The value addition levels of Sri Lanka ’s 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, said the Minister of Industry & Commerce Rishad Bathiudeen.
This is in par with Ireland and Finland and closely behind France and Japan in terms of World Bank’s export value index, he added.
Minister Bathiudeen was addressing the CMA Management Accounting Summit 2012 at Taj Samudra Hotel on the eve of 21 June.
Detailing the progress of value addition in Sri Lanka ’s exports, Minister Bathiudeen said: this positive trend is further strengthened by the 2012 budget proposals by President Mahinda Rajapaksa, 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, he said.
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, the Minister said.
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, the Minister stated.
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, the Minister said.
Explaining the importance of apparel success to rest of the exports, Minister 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.