Tsunami-hit entrepreneurs back in business
Eleven tsunami ravaged entrepreneurs from the Southern Province managed to secure Rs. 1.64 million worth of orders at the recently concluded Small-and Medium- Enterprises (SME) Machinery Fair organised by the Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) SME development (SMED) project.
"A core competency of the Back to Business program is its focus in helping our entrepreneurs to find potential markets. We don’t merely dole out grants or equipment and provide technical assistance. The success of the program has relied on its end-to-end, holistic approach, where we assist entrepreneurs to build up their livelihoods and find and establish markets for their products," Back to Business Program Director Sam Stembo said.
The fair showcased the talents of 11 Back to Business enterprises in the manufacturing sector. Dhammika Wickramaratna, the proprietor of Dhammika Auto Light had invented his own laser mould production machine and light manufacturing machine.
This rural youth from Matara had started working at the Ceylon Electrical Company in the mid-1980s for a daily wage of Rs. 14. However, he diligently learnt the relevant technology and went back to his home town to establish his own business of making lighting cups for three-wheelers and motor bikes. His homegrown business expanded as the proprietor designed and manufactured his own casting and mould making machine. However, he lost his machinery and the business in the Boxing Day tragedy.
"I lost all my machines except one. However, I started my business with that and I have progressed. I am willing to share my technology with others so that they can also build their own home-based enterprises. The SME Fair has given me a chance to link up with corporate bodies, which are not only willing to buy my products, but who would also help me to improve my technology as well," he said.
Nipuna Products of Weligama have also invented a fibreglass alternative to commonly used street lamps. The energy efficient, low cost design uses only one tenth of the electricity used by a normal street lamp, has a longer life span and is low on maintenance. He has also designed and produced all the machinery required for his production line. Nipuna Street Lamps have now been deployed in the Weligama District Council area and the Matara Municipal Council area.
"I have been looking for funding to expand my services. If this low cost solution is adopted by municipal councils islandwide, it will drastically reduce the power usage. TheFair allowed me to bring it to the notice of the Enterprise Development and Investment Promotion Minister’s notice, who has evinced a keen interest in it," the proprietor A.G.D. Jayasekera said.
Sithru Fibre Glass Ltd., an ornament manufacturer based in Thissamaharamaya, secured orders amounting to Rs. 300,000 at the Fair itself. "It is difficult to showcase our products to the urban clientele due to logistical limitations. However, a Fair of this nature has helped to bring us out of our rural enclaves and given us the required exposure in potential markets," proprietor T.V.K .Chamila Sanjeewa said.
Teledrama portrays post-tsunami conflict challenges
A new teledrama is set for debut this week on Derana TV, vividly portraying the challenges of conflict and reconciliation in post-tsunami Sri Lanka.
‘The East is Calling’ is directed by renowned film maker Asoka Handagama and produced by Young Asia Television (YATV). It is funded by the U.S. Agency for International Development (USAID), the US Embassy said in a statement yesterday.
On Monday, representatives of USAID, YATV, and Mr. Handagama gathered at the Lakshman Kadirgamar Institute for International Relations to launch the series, which will debut in the Friday 9:30 slot in October, as the signature teledrama of the new Derana television network.
‘The East is Calling’ delivers a fundamental message that respect for one another’s feelings will lead to peaceful coexistence, in a dramatic and entertaining way,” said USAID Mission Director, Rebecca Cohn at the inauguration.“It takes an unflinching look at the challenges faced by Sri Lankan society that is sure to provoke discussion and dialogue leading toward reconciliation of these issues.”
As the 13-episode series begins, a recent medical graduate and some friends had travelled East on a beach trip. The doctor and a friend leave the group to purchase supplies. On the way, they receive a call from their friends who say the sea has strangely receded, before the line abruptly goes dead.
The tsunami has struck; taking away their friends and bringing longstanding inter-ethnic issues into sharp focus as survivors struggle to rebuild their shattered lives.
The doctor lends his medical skills to a makeshift camp at a nearby temple, where Sinhalese, Tamils, and Muslims have sought refuge, sharing the limited space and resources and coming to terms with the tragedy. The communities are united at first, but relations gradually become tense, leading to suspicion, mistrust and jealousies. In the end, community leaders emerge to ease the tension, and the series ends on a note of hope.
In 2004, USAID also funded the award-winning series “Take This Road,” another YATV production directed by Mr. Handagama, which was watched by nearly four million Sri Lankans.
Sri Lanka loses Rs. 9 billion annually in post-harvest losses
Sri Lanka loses Rs. 9 billion annually as a result of poor storage and transport practices for agricultural produce.
This fact was revealed through a study conducted by the Post Harvest Technology Institute.
