24 th annual general meeting a s lindustrialassociation.lk/documents/2014_ar1.pdf · 24th annual...

Industrial Association of Sri Lanka

Annual General Meeting24

Annual Report 2014

th

The Industrial Association of Sri Lanka Annual Report 2014/2015

1

THE INDUSTRIAL ASSOCIATION OF SRI LANKA

24TH Annual General MeetingThe Industrial Association of Sri Lanka

Notice is hereby given that the 24th Annual General Meeting of the Industrial Association of Sri Lanka will be held on Friday 25 September 2015 at 6.00 pm at the “Earls Court” Cinnamon Lakeside, Colombo 2, followed by cocktails.

AGENDA

1. Minutes To confirm the Minutes of the 23rd Annual General Meeting held on Friday 29th August 2014 at 6.00 pm at the “Cedar

Room”, Cinnamon Grand, Colombo 3.

2. Annual Report and Audited Statement of Accounts for the year 2014/2015 To consider and adopt the Annual Report and Accounts for the year ended 31 March 2015.

3. Address by the Chairman, Mr. Nilam Jayasinghe

4. Address by the Chief Guest Dr. Indrajit Coomaraswamy, Former Director – Economic Affairs Division, Commonwealth Secretariat

5. Election of Office Bearers for the Year 2015/2016 To elect the Chairman

6. Address by the Chairman Elect

7. Election of two Vice Chairmen and Executive Committee for the Year 2015/2016

8. Appointment of Auditors – 2015/2016

9. Any Other Business To consider any other business of which seven (07) days’ notice shall have been given.

10. Vote of Thanks

Rohan CasiechettyFor Secretary01 September 2015

The Industrial Association of Sri LankaAnnual Report 2014/2015

2

CONTENTS

Page No.

1. Notice and Agenda for the 24th Annual General Meeting

3. Our Mission, Vision and Values

4. “This is Us” – The Industrial Association of Sri Lanka

5. Office Bearers & Executive Committee 2014/2015

7. Members of the IASL

8. Chairman’s Review

9. Review of Activities

13. Minutes – 23rd Annual General Meeting

17. Financial Report

Inner Back Cover Association Information


3

To represent the industrial and manufacturing interests in Sri Lanka.

To act as a spokesperson for the Industrial Sector in its dealings with the

Government and other institutions both public and private.

With a mandate received from the members to assist policy makers in the

task of devising an industrial strategy for Sri Lanka.

To provide a focal point for industrialists to meet, discuss and solve issues

faced by industrialists.

To encourage quality consciousness in Industry.

Vision

Mission

Values


4

This is Us…….

“The Industrial Association of Sri Lanka”

The Industrial Association of Sri Lanka (IASL) is the apex body which represents industrial and manufacturing interests in Sri

Lanka. The Association was formed on 13 March 1991 and has contributed to represent a major sector of the manufacturing

and industrial concerns in Sri Lanka. The current membership of the IASL constitutes of well known industrial organizations in

Sri Lanka.

The IASL is a constituent body of the Ceylon Chamber of Commerce which is a Confederation of Trade Associations. Regional

and Sectoral Chambers of Commerce and Industry, Bilateral Business Council and Employer Organizations in Sri Lanka

(www.chamber.lk).

While the Government is committed to a policy of gradually relinquishing a directly productive role, as well as diminishing a

constructively controlling role in the economy, the private sector has yet not been able to make full use of this broad policy stance

due to the lack of a consistent regime in fiscal, monetary and development strategies that would lead to rapid economic growth.

In this context, the IASL in cooperation with similar bodies in the country will continue to progress for an ongoing dialogue with

the Government to be partner in formulating a realistic strategy for a balanced and stead industrial growth in Sri Lanka.

The industrial policies of the Government are subject to a continuous process of monitoring discussion and debate, so that a

feedback could be given to the Government in the areas that need adjustments and fine tuning. The problems arising out of high

interest rates, unrealistic exchange rates, increasing fuels and electricity tariffs and high levels of taxation are matters that have

received the attention of the IASL.

The IASL is of the view that the programme for Industrial Development must be purposive. Some of these issues on which the

IASL has constantly focused attention are:-

• An assurance of socio-political stability based on sound institutional foundations.

• Consistent fiscal and monetary policies.

• A stable and well co-ordinated system of taxation.

• The acceptance of a strategy which recognizes high value added manufacturing industry as the take-off point.

• The development of sector strategies.

• Industry to meet local demand to be given its due place together with export orientated industry.

