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Serving Sri Lanka

This web log is a news and views blog. The primary aim is to provide an avenue for the expression and collection of ideas on sustainable, fair, and just, grassroot level development. Some of the topics that the blog will specifically address are: poverty reduction, rural development, educational issues, social empowerment, post-Tsunami relief and reconstruction, livelihood development, environmental conservation and bio-diversity. 

Tuesday, April 11, 2006

Airport and Aviation Services bars Sri Lankan products displayed at the only International Airport

Asian Tribune: 22/03/2006" By Q Perera

Sri Lanka is one country where its government is not helping the local industry, but the help is limited only to lip service and towards these dealings, the activities of those government agencies are neither just nor transparent.

This was revealed at a press briefing held at the World Trade Centre recently, arranged by the Ceylon National Chamber of Industries to explain the circumstances that led to the refusal of displaying and sales facilities for Sri Lankan products at the Bandaranaike International Airport. In these manner Sri Lankan manufacturers of confectionery, cosmetics and tobacco products are not allowed at the Airport by the Airport and Aviation Services (Sri Lanka) Ltd.

On the persuasions Export Development Board, AASL has agreed to allow EDB only 308 sq ft at an unimportant area in the Airport terminal. EDB after a long process selected 12 SL Manufacturers to display their range of products at the Airport.

The proposal for Export Promotion Display/Sales Centre at Katunayake International Airport was initiated in September 2004 by the National Centre for Economic Development, Export Cluster that is headed by Dr P B Jayasundara, Secretary to the Treasury. The proposal was subsequently adopted as a budget proposal of the year 2005 Budget and the stakeholders would be the Sri Lanka Export Development Board and the local manufacturers and exporters.

Despite many requests by the NCED and several meetings by NCED members and EDB with Airport and Aviation Services (Sri Lanka) Ltd, only 308 sq ft were allocated by the AASSL to the EDB. That too was on the ground floor opposite the old departure gates that were not frequently used by the passengers. Although the EDB tried hard they failed to obtain additional or appropriate space for this project, from AASSL.

Therefore, in the late December 2005, EDB advertised the display centre at the Airport and called for interested exporters to apply. After many interviews with interested manufacturers, 12 were selected to display their range of products at the above centre.

After the selection of the 12 Sri Lankan manufacturers, AASSL by their letter No.CP/1004/58/TR dated 17th February 2006, informed EDB that Tobacco products, all confectionery items such as biscuits, chocolates etc and cosmetics will not be permitted to be displayed at the above centre.

By this stricture of the AASL , four leading Sri Lankan manufacturing companies which are involved in a tremendous volume of export trade to a large number of countries were affected. They are Ceylon Biscuits Group manufacturers of biscuits, chocolates, cakes, organic dehydrated fruits and juices etc; Multichemi International Ltd, manufacturers of herbal cosmetics and detergents; Link Natural Products (Pvt) Ltd, manufacturers of herbal healthcare, ayurvedic pharmaceuticals and wellness and Thansher’s & Co, manufacturers of cigars.

EDB informed this to the respective manufacturers on the 24th February 2006 by their letter 4/13/218 and EDB was pressurized by AASSL to sign the agreement with them excluding the above manufacturers.

Samantha Kumarasinghe, Chairman, Multichemi Group expressing the Sri Lankan manufacturers’ disgust and displeasure over the attitudes of some of the state officials said the Airport is the gateway to the country for foreigners and to promote the country’s products they must have to be displayed at this gateway. Though all other countries have done this, Sri Lanka has failed to take advantage of this.

He said that though for 12 Sri Lankan producers has been allotted only a meagre 300 sq ft, the authorities have allowed a trading company dealing with garments as much as 1,500 sq ft and he said "There is absolutely no justice and transparency".

He said that 150 manufacturing companies have applied to get a place within this 308 sq ft and out of them the 12 companies have been selected. He said that the possible reason for not allowing the products of these four companies could be adduced to an agreement entered into by the authorities with a foreign company some years ago and the agreement would be due to be renewed shortly.

Kumaraisnghe said the attitude of some of the bureaucrats involved appear to be questionable and highly detrimental to the progress of local industry. Therefore the attitudes of these unpatriotic elements in the state agencies must have to be investigated and if found guilty should have to be severely dealt with.

He said that though successive governments have been proclaiming that they have been helping the local industrialists, essential assistance was not forthcoming. He said that the present President too has proclaimed that his government would help the local industry; the claim has yet to be proved.

He said it is a great pity that the achievements of Sri Lankan industrialists are ignored by their own government, and said "In Sri Lanka there are places exclusively to cater foreigners even now, like casinos, but in Japan there are places exclusively cater only the Japanese."

Thasneem Lafir, Director, Thansher’s & Co said that in most countries there are stringent restrictions imposed for imports while their exports are well advertised. But in Sri Lanka it is the other way about. He said their product too is exported to many countries and has won international awards.

Jude Rubera, Export Manager, Ceylon Biscuits Group said they are the market leader with a 60 percent share of the market in the country and theirs are globally accepted brands exported to more than 36 countries around the world. He said that they are not looking at a big volume of business at the Airport, but to portray a proud Sri Lankan product which would bring in more and more business to our products in foreign countries.

The aggrieved Sri Lankan manufacturing companies indicated that the country’s International Airport should not only be a source of revenue to the Government and a service to the passengers, but also a window for the country’s quality products.

They have noted that unfortunately, the short sighted agreement signed by AASSL with a foreign duty free operator prohibits the selling of local products that is in competition with the duty free imported items. The lease agreement of the duty free operator is up for renewal but they understood that this operator is to be given the right to operate the duty free complex indefinitely. These companies have also applied individually for space to sell their products, but they have not received any positive response from AASSL. As they have seen new shops were sprouting out in the meantime, they were questioning the transparency in the allocation of these shop spaces.

These companies lament, it is a serious injustice done to Sri Lanka and Sri Lankan industry considering the huge sums of investment and employment generated by these companies directly and indirectly.

They also indicated that they understood that one duty free operator at the Airport is misleading the consumers by selling biscuits and nuts in packets depicting local scenes like tea gardens, Kandyan drummers, elephants and prominently displaying "Sri Lanka" on the front panel. The Sri Lankan image is used to sell biscuits made in other countries and Macadamia nuts, which are not indigenous to Sri Lanka.

These companies cried "This is our country land we vehemently object to the manner in which the EDB, Sri Lankan manufacturers and their products have been treated by the Airport and Aviation Services (Sri Lanka) Ltd".

They pointed out that the annual turnover of the Duty Free Complex is estimated to be over billions of rupees. The mark-up of duty-free products are said to be 300 – 400 percent. Employment is low in this operation but the profit is colossal. A modest estimate of 50 percent profit would net a few billions of rupees. If run by the government or Sri Lankan industrialists this could greatly defray a large part of the cost of some of the projects envisaged in the "Mahinda shinthana".

Even otherwise, if operated by Sri Lankans, the profit is taxable and will remain in the country, Surely, Sri Lankans can run a retail unit and these companies suggested that Sri Lankan manufacturers be selected on tenders for management and administration, so that colossal profit will rightly come back to the Government, who had incurred heavy expenditure on upgrading the airport.

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