The chairman of the Institute, N.V.T.A. Veragoda, said that the losses are as high as 10-15% of the total paddy harvest and 30-40% of the country's fruit harvest.
The main reason for such huge losses is ignorance among producers, transporters and retailers, the survey said. In response, the Post Harvest Technology Institute says it will initiate a programme to popularise the use of safer sacks to store paddy and plastic baskets for fruits and vegetables.
Vibrant natural rubber policy is an urgent need
The rubber industry of the country, like all other NR producing countries, is currently enjoying a bonanza in the form of record rubber prices, although the rubber products sector in particular the medium and small scale industries are in a state of confusion. The factors that contributed to the unprecedented rise in the prices are quite well known and have been discussed in details in previous articles. The key factor being the extent of the demand-supply gap. Both the demand and supply depend on large number of factors, many of which are easy to identify.
Increased output resulting from favourable weather and political stability in leading rubber producing countries and revival of abandoned rubber plantings due continued high prices and on the demand side, slowing down of the GDP growth following sharp rises in oil prices and related aspects are some aspects that are bound to have an impact on the long term stability of rubber prices.
The NR shock may also promote the tendency of NR consuming countries to go for more and more SR in place of the high-cost NR component in their products and the growing demand for reclaimed rubber and the hunt for alternatives to NR are also matters of great concern for NR producers.
Alternatives to NR
Triggered by the unprecedented NR price rise, hunt for alternatives to NR has gained a renewed vigour across the rubber consuming countries in the world. In fact attempts are being made to retrace the trails of past developments on a variety of plants and shrubs, known to have rubber content in them, which may serve as economically viable natural alternatives to the Hevea brasiliensis (Rubber tree)
In the hunt for NR alternatives, it had been the desert shrub Guayule that came to the centre stage in the wake of NR short supply, whenever it happens. The major hurdle in the way of its commercial exploitation had been the comparatively higher processing costs and cheaper availability of NR. But it appears that the situation has changed today with the NR prices sky-rocketing and creating shock waves in the global rubber industry. It is believed that Guayule has also the distinct advantages of not having any protein allergy problem and many products like tyres can also be made out it.
Another potential alternative is an annual plant, Taraxacum kok-saghyz or Russian dandelion, conveniently known as TKS. This plant, TKS, has the latex sap in its roots and can be densely cultivated. Harvesting the sap can be automated and the annual crop supply can be adjusted to demand, unlike the perennial tree Hevea. It is estimated that about one million pounds of rubber could be produced annually with 10,000 acres of TKS crop. The by products of the extraction is reported to be about 2.3 million gallons of ethanol, an alterative fuel that could be sold to offset the cost. In any case, it has been reported that it requires significant amount of agronomic work before commercialization. Sunflower and rubber producing tobacco plants are also emerging as potential challengers to NR.
National NR Policy
The foregoing discussion indicates the possibility of wide fluctuations in the price of NR, though it may not be in the near future. Sri Lanka, accounts for less than 2% of global production and supply of NR. Therefore, government’s ability to influence world prices is extremely difficult. Yet, there is much the government can do to safeguard the domestic rubber industry. One big question is; are we prepared for any violent fluctuations in prices and a repeat of the crisis that triggered the rubber price to fall to a 30 - year low in 1999. In Malaysia, under the 9th Malaysian Plan (9MP) launched recently, the Government has identified rubber as a strategic crop. Adequate replanting funds have been allocated to ensure that the annual replanting target is achieved. This, they believe is one way to prevent rubber prices from fluctuating too much. In, Sri Lanka, we have already seen latex crepe that was fetching Rs. 400/= per kg in forward sales in July this year, going down to about Rs. 215/= per kg in mid September.
The NR industry therefore needs a national dynamic policy to ensure it’s long term viability and to meet the growing demand of the domestic rubber products sector which is currently reeling under the NR shock. In Sri Lanka, the total rubber planted areas has declined from about 270,000 ha. in early 60’s to reach about 115,000 ha. in 2005. The rubber production that was in the region of 155,000 mt in 1978, also declined steadily to reach a level of about 90,000 mt in the mid 90’s. Although there has been an upward trend since 1993, the South East Asia financial crisis again exposed the weaknesses in our industry strategies, plans and operations. Nevertheless, with the economic recovery in Asia/Pacific and Asia once again emerging as a dynamic region, and NR prizes becoming very attractive, Sri Lanka’s rubber industry also showed signs of growth, recording a total production of 104,000 mt in year 2005 with a productivity of about 1000 kg/ha. From a global perspective, the problem with a perennial crop like rubber is that the supply cannot be regulated on annual basis according to changing market conditions. Sri Lanka should therefore, adopt a national rubber production policy. This should take into account all aspects linked to production like planting, harvesting, processing, manufacturing, marketing etc. The accepted National Rubber Production Policy should be strictly adopted by all those who are partners in the development of the Sri Lankan NR industry. The estate sector with about 30% of the rubber extent under their management should also fall in line.