• Improved infrastructure facilities


5

MEMBERS OF THE EXECUTIVE COMMITTEETHE INDUSTRIAL ASSOCIATION OF SRI LANKA – 2014/2015

Seated Left to Right:-

M/s Sanjay Tiwari (Piramal Glass Ceylon PLC); Noel Selvanayagam (Senok Trade Combine (Pvt) Ltd; Pravir Samarasinghe, Immed.

Past Chairman (The Swadeshi Industrial Works PLC); Nilam Jayasinghe, Chairman (Ceylon Biscuits Ltd); Ms. Eteri Kvintradez, Chief

Guest, Country Head IMF, Sri Lanka and Maldives; Dinesh Dharmadasa, Snr. Vice Chairman, (Ceylon Tobacco Co. PLC); and Rimoe

Saldin, Vice Chairman (Polypak Secco (Pvt) Ltd.

Standing Left to Right:-

M/s Samantha Rajapakse (Associated Motorways (Pvt) Ltd); Indrajith Wickremasinghe (NDB Bank PLC); Hiran Senewiratne (Litro

Gas Lanka Ltd); Bandula Egodage (Nestle Lanka PLC); Rohan Casiechetty, (The Secretariat, The Ceylon Chamber of Commerce);

Sarath Weerasooriya (Alpha Industries (Pvt) Ltd; Dushantha Ranaraja (Haycarb PLC); Anushka Vidanapathirana (Hettigoda

Industries (Pvt) Ltd); Vidya Vidyaratne (Singer Industries (Ceylon) PLC); Viville Perera (Richard Pieris & Co PLC); Shiran Jansz (The

Lion Brewery (Ceylon) PLC)).


6

THE INDUSTRIAL ASSOCIATION OF SRI LANKAOFFICE BEARERS AND EXECUTIVE COMMITTEE – 2014/2015

Chairman

Mr. Nilam Jayasinghe Ceylon Biscuits Ltd

Vice Chairman

Mr. Dinesh Dharmadasa Ceylon Tobacco Co PLC

Mr. Rimoe Saldin Polypak Secco (Pvt) Ltd

Immediate Past Chairman

Mr. Pravir Samarasinghe The Swadeshi Industrial Works PLC

Executive Committee

Alpha Industries (Pvt) Ltd Associated Motorways (Pvt) Ltd

Haycarb PLC Hettigoda Industries (Pvt) Ltd

Litro Gas Lanka Ltd National Development Bank PLC

Nestle Lanka PLC Piramal Glass Ceylon PLC

Richard Pieris & Co PLC Senok Trade Combine (Pvt) Ltd

Singer Industries (Ceylon) PLC The Lion Brewery (Ceylon) PLC

Unilever Sri Lanka Ltd

Secretariat

The Ceylon Chamber of Commerce


7

A BAUR & COMPANY (PRIVATE) LTD

ACL CABLES PLC

ACME PRINTING & PACKAGING PLC

AGRO TECHNICA LTD

ALLY WEERASINGHE LTD

ALPHA INDUSTRIES LIMITED

ANSELL LANKA (PVT) LTD

ASSOCIATED MOTORWAYS (PRIVATE) LTD

BROWN & CO. PLC

BUILT ELEMENT LIMITED

C.W. MACKIE PLC

CCS LANKA (PVT) LIMITED

CENTRAL INDUSTRIES LTD

CEYKO PROJECTS PRIVATE LTD

CEYLON BISCUITS LTD

CEYLON OXYGEN LTD

CEYLON TOBACCO COMPANY PLC

CEYLON TRADING CO. LTD

CIC HOLDINGS PLC

COATS THREAD EXPORTS (PVT) LTD

COCA-COLA BEVERAGES SRI LANKA LTD

COLOMBO LAND & DEVELOPMENT CO. LTD

CONVENIENCE FOODS (LANKA) PLC

DANKOTUWA PORCELAIN PLC

DAVID PIERIS MOTOR CO. LTD.

DIPPED PRODUCTS PLC

DUTCH LANKA TRAILER MANUFACTURERS LTD

DYNAMIC TECHNOLOGIES (PVT) LTD

EXPACK CORRUGATED CARTON (PVT) LTD

FONTERRA BRANDS LANKA (PRIVATE) LTD

GLAXO WELLCOME CEYLON LTD

HAYCARB PLC

HEMAS MANUFACTURING (PTE) LTD

HETTIGODA INDUSTRIES (PVT) LTD

HOLCIM LANKA LTD

HOVAEL HOLDINGS (PVT) LTD

ISURU ENGINEERING (PTE) LTD

KEELLS FOOD PRODUCTS PLC

KOTMALE HOLDINGS LTD

LANKA SYNTHETIC YARNS (PVT) LTD

LANKA WALLTILES PLC

LANKEM DEVELOPMENTS PLC

LION BREWERY (CEYLON) PLC

LITRO GAS LANKA LTD

LOGIWIZ LIMITED

MALIBAN BISCUIT MANUFACTORIES LTD

MIDAYA CERAMIC CO LTD

MODERN PACK LANKA (PVT) LTD

NATIONAL DEVELOPMENT BANK PLC

NESTLE LANKA PLC

NICO BATTERY MANUFACTURERS LTD.

