SL must position itself as a global manufacturing hub for MNCs: Unilever SL Chief

One of Sri Lanka’s largest multinationals recently delivered a reality check to policymakers, emphasising that while the domestic market holds growth potential, it alone is not enough to attract significant investment. Instead, policymakers must focus on the bigger picture.

Unilever Sri Lanka CEO Ali Tariq noted that it is imperative to understand that from a parent company’s perspective, Sri Lanka is not the biggest market in the world, with 22 million people.

“We (Sri Lanka) are considered a small market. So, there is growth opportunity, there is market development opportunity, and we will continue to invest. But there is no opportunity out there which is going to be truly transformational for Sri Lanka,” said Tariq, addressing a panel discussion at the Sri Lanka Economic Summit held in Colombo last week.

He noted that the “big and juicy opportunity” for multinationals is potentially to make Sri Lanka a manufacturing and sourcing hub for global organisations.

Tariq opined that if Sri Lanka could win a small share of MNCs’ global manufacturing base (e.g. Unilever’s global manufacturing spend is almost $30bn), that would be a large number and significantly move the needle for Sri Lanka’s export base.

“So really, the big opportunity is not in investing or transformation. The opportunity is not in investing in the domestic market, but in the potential to be an export case,” he said.

Tariq shared that from a cost-of-doing-business perspective, Sri Lanka is very competitive. Utility and labour costs make Sri Lanka cheaper than some other export hubs for Unilever, such as Mexico, Indonesia, and even Vietnam. The island nation is also strategically located.

However, he noted that if two areas need attention, they are political and economic stability. For most importers, the priority is not just cost competitiveness, but rather resilience and continuity of supply. It is often the first question asked when considering a country as an export hub or service provider, said Tariq.

Further, he asserted that addressing regulatory inefficiencies, such as customs processes that hinder duty-free imports for export manufacturing, is crucial if Sri Lanka is to look towards a transformative journey.

Over the past five years, Unilever has invested approximately Rs. 7 billion in manufacturing capacity. Annually, the multinational allocates around Rs. 1.5 billion in capital expenditure and Rs. 7–8 billion in marketing, product, and brand development.