One of the important strategies that should be adopted under this policy is to identify technologies for bridging the gap between the present national productivity level of about 1000 kg/ha and the achievable productivity level of about 2500 kg/ha/year and ensure adoption of such technologies by the estates as well as the smallholder sector.
First step in this strategy should be a national survey to identify the plantings/holdings with low productivity levels and also to identify the cause for low productivity in such plantings/holdings. These may be due to individual, organizational or technological deficiencies. Having identified these, the next step would be motivation and skills development/training and advisory services for effective adoption of modern, accepted production technologies, that are relevant to the identified needs for enhanced productivity.
The mature yields and harvest index may be increased by technologies related to exploitation. The advent of Ethephon as a yield stimulant has also enabled earlier exploitation of trees at girths smaller than conventional girths. A minimum of 50 cm was for long considered the norm before exploitation could commence. The current thinking is that commercial areas could be exploited at smaller girths provided adequate management input are supplied. In fact with controlled use of low concentration of ethephon, trees of a girth of 42 cm or over are being exploited economically in some countries. Exploitation devices such as “RRIMFLOW” effectively used in some countries can be used at least in low productivity rubber plantings until a firm policy on it’s use in Sri Lanka is worked out.
A policy of phased out national replanting programme should be formulated and strictly enforced. The estate sector is expected to follow an annual 3% replanting programme, but this does not happen. This sector has a huge backlog for replanting. As the prices are attractive, there is a tendency to prolong the replanting cycle. A 30-year span is considered as the economic life of a tree. Let us not deviate from this for short-term benefits. This is the time for the Government to enforce and encourage the growers to go for the much needed replanting. Planting materials with yield potential in the region of 2,500 to 3,000 kg/ha/yr are available in Sri Lanka. If these can replace the old trees, the average productivity can be raised from about 1000 kg/ha to about 2,500 kg/ha. Moreover, the newer clones are more vigorous in growth and tappability can be achieved 12 to 18 month earlier than was seen with older clones. Therefore, this should be considered as a national programme and adequate replanting funds allotted to cover the entire replanting cost and phased out replanting should be made mandatory.
The next important strategy needed in the national NR policy is the expansion of rubber cultivation in non-traditional areas since new areas suitable for successful rubber are no longer available in the traditional rubber growing tracts for large scale production. The potential replanting areas under some regional plantation company’s management have gone into oil palm. The Southern province has large extents of land with vast potential for rubber growing viz. the Moneragala, Bibile and Hambantota. The Moneragala Rubber Development Project that has already been set in motion aims at bringing 40,000 hectare unused and abandoned land under rubber cultivation based on smallholder farm model with private sector support, phased over a 10- year period. This is expected to provide additionally above 80,000 mt of rubber per year. Annual targets of 5,000 hectares that has been fixed requires sorting out of action plan and implementation to achieve targets. With the present extent of 115,000 ha, the planned planting of 40,000 ha in Moneragala brings the total extent to 155,000 ha by year 2016. Still, there is a deficit of about 115,000 ha if we are to regain our position of 270,000 ha in early 60’s, when Sri Lanka had been the 4th leading global rubber producer. We have long way to go from the present 9th position. Uneconomical Tea lands in the low and mid-country are also potential areas for rubber planting.
Skill Development /Training
The success of any business depends on productivity in all areas of its focus. Land and human productivity in rubber plantings/holdings depend heavily on new knowledge, technology and people skills. Technology adopted by our competitors change rapidly and skill levels of competing countries are quite high. In respect of productivity, India with similar agro-climatic conditions as in Sri Lanka occupies the leading position in global rubber productivity, productivity achieved in 2005-2006 being 1,796 kg/ha. The problem in Sri Lanka is lack of new knowledge, appropriate skills and application of modern technologies is a systematic manner. Therefore, there is a need to develop adequate mechanism to assess the skills requirement of the workforce, regularly. Adequate training opportunities will have to be provided in all sectors of the rubber industry and for all levels of skills to meet the development needs of the industry. Unfortunately, may of our policy makers and industrialists do not appear to give training the priority it deserves. Training is only given when there are spare resources. When business picks up, training takes a backseat. Training of human resources of all ages and discipline involved in rubber development must therefore be included as an integral part of the government’s national policy for rubber.
Let us hope and live in hope that the fortunes of both the rubber producers and consumers will not fluctuate aggressively and the current boom will continue and will not bust soon. An encouraging factor is “ Emerging Asia has once again been the world’s most dynamic region in early 2006 driven by buoyant China and India”, as said by an economic expert, recently.