PHOENIX INDUSTRIES LTD

PIRAMAL GLASS CEYLON PLC

POLYPAK SECCO LTD

PRIMA CEYLON (PRIVATE) LTD

REGNIS LANKA LTD

RENUKA AGRO EXPORTS (PVT) LTD

RICHARD PIERIS & CO. LTD

SENOK TRADE COMBINE LTD

SINGER (SRI LANKA) PLC

SINGER INDUSTRIES (CEYLON) LTD

SINGHA CEMENT (PVT) LTD.

SMITHKLINE BEECHAM (PVT) LTD

THE SWADESHI INDUSTRIAL WORKS PLC

TOKYO CEMENT COMPANY (LANKA) LTD

ULTRA TECH CEMENT LANKA (PVT) LTD

UNILEVER SRI LANKA LTD

VARNA LTD

WEERA INDUSTRIES (PVT) LTD

WESTERN PAPER INDUSTRIES (PVT) LTD.

ZAM GEMS (PVT) LTD

LIST OF MEMBERS OF THE INDUSTRIAL ASSOCIATION OF SRI LANKA


8

CHAIRMAN’S REVIEWDear Member

I am pleased to present to you the Annual Report and Accounts of your Association, the Industrial Association of Sri Lanka (IASL) for the year ended 31 March 2015.

During the year under review, the IASL continued to serve the interest of its membership by responding to the challenges encountered during the year in numerous ways. These include, engaging Government officials in different agencies and also making proposals in relation to policy related matters for their consideration. Some challenges were specific to certain industries that members represent, while others were general issues that affect and constraint the operations of all industries per se.

A few years ago your Association with the assistance of an economic research team, compiled a document that provided guidelines for the formulation of a framework in the development of an Industrial Policy. The contents of the document which is now outdated was presented to the relevant authorities as a guideline towards developing an Industrial Policy Framework. During the year, initiatives were taken to re examine this document and renew the contents to be more current and to be presented to the new Government.

It is believed, that with new Government in place, the revised industrial policy document which is being reviewed and updated would enable and assist the Government in formulating a new Industrial Policy, which is long overdue, in taking Sri Lanka forward to meet the desired goals of the existing Government.

According to the Central Bank of Sri Lanka’s Annual Report 2014, the Industry Sector recorded a significant growth of 11.4 per cent in 2014 compared to 9.9 per cent in 2013. This expansion was supported by the positive contribution from all major sub sectors thereby increasing the Industry sector share to 32.3 per cent of GDP from 31.1 per cent in the previous year. The manufacturing sub sector, which accounts for 53.4 per cent of the value addition in the industrial sector, grew by 8 per cent in 2014. However, the factory industry, which is the most significant sub sector of manufacturing, grew by 8.5 per cent in 2014 compared with 7.9 per cent in the previous year reflecting fast pickup in manufacturing apparel for export. Performance would have been better if not for a temporary slowdown in garment manufacturing and exports in October and November. The boom in construction was eminent as it grew by 20.2 per cent in 2014 compared to 14.4 per cent in 2013. The Association is fortunate to have on its Executive Committee, Chairman of the Export Development Board (EDB) who continued to give his valuable inputs and assistance in matters concerning the various FTAs.

I wish to reiterate the need and importance of raising issues and constrains, both specific and general to the membership, to be taken up and lobbied with the relevant authorities.

Finally, I wish to convey my sincere appreciation and thanks to the members of the Executive Committee and the staff of the Secretariat who have extended their utmost support to me during the year in meeting the objectives of the Association.

Nilam JayasingheChairman

During the year under review,

the IASL continued to serve the

interest of its membership by

responding to the challenges

encountered during the year in

numerous ways.

I wish to reiterate the need and

importance of raising issues and

constraints, both specific and

general to the membership, to

be taken up and lobbied with the

relevant authorities.

“

“

“

“


9

REVIEW OF ACTIVITIES

23RD ANNUAL GENERAL MEETING

The 23rd Annual General Meeting of the Association was held on 29 August 2014 at the Cinnamon Grand, Colombo 3 amidst a large gathering of members and invitees.

