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SRI LANKA
Northern Industries to Double Capacity
Sri Lanka Rubber Industry Urges End of Duty
Sri Lankan rubber manufacturers have asked the government to remove a duty on imports of raw rubber to give them access to cheaper raw materials owing to local production shortages.
"The Sri Lanka Association of Manufacturers & Exporters of Rubber Products requested the removal of the duty on raw rubber imports in order to strengthen local rubber value addition sectors," the ministry of industry and commerce said in a statement.
"It said that raw rubber imports are
necessary for the smooth functioning of the rubber product industry."
The Sri Lanka Association of Manufacturers and Exporters of Rubber Products had earlier asked the government to double, to 24 rupees a kilo, a tax on raw rubber exports to give them access to cheaper local rubber.
The move was resisted by rubber producers who felt they would be denied fair access to the international markets and prices.
The Sri Lankan government as well as the business community is reviving commercial activity in the North Eastern Province of the country. Due to the prolonged insurgency, all kinds of commercial activities were stopped and the local business community had to wind-up its operations. Jaffna based Northern Industries (Pvt) Ltd had closed down its retreading unit. “We had no option but to close down the plant in 1985. We re-opened the plant in 2003,” informed Mr Shanmugalingam of Northern Industries (Pvt) Ltd who has been in the business of tyre retreading from 1963. The Jaffna district is the northernmost region of the Island of Sri Lanka. It is also one of the oldest inhabited sites in Lower South Asia, populated by Tamil speaking people. Jaffna is the most densely populated city of Sri Lanka, second only to Greater Colombo.
The sole retreading unit in the Northern Province started retreading tyres by the traditional hot process way back in the sixties. “We had a monopoly in the Northern Province,” claimed Shanmugalingam. After reviving the plant, the company forayed into the precured process. “We now retread 200 truck tyres by the precure version plus another 200 tractor tyres by the traditional hot process,” Shanmugalingam stated. It retreads front tractor tyres of 11/20 size. Previously, it was doing about 1000 tyres per month but production is down due to the increase in competition after all these years. "Competition has grown in the last 5-6 years. When we started around 17 companies were retreading in the whole country but now the number of units has doubled to 37 companies," he said. Since, the company started precure retreading about three years ago, it has sourced from Treadsdirect. Besides rising competition, Northern Industries is focusing on the local market of the province. “We are not going to other provinces to collect tyres as we did before. We remain focused on the Northern province market. We have earned a name for ourselves in the Northern market,” he emphasized. It runs the plant on a three tyre chamber. With reconstruction activities picking up pace in the North, the company anticipates an increase in the size of the retreading market in the near future and is gearing-up to hike capacity. ‘We are planning to buy an eight tyre chamber by next year to double the capacity. We are planning to visit India to source the chamber by the end of the year," added Shanmugalingam.
island nation as tyre prices move upwards. Retreading in Sri Lanka has a brighter future, already figures for 2011 are double those for the previous year.
“Moreover, the road network is improving in Sri Lanka. The government is widening and paving roads in the Northern Province and that further indicates the increase of truck movements towards the North in the days to come and as a result bringing more casings for retreading,” thinks Shanmugalingam.
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