Sri Lanka Export Development Board (EDB) having collaborated with Asian Development Bank carried out a study to identify issues being encountered by companies in their value chains pertaining to few identified sectors in Sri Lanka such as Rubber, Fruits and Vegetables with the objective of assisting them to address some of the major issues hindering exports.
One of the issues identified by the study was that though these companies individually are in a weak position to address the common issues prevailing in the value chain, collective effort might bring solutions that could be executed through the Cluster Development and Financing approach accepted worldwide. Giving impetus to the rapid adoption of ‘collaborate to compete’ theme Sri Lanka has embraced a novel concept. Known as ‘Special Purpose Vehicle Entity’ and simply referred to as SPV, a new economic collaboration platform that connects corporates with homogenous needs, competencies and business interests with the aim of mutual prosperity.
Aligning to the above observation, EDB together with the ADB and the rubber sector stakeholders undertook the pioneering initiative to establish SME Clusters by way of formation of a SPV entity which has been a widely adopted mechanism across the global context.
Following the above framework, five major Sri Lankan rubber sector exporters have marked a new chapter in the country’s business economy by coming together to form a business alliance under the umbrella of a SPV named ‘Lanka Rubber Global Consortium’ (LRGC) which was officially launched on May 18th 2017.
Lanka Rubber Global Consortium (Pvt.) Ltd is duly incorporated as a SPV to engage collaboratively in business activities pertaining to value chain development and supply chain management processes in polymer and allied industries with a view to remain competitive in global markets in a sustainable manner. For the first time in Sri Lanka, the consortium has brought together rubber sector manufacturers, exporters, Exports Development Board, Asian Development Bank, rubber sector consultants from local and foreign domains and many other stakeholders around a single entity.
The strategic aim of the SPV is to build, grow and to sustain a global brand for the Sri Lankan rubber products and to become the dynamic one-stop for buyers, investors, business opportunity seekers, joint venturing partners and other interested stakeholders to seek new business opportunities and for the members to efficiently and reliably identify suitable business opportunities across the globe.
The concept of SPV is widely used in many developing countries and is considered as an ideal strategy for export development through SMEs. Pursuant to this objective the EDB facilitated the operations of the LRGC by to commence its operation from the EDB based on the model of EDB’s Public Private Partnership (PPP). The EDB has entered into a Memorandum of Understanding (MoU) with Lanka Rubber Global Consortium (Pvt.) Limited.
The consortium consists of five rubber sector companies namely, Jafferjee Brothers Exports (Pvt.) Ltd, Polymer Products Impex (Pvt.) Ltd, Sinwa Holdings (Ltd), Textrip (Pvt.) Ltd and Microcells (Pvt.) Ltd.
LRGC Chairman Mohideen Cader signed the on behalf of the Lanka Rubber Global Consortium (Pvt) Ltd while Sri Lanka Export Development Board Chairperson and Chief Executive Indira Malwatte signed on behalf of the EDB.
Speaking at the occasion, Malwatte stated that this was a significant milestone for rubber industry in Sri Lanka where the different stakeholders will meet together to boost exports of rubber related products.
‘Lanka Rubber Global Consortium’ in addition to encouraging the collective strength channeling among the Sri Lankan rubber sector manufactures, raises the bar of ‘operational excellence’ in the Sri Lankan rubber sector by allowing the local brands to benchmark with the global standards and industry best practices, which ultimately enhances the status of the rubber industry in the country.