The Chief Guest was Ms. Eteri Kvintradze, Country Head, IMF Sri Lanka and Maldives.


10

THE ASSOCIATIONS’ REPRESENTATIONS ON OTHER BODIES

During the period under review, the Association made numerous submissions and recommendations through the following bodies on various industrial related issues affecting the membership.

The Ceylon Chamber of Commerce

The Association is represented on the main committee of the Ceylon Chamber of Commerce by Mr. Nilam Jayasinghe, Chairman of the Association.

National Labour Advisory Committee

Following the retirement of Mr. Vidya Vidyaratne in September 2014, Mr. Kelum Kospelawatte represented the Association at the National Labour Advisory Council (NLAC). The NLAC was set up to function in an advisory capacity for review of Labour Policy and to recommend desirable changes with regard to such policy changes.

Employees Federation of Ceylon

Mr. Pravir Samarasinghe represented the Association at the EFC Affiliated Associations Group.

NATIONAL BUDGET 2015 PROPOSALS

Proposals were solicited from the membership towards the National Budget 2015 and submitted to the relevant authorities. The submissions focused mainly on policy related matters mainly affecting the members and under the following:-

Energy Cost

Energy costs comprises of significant portion of the structure of the local manufacturing industries. Electricity cost that was increased in May 2013 had almost an increase of 18% of the energy bill. LP Gas costs which are benchmarked to global prices was Rs.157/- per Kg in March 2013 and increased to Rs. 199/- per Kg but has declined to Rs. 150/- per Kg by July 2014. We were also comforted that the industrial diesel prices remained stable during past 12 months.

Considering the sensitivity that energy costs bears on our costs of production and the need to maintain selling prices stable, we urge that all energy costs be maintained at the current pricing structures during the next fiscal year. We request the Government to consider providing concessions to high energy consuming industries based on export generation and/ or value addition, similar to a carbon credit scheme.

Research & Development and Innovation

Research and Development (R&D) initiatives should be encouraged by investing in innovation and improving Sri Lanka’s competitive advantage in the products and services it offers. It is recommended that the Government encourage R&D spend and provide triple deduction of R&D expenses incurred on its own in respect of research carried out by approved private sector firms.

Additional, industry specific issues raised by members were also addressed with recommendations. However, with much regret, none of the Association’s proposals were considered and no relief offered to industrialists through the budget.

DRAFT LAND BILL

The proposed Land Bill (Restriction on Alienation) which was proposed under the previous Government and which had remained unresolved was continued to be lobbied against its ill effects if passed by the Parliament by the Association.

POWER & ENERGY

In October 2014, the then President of Sri Lanka HE Mahinda Rajapakse issued a decree to reduce the electricity tariff by 25% to household consumers which was accepted. Since no reduction was offered to the industrial sector, the Association made requests to the authorities to offer the concession to industrialists as well, even after the commissioning of the Norocholai power plant.


11

Prior to the Presidential Election in January 2015 and in the Interim Budget of the new Government, that was presented in February 2015 by Hon Ravi Karunanayake, Hon Minister of Finance although gas prices were revised, there had been no respite offered towards granting a reduction in the use of gas for industries.

Your Association made representations to both the Hon Ministers of Finance and Petroleum seeking redress.

In addition, your Association on behalf of a member, lobbied to the Government requesting for a reduction in furnace oil.

FTA WITH CHINA

The Association is fortunate to have on its Executive Committee, Mr. Bandula Egodage, Chairman of the Export Development Board (EDB)who continued to give his valuable inputs and assistance in matters concerning the probable FTA with China.

Continuing from the previous year, your Association continued to lobby to the authorities that if in the event a FTA was implemented to ensure that local industrialists are given the right protection and also to ensure that inferior goods would not infiltrate the local market.

Inputs from members were solicited from members requesting which products that they would like to be included into the negative list of the proposed FTA.

LABOUR

At the interim budget that was presented in February 2015, a proposal was put forward for the private sector to grant a wage increase of Rs. 2,500/= per month per employee.

Discussions and views with the Employers Federation of Ceylon with whom the Association closely works on this wage increase was sought and found that this is impractical.

Your Association made representations to Hon Ranil Wickremasinghe Prime Minister highlighting the practical difficulties the employers would face and also that the private sector has a well-placed mechanism on wages.

INDUSTRIAL AND OTHER ISSUES

Gazette Notification No. 1851/1 dated 24 February 2014 (Direction 49)

Your Association continues to keep a close eye on the developments on the progress on the status on the Gazette Notification. Legal proceedings are underway. A Stay Order has been issued by the Court of Appeal stating that the implementation of the directive which was to be implemented effective from 01 August 2014 has been withheld.

