duties & other levies and deferment facility for VAT enabling them to be competitive in the global market.

As the apex state organization responsible for promotion and development of exports from Sri Lanka, the EDB implements a range of programmes i.e. integrated supply / market development programme, market promotion programme, provision of information and e-commerce services, trade facilitation regional export development programmes for the benefit of the export sector.

Q) Do you think the upcoming budget will bring concessions to exporters?

The Government has identified the exports as a thrust area for development. The “Mahinda Chintana”, policy document too highlighted the importance of the sector. After experiencing a difficult period the sector has now started to recover. They need Government assistance to consolidate their position in the international market which is fiercely competitive. Therefore, we are confident that this business friendly Government will extend support to our exporters who bring valuable foreign exchange to the country.

Q) Any other message?

In line with the new strategic approach of the EDB, we are targeting an export turnover of US$ 15 billion by 2015.

Considering the growth momentum achieved by the sector in the past, this is an achievable target, but it needs a concerted effort of all stakeholders. So we request all stakeholders to work towards achieving this target.