Sri Lankan government push to increase leather exports

Leather products and footwear are to be given a push by the Ministry of Enterprise Development, a news release from the Enterprise Development has said. With the aim of boosting exports to the world market and bringing welcome foreign exchange to Sri Lanka's economy, the push will be in the same way the apparel industry was introduced in the 1980s. The ministry, which initially identified the industries that should be prioritised in the industrial sector for economic development, selected 16 sectors. Sri Lanka Minister, Prof G L Peiris, then appointed 16 task forces to work out the necessary strategies to uplift these sectors and report back. Customs reports that nine million pairs of footwear were brought into the country in the last year but the declared figures read only three million. Due to such large numbers imported, the local footwear industrialists suffered a great deal, unable to market their products. As a consideration of the numerous representations made to the Minister by the local footwear associations, the government imposed a tax of Rs100 on each pair brought into the country. The government also placed a restriction on the maximum number of pairs to be brought in by those returning from overseas. Similarly, whilst the 25% tax levied on the import of footwear accessories was reduced to 10%, those who were engaged in importing footwear switched over to importing accessories instead, to the benefit of small scale footwear manufacturers. Under the new programme launched, the existing tax of 10-15% levied on tanned leather will be brought down to 2%. Furthermore the Ministry of Finance has agreed to bring down the tax on chemicals used in the manufacture of products. In addition, steps will be taken by the ministry to obtain export orders for approximately 80-100 small and medium scale leather products and footwear industrialists and also to upgrade the standards of their products. Preliminary discussions are also under way to create a modern design centre in order to develop manufacturing skills and consideration is also being given for all industrialists to be brought to one industrial estate built purely for the manufacturers of leather products and footwear. Currently, under a long-term programme, the Ambalantota, Batatta leather tanning industrial estate is being built with foreign aid. Facilities required for local leather products and footwear manufacturers, to bring their products up to the latest standards and make their products more competitive, are in the process of being developed within the complex.