To re-cap a directive was issued by the Chairman, Consumer Affairs Authority (CAA) where every local manufacturer, distributor trader, importer of the following identified products should bear a security stamp obtained from the CAA.

1. Soft Drinks2. Bottled Water /Bottled Mineral Water3. Branded Edible Oil4. Toothpaste5. All Types of Soap6. Shampoo7. Paint8. Electrical Switches, Sockets, Circuit Breakers

COMMUNICATION

Frequent updates on industrial and economic related matters are disseminated to the members by the Secretariat. In order to serve its members wherever possible, the Association very frequently solicits inputs from its members.

Website

Frequent Monthly analysis on the Association’s website www.industrialassociation.lk appears very favourable with many frequent visitors to the site.


12

ECONOMY

The Global Economy

The global economy posted a year over year growth of 3.3 per cent in 2014 which was the case in 2013. Global trade picked up during the second half of the year and this momentum is likely to improve the global output marginally to 3.5 per cent in 2015. According to the World Bank 2015 Global Economic Prospects report, developing countries face a series of tough challenges in 2015, including the looming prospect of higher borrowing costs in a new era of low prices for oil and other key commodities. This will result in a fourth consecutive year of disappointing economic growth. Developing Countries are now projected to grow by 4.4 per cent with a likely rise to 5.2 per cent in 2016 and 5.4 per cent in 2017.

In 2014, China continued to lead the way globally even though the country’s economic growth came down to 7.4 per cent. The US, the main driver of the world economy, had the strongest rebound and registered a growth 2.4 per cent during the past year. Euro zone grew modestly while growth slumped in Japan to 0.1 per cent. Exports and investment continued to pick up in India as the country posted an impressive growth of 5.8 per cent.

The Sri Lankan Economy

According to the Central Bank of Sri Lanka Annual Report 2014, the Sri Lankan economy showed its resilience in the face of domestic as well as external challenges. Real GDP grew by 7.4 per cent in 2014, in comparison to the growth of 7.2 per cent in 2013. Accordingly, GDP per capita increased to US dollars 3,625 in 2014 from US dollars 3,280 in the previous year. The economy was driven by domestic consumption expenditure that constitutes the largest share of aggregate demand, while investments, particularly on construction, also provided an impetus to the economic expansion during the year. On the production side, the Industry and Services sectors continued to perform well, while adverse weather conditions dampened the performance of the Agriculture sector during the year.

Interest rates in Sri Lanka declined during 2014. The CBSL monetary policy measures were designed to enhance credit growth. However, decline in pawning advances and companies borrowing via corporate bond issues hampered growth in credit up to July 2014 before it picked up from August 2014 due to further relaxation of the monetary policy.

Inflation was controlled to single digit levels with headline inflation reducing to 2.1 per cent YoY at the year end as a result of subdued international commodity prices and sharp reduction in energy prices which reduced utility cost. The Sri Lankan rupee was relatively stable with fewer shocks during 2014 with depreciation of the rupee seen against US dollar by 1 per cent while rupee appreciated against Euro by 13 per cent and Sterling Pound by 6 per cent.

With respect to the external sector, the trade deficit during 2014 widened by 9.1 per cent to USD 8,299 Mn over 2013. An increase in total foreign earnings from tourism coupled with workers’ remittances, acted as catalyst for a BOP surplus of USD 1,375.7 Mn compared to the surplus of USD 985.4 Mn in 2013. As a result, the gross official reserves increased to USD 8.2 Bn, a comfort zone equivalent to 5.1 months of imports by end of 2014.

Even though GDP has increased, the fiscal deficit to remain around 6% of GDP. Government debt is 74% of GDP which poses a huge risk if desired returns do not materialize from the investments made through borrowing. Overall, the economy has demonstrated resilience to the global and domestic challenges due to the prudent policy measures taken by the government and Central Bank of Sri Lanka.

By Order of the CommitteeThe Industrial Association of Sri Lanka

Rohan CasiechettySecretariatThe Ceylon Chamber of Commerce


13

The Industrial Association of Sri LankaMinutes of the 23rd Annual General Meeting

29 August 2014 at 6.00 pm at the Cinnamon Grand, Colombo 3

Mr. Pravir Samarasinghe, Chairman of the Industrial Association of Sri Lanka welcomed the members and guests and called the 23rd Annual General Meeting to order.

