EDB promotes global value chain linking for automobile component manufacturing sector

In order to identify opportunities to engage in global value chains in the automobile industry, a Sri Lankan business delegation, supported by the Export Development Board (EDB), recently visited Thailand.

“EDB with the assistance of Sri Lankan Embassy in Thailand organised the first ever promotional programme for the automobile component manufacturing sector in Thailand with the objective of seeking opportunities to supply automobile components to the automobile companies based in Thailand and to explore joint venture opportunities to establish manufacturing facilities in Sri Lanka,” the EDB said in a press release.

Due to a fast changing marketplace as a result of product fragmentation and cross boarder dispersion of component production/assembly, each country specialises in a particular stage of production sequence and trades the value added components which ultimately results in the final product, under global value chains (GVCs).
“Sri Lanka needs to switch to export oriented industrialisation where economies of scale could be reaped and more foreign exchange earned. Given the small market in Sri Lanka, import substitution industrialisation cannot reap economies of scale in the domestic market and save foreign exchange to match the foreign exchange earnings of export oriented industrialization,” the EDB said.

According to the state institution, the automobile component manufacturing industry has been identified as one such sector to be developed and promoted in the international market by linking with GVCs.

Although the automobile assembling industry is relatively a new industry to Sri Lanka, this emerging sector is well established in South East Asian countries such as India and Thailand.

Thailand is one of the top ten global automobile manufacturers and a leading producer of auto components. Many leading vehicle manufacturers and auto parts producers have production facilities in the country while some auto parts are still imported from abroad.

Almost all of the world’s major automakers, assemblers and parts and component manufacturers have manufacturing presence in Thailand.

“EDB is working closely with the industry and has identified potential manufacturers to be developed to ensure the sustainable production capacities. Given the appropriate guidance, technology, know-how and exposure the Sri Lankan companies could become producers of quality auto mobile components which could compete with the rest of the world,” EDB said.

Keeping in line with the above, Lalan Rubbers (Pvt.) Ltd, Lanka Harness Co(Pvt.) Ltd, Laugfs Corporation (Rubber) Ltd, Sierra Cables PLC, Polymer Products Inpex (Pvt.) Ltd, Accolade Composite Technologies, Auto Foam (Pvt.) Ltd, Bopitiya Auto Enterprises, F.R.P. Technologies (Pvt.) Ltd participated at the programme.
The Sri Lankan delegation visited Metalex exhibition for metal working and automotive products and accessories. Items displayed by 392 exhibitors at the show included equipments with wires and tubes, pumps, valves, molds, welding machinery, and sheet metalworking products from 50 countries. This provided an opportunity for the Sri Lankan manufacturers to explore business opportunities for metalworking related to automobile component manufacturing.

The Sri Lankan delegation had a business meeting with the members of the Federation of Thai Industries, Thai Automotive Industry Association, Thai Auto Parts Manufactures Association at Bangkok International Trade and Exhibition Centre and Board of Investment in Thai to explore possibilities to supply automobile components to the automobile companies based in Thailand and to explore JV opportunities to establish manufacturing facilities in Sri Lanka.

Factory visits were organised to leading manufacturers such as Summit Auto Body Industry, Summit Auto Tech Industry, Thai Rung Union Car Public Co Ltd. and Mercedes Benz Assembling Plant and more. Sri Lankan companies had the opportunity to get an understanding of the Thailand Automobile/Automobile component manufacturing industry.