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Disgruntled tile importers slam government policy

25 March 2021 08:51 am - 0     - {{hitsCtrl.values.hits}}

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TSIA President Kamil Hussain (middle) addresses press conference. Also at the head table are (from left) Assistant Secretary Shamendra Gunasekara, Committee Member Praveen Fernando, Secretary Irvin Bulathsinhala, former President Doraisamy Vigneshwaran and Vice President A.M.J.M. Jawfer 
Pic by Samantha Perera
 

 

  • Say suspension on tile imports indirectly paves way for duopoly in tile market 
  • Stress importing of tiles much more economical than locally manufacturing, given high energy cost and harm to environment 
  • Say consumers are in precarious situation due to shortage of products and higher prices 
  • Claim Tuesday’s Cabinet decision on ‘ceramic imports’ lacks clarity
  • Hint at an “unforeseen hand” that might be influencing govt. policy decisions

By Nishel Fernando
Sri Lanka’s Tile and Sanitaryware Importers Association (TSIA) yesterday claimed that the current suspension on tile imports is indirectly paving the way for the creation of a duopoly in the country’s tile market, at the expense of the consumer, while potentially causing significant environmental pollution, which could threaten the sustainability of other industries such as tourism.


“The local tile manufacturers can only cater to 40-45 percent of the demand. Further, the imported energy and raw materials account for around 50 percent of the cost of production of tiles locally. As importing of tiles is much more economical than locally manufacturing using high energy cost, we are of the view that this industry will not save any reasonable foreign exchange for the country,” TSIA President Kamil Hussain told reporters in Colombo, yesterday.


The association estimates a US $ 5 million foreign exchange outflow per month from tile imports, while tile importers contribute to approx. Rs.12 billion per annum in various taxes, compared to the below Rs.100 million contribution by the local manufactures. 


The association also claimed that at least some local manufacturers directly increased their prices after the suspension of imports, while the others have removed the discounts given to dealers, indirectly increasing the prices.  


Therefore, the TSIA pointed out that the import controls on tiles have caused additional burden to consumers, with the prices of a 2x2 feet tile, which was around Rs.550 before the imposition of import controls, has now increased to over Rs.800. And many house builders and developers are now on a three to six-month waiting list to purchase the tile varieties they seek.


The association also emphasised that certain tile varieties would not be simply economically feasible for local producers to manufacture.  


Commenting on the decision taken by the Cabinet of Ministers on Tuesday to allow importation of ‘ceramic products’ on 180-day letters of credit, Hussain said that the Cabinet announcement is too vague, as it didn’t specify whether the tiles are included in the ‘ceramic products’. 


Earlier in February, the Finance Ministry published a note announcing the relaxation of tile imports but the very next day, the Controller General of Imports and Exports backtracked on the move.

The TSIA members opined that an “unforeseen hand” might have influenced the government to reverse the decision.


Meanwhile, if the local production is increased, Hussain cautioned that the pollution levels would shoot up as similar to other ceramic industry hubs such as Foshan in China or Morbi in India.


“Since the manufacturing of tiles and sanitaryware consumes high energy and its manufacturing process results in emissions of gaseous effluents containing various quantities of pollutants, dust particles, lead and fluorine (oxide of sulfur, nitrogen, carbon, boron, zinc, calcium compounds), this is a highly polluted industry, which an environmentally-conscious country should consider less engagement,” he urged.


TSIA Assistant Secretary Shamendra Gunasekara cautioned that the country’s rice production could be impacted as the paddy fields contain the most deposits of clay required for tile production.


“We may end up in importing rice, by choosing to produce tile and sanitaryware,” he added. He claimed that the local tile manufacturers are already seeking to mine 7000 acres of abounded paddy fields in the Kalutara district.  Further, he claimed that a particular tile and sanitaryware producer has set up a plant in a tea plantation in Akuressa. 


On the other side, the TSIA pointed out that the employments of about 100,000 individuals are currently at risk, due to the suspension of import of tiles. “Imposing restrictions on tiles and sanitaryware imports would have cascading impacts on auxiliary-related industries such as warehousing, logistics industry, clearing and forwarding, banking and financing and construction industry and commercial real estate,” Hussain added.


The TSIA members occupy an average warehousing space of around two million square feet and around 200,000 square feet of showroom retail space. 


Further, he noted that underemployment of professionals such as architects, engineers, quantity surveyors would also escalate, unless the current suspension is not lifted.


Hussain also hit back on the claims made by tile and sanitaryware producers on low-quality and unsafe products being imported to the country. He said that imports are scrutinised at Sri Lanka Customs and the SLS certificate is a must, while such a requirement is not imposed on locally manufactured tiles.


Having said that the importers noted that they are ready to move into production, if that’s the government policy moving forward. However, they requested 18-24-month period to lift the current suspension on tile imports for them to recover their investments and to service their loans.

 

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