1. Confirmation of the Minutes of the 22nd Annual General Meeting – 2012/2013 held on 12th July 2013

Minutes of the 22nd Annual General Meeting 2012/2013 were duly adopted:-

Proposed by : Mr. Hiran Senewiratne, Litro Gas Lanka Ltd Seconded by : Mr. Anushka Vidanapathirana, Hettigoda Industries (Pvt) Ltd 2. Adoption of the Annual Report and Accounts for 2013/2014

Proposed by : Mr. Rimoe Saldin, Polypak Secco (Pvt) Ltd Seconded by : Mr. Viville Perera, Richard Pieris & Co PLC

3. Address by Mr. Pravir Samarasinghe, Chairman

Quote

“Chief Guest Ms. Eteri Kvintradze , your excellences’, distinguished invitees and fellow members;

Last year was an eventful year for your Association. We had the opportunity to make a number of proposals and engage Policy makers on various issues facing our members and industrialists.

The Annual Report circulated to you and its Review of Operations gives in detail the activities and performance of your Association during 2013/14.

I will now, summarize a few key thrust areas of your Association last year. Our representations and submissions were primarily on policy related matters under four areas of focus:

Firstly, Industry Competitiveness:

We believe Research & Development, Innovation and the upgrading and use of advanced Technology are essential in building long term sustainable competitiveness. We continued our advocacy on encouraging R&D and Technology enhancements, and we are happy with the fiscal concessions extended and progress made in this sphere.

We also believe a number of important Labour Reforms are needed to support emerging industries and newer work arrangements. These reforms will actually create a more enabling environment for employment generation and productivity enhancement. However, there has been limited progress and political will, in implementing positive changes to some of our outdated Labour Laws.

The Second area of focus was the Economy:

The sound management of the economy with consistent policies and maintaining an investor friendly environment is important to sustain economic growth and private sector investment.

We are pleased with the fiscal and monetary policies and taxation reforms introduced in the recent past. The outcome on our economy has been positive.

We enjoyed a 7.3% Growth last year, interest rates and inflation have been gradually reducing over the years, our Balance of Payment has also improved and the Sri Lankan Rupee has now been stable, which are all positive trends.

We are also encouraged by the Government’s increased investment in infrastructure which helps build the foundation for economic development.

We, however, await more meaningful reforms to our education system to bring about a more demand driven talent pool and to our State Owned Enterprises to improve efficiencies and thereby be less of a burden to the State Coffers.

The third area of focus was Industry Policy:

We are encouraged that the Government has initiated a number of programs to promote regional industrial development, Industrial Estates, SMEs and Cottage based industries as well as certain strategic import substitution industries. These are very positive policy directions that your Association had been advocating.

We look forward to continued Government facilitation for SMEs to develop forward linkages with larger industrialist who have better access to markets.


14

The lower inflow of FDI and investment into the Industry sector is of concern. Although industry accounts for 31% of our GDP and the factory sub-sector has a major 17% share of this, manufacture grew only by 7% in 2013. It is important that suitable conditions are maintained for industry competitiveness and development.

We strongly believe the manufacture of actual tangible goods have true potential to create real value addition to the economy, employment generation to our work force and bring about a meaningful upliftment in our economy. Hence, it is important that we nurture, protect and foster the growth of industry through the implementation of sound Industrial Policy.

The fourth area of focus was Export Development :

We strongly believe for us to have a healthy and well balanced economy with high sustainable growth the export sector is of vital importance. Today Industry accounts for 75% of our exports, although its share to GDP has gradually declined over the last 2 decades. Further, our industrial exports grew only by 5% last year. However, the 1st half of 2014 showed very positive results with our Industrial Exports recording a 13.5% year on year growth

Both the private and Government sector must play an important role in reviving our export industry. We must look at alternative markets in Asia and diversify our value added product portfolio.

We are pleased to note the steps taken by the Government in entering into a Free Trade Agreement with China which would open up a large market for our main export categories; Apparel, Tea and Gems etc. We have also voiced our concerns and stressed the importance of providing adequate protection to our local industries and the SMEs in particular and being sensitive to cheap inferior quality imports from China.

Currently only 5.4% and 1.2% of our exports are to India and China. Soon we will have FTAs with both these large and fast growing markets which provide huge opportunities to our industrialists. Exporting branded and finished goods to these large consumer markets should be aggressively pursued by the private sector. However, we need continued State support in removing unfair non-tariff barriers which impedes market entry, especially into India.

Conclusion

I will be completing my term as Chairman of the IASL this year, which I have held now for two years. I shall pass the responsibilities over to Nilam Jayasinghe who has been with the Executive Committee for over 10 years and Deputy Chairman for the last two years.

I am very confident the new Chairman and the incoming team will fruitfully engage and represent the interest of our members and other industrialists.

In conclusion, I wish to thank the members of the Executive Committee, our Secretariat headed by Rohan, the CCC and the General Membership for all the support and guidance given to me during my tenure of Chairmanship.

Thank you”. Unquote

4. Address by the Chief Guest Ms. Eteri Kvintradze, Country Head, IMF Sri Lanka and the Maldives

Chief Guest Ms. Eteri Kvintradze, Country Head, IMF Sri Lanka and the Maldives spoke on the economy transformation of her native country Georgia.

5. Election of Office Bearers for the Year 2014/2015

Mr. Pravir Samarasinghe mentioned that he would be stepping down as Chairman and proposed the name of Mr. Nilam Jayasinghe, Senior Vice Chairman, Ceylon Biscuits Ltd to take over the Chairmanship of the Association.

Mr. Jayasinghe thanked Mr. Samarasinghe and the members for having elected him as the Chairman of the Association.

6. Address by Chairman Elect – Mr. Nilam Jayasinghe

Quote

“A very good evening. Let me extend a warm welcome to each and everyone of you, to the 23rd Annual General Meeting of the Industrial Association of Sri Lanka.

The Chief Guest Eteri Kvintradeze, Country Head of the International Monetary Fund in Sri Lanka and the Maldives,


15

Members of the Head table

Members of the diplomatic community

Distinguished invitees

Members of the IASL

Ladies and gentlemen

I am deeply honoured, and consider it a privilege to address the 23rd Annual General Meeting of the Industrial Association of Sri Lanka. Let me thank the members of the IASL for the confidence placed in me and electing me as the Chairman for the ensuing year.

Firstly, I wish to draw reference to a speech made by the Chairman, of the Ceylon Chamber of Commerce, Suresh Shah on the 29th July at the Ceylon Chamber‘s 175th Anniversary, which was graced by His Excellency the President. In his speech the Chairman of the Chamber fast forwarded Sri Lanka and expressed, what Sri Lanka would be in 25 years, in 2039. “I quote,”

• Sri Lankan Brands are international • Local companies are regional players with a global a foot print• Sri Lanka’s infrastructure is in par with the developed countries in South Asia.• Sri Lanka is the preferred destination for investment; unquote

These are a few from his long list.

Ladies and gentlemen, what was mentioned, are not dreams and illusions of the future, but achievable if both the Government and the private sector have the clear intent and conviction to get there.

Most companies that we represent here, have grown during an era of conflict over the past 25 years, which may not have enabled those companies to prove their true potential. However, despite such constraints, some companies particularly those in the apparel sector, and also a few others, have proved that they are, “world class”. Post conflict, we are in a unique situation that Sri Lanka can be envied by most in the region.

Everything around us is not perfect, and there are some impediments, and it will be so even in the future. But today we are free to go about our business, interest rates are far more conducive to borrowers, exchange rates are free of sudden volatility, inflation is relatively stable, infrastructure developments have taken place at a pace that we haven’t witnessed before. However, despite all these healthy indicators, private sector credit growth has seen a sharp decline during the past 3 years. Private sector credit growth, which was 34.5% in 2011, declined to 17.6% in 2012 and further declined to 7.5% in 2103. It is now estimated to be 2% in 2014 upto June. This is not a healthy trend if we are to aspire reaching those economic targets ahead of us.

It is acknowledged that the contribution to GDP by the services sector will remain high at nearly 60%, 58.1% to be exact in 2013. The Industry sector is the second largest contributor to GDP at 31% and has grown by 9.9% in 2013. Most of our members represent the factory Industry sub sector that is the largest contributor to the manufacturing sub sector that has grown by 7.9% in 2013, and contributes 15% towards GDP. Is this adequate?. As in the more developed countries, cannot the contribution from the factory industry sub sector be increased to 20% of GDP in the next 10 years to enable a more significant contribution? Ladies and gentlemen, I strongly believe that if there is a sound and clear industrial policy framework and a conducive and investor friendly environment this is achievable.

Today there is a clear need for trained labour and managerial talent within industry on a day-to-day basis. Sri Lanka’s overseas remittances have become one of the most significant revenue stream to Sri Lanka’s economy. Worker remittances in 2013 amounted to Rs 827 billion, which will probably increase to Rs 900 billion this year. In 2013, 293,000 Sri Lankans have travelled overseas on employment, an increase of almost 4% over the last year. When we are in need of indigenous labour and knowledge at home, can we continue to trade our knowledge and sweat on a continuous basis? Cannot we reverse this trend and redeploy these professionals and workforce in local industries in a more dignified manner in their own surroundings with minimum social costs. I firmly believe we can.

As we all know, Sri Lanka is located extremely strategically, equipped with an able and literate and also a trainable workforce. Our costs are yet not too uncompetitive. Together with all these positives that prevail, isn’t it time that we formulate an industrial policy for the, “New Sri Lanka” that will stimulate industrial growth to meet the economic goals we have set for us.

Often, we keep comparing ourselves with Singapore of the past. Of course, in recent years with increased costs, more industries have moved out of Singapore. But with limited space and absolutely no natural resources but a literate work force, Singapore has per capita GDP of almost USD 55,000 against Sri Lanka’s GDP per capita of USD 3,200.


16

Apart from the routine functions that are performed by the IASL to represent and be an advocate of the members, I also intend focusing on the following with the assistance of the committee during the ensuing year.

1. To engage and work with the Ministry of Industry and Commerce and create a forum that could address both the common problems and constraints that affect all members and others, which are specific to members.

2. To review the National Industrial Policy Framework that was developed by the IASL in 2009 under the Chairmanship of Dr Anura Ekanayake, with the assistance of the Institute of Policy Studies and with World Bank financing and re-present the same to the Government through the Ministry of Industry and Commerce for consideration.

3. To improve member engagement and increase the membership to 100.

Ladies and gentlemen, despite a fairly conducive environment, the manufacturing and industries sector has many challenges ahead of them, however, if we are to reap the post conflict dividend, let us not grumble and complain but to look at the numerous opportunities that are ahead of us in reaching a GDP per capita of USD 7,000 by 2020. In this regard I would urge the government to provide an industry and investor friendly environment particularly by enabling a clear direction and a consistent policy framework.

The success of any association of this nature, relies mainly on the degree of engagement of its members. I hope that in the ensuing year, we will have a much greater degree of member involvement that will generate value and a meaningful contribution both to our membership and to the economy at large.

I sincerely hope that I could discharge my duties in meeting the expectations of the members with cooperation and support, of both the members and the committee.

I wish to conclude with a very simple quote from Salvadore Dali the famous Spanish surrealist artist from the last century. He said, I quote, “Have no fear of perfection - you’ll never reach it fully, but make the best of any situation when you can”

Thank you”. Unquote

7. Election of the Executive Committee for the Year 2014/2015

From the chair, Mr. Nilam Jayasinghe proposed the names of Mr. Dinesh Dharmadasa, Ceylon Tobacco Co PLC and Mr. Rimoe Saldin, Polypak Secco (Pvt) Ltd as the Vice Chairmen of the Association for 2014/2015. The nominations were carried unanimously.

Committee Members

Alpha Industries (Pvt) Ltd Associated Motorways (Pvt) LtdHaycarb PLC Hettigoda Industries (Pvt) LtdLitro Gas Lanka Ltd National Development Bank PLCNestle Lanka PLC Piramal Glass Ceylon PLC Richard Pieris & Co PLC Senok Trade Combine (Pvt) Ltd Singer Industries (Ceylon) PLC The Lion Brewery (Ceylon) PLCUnilever Sri Lanka Ltd

8. Appointment of Auditors – 2014/2015

From the chair, Mr. Nilam Jayasinghe proposed that KPMG continue as Auditors for the ensuing year.

9. Any Other Business

The Chairman announced that in the absence of any other business, closed the meeting and invited Mr. Dinesh Dharmadasa, Senior Vice Chairman to deliver the vote of thanks.Thereafter the Chairman invited the members and guests to fellowship

Rohan CasiechettyAssistant Secretary GeneralThe Ceylon Chamber of Commerce for The Industrial Association of Sri Lanka

23 September 2014.


17

THE INDUSTRIAL ASSOCIATION OF SRI LANKA

STATEMENT OF RECEIPTS AND PAYMENTSYEAR ENDED

31ST MARCH 2015


18


19


20

Name of Association The Industrial Association of Sri Lanka

Registered Address

c/o The Ceylon Chamber of Commerce 50 Navam Mawatha Colombo 2.

Secretariat

Mr. Rohan Casiechetty The Ceylon Chamber of Commerce 50 Navam Mawatha Colombo 2.

Association Information

Web

www.industrialassociation.lk

Telephone

+94 (011) 5588836

E-Mail

[email protected]

Accounting Year-End

31 March

Industrial Association of Sri Lanka

Annual General Meeting24

Annual Report 2014

th

24 th annual general meeting a s lindustrialassociation.lk/documents/2014_ar1.pdf · 24th annual...

Documents