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Government of Sri Lanka NATIONAL EXPORT STRATEGY OF SRI LANKA BOAT BUILDING STRATEGY 2018-2022

Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

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Page 1: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

Government of Sri Lanka

NATIONAL EXPORT STRATEGY

OF SRI LANKABOAT BUILDING STRATEGY 2018-2022

Page 2: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

The National Export Strategy (NES) of Sri Lanka is an official document of the Government of Sri Lanka

For any queries about the NES, please contact :

Ministry of Development Strategies and International Trade

Address: Level 30, West Tower, World Trade Centre, Colombo 01.Phone : +94 (0) 112337629Phone : +94 (0)112337627 E-mail : [email protected]

Sri Lanka Export Development Board

Address: No. 42 Nawam Mawatha, Colombo-02, Sri Lanka.Phone : +94-11-230-0705 / 11Phone : +94-11-230-0715E-mail : [email protected]

This Boat Building Strategy was developed using the process, methodology and techni-cal assistance of the International Trade Centre (ITC) within the framework of its Trade Development Strategy programme.

ITC is the joint agency of the World Trade Organization and the United Nations. As part of the ITC mandate of fostering sustainable development through increased trade opportunities, the Chief Economist and Export Strategy section offers a suite of trade-related strategy solutions to maximize the development payoffs from trade. ITC-facilitated trade development strategies and roadmaps are oriented to the trade objectives of a country or region and can be tailored to high-level economic goals, specific development targets or particular sectors.

Technical support was provided by Charles Roberge, Rohan Masakorala, Olga Khomula, Stefano Pagani Isnardi.

Financial support was provided by the European Union, as part of the ‘European Union –Sri Lanka Trade Related Assistance : Increasing SMEs’ trade competitiveness in regional and European Union markets’ project. The contents of this document can in no way be taken to reflect the views of the European Union.

The views expressed herein do not reflect the official opinion of ITC. Mention of firms, products, and product brands does not imply the endorsement of ITC. This document has not been formally edited by ITC.

The International Trade Centre

Street address: ITC 54-56, rue de Montbrillant 1202 Geneva, SwitzerlandPostal address: ITC Palais des Nations 1211 Geneva 10, SwitzerlandTelephone: +41-22 730 0111E-mail: [email protected]: http://www.intracen.org

Layout : Jesús Alés (www.sputnix.es)

Page 3: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

NATIONAL EXPORT STRATEGY OF SRI LANKA 2018-2022

BOAT BUILDING STRATEGY

Government of Sri Lanka

Photo: © www.neilmarine.com

Page 4: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

MESSAGE FROM THE BOAT BUILDING INDUSTRY

Boat and ship building, being a high value industry, requires advanced technical capacity & expertise to be able to compete at international levels. The de-mand for a vibrant boat and ship building industry and a regional hub is rapidly increasing. Expanded oceanic traffic in the Indian Ocean sees increased demand for boats and ships and service providers for repairs and other ancillary services. The potential for Sri Lanka’s boat and ship building industry is particu-larly high in light of interest from the global marine in-dustry for Sri Lanka to open itself to the Asian markets.

Sri Lankan products related to boat and ship build-ing has been more competitive in pricing and qual-ity in comparison to regional boat and ship building sectors. This is particularly relevant to the recreation-al boat building industry for which there is immense regional demand and potential growth in the years to come.

The National Export Strategy has identified boat building, a visionary sector, as a priority sector for growth and development over the next five years. The NES focus on boat and ship building will establish this sector to benefit well from the demand for a re-gional boat and ship building hub in Asia. This will lead Sri Lanka towards its aspirations to become a hub of growth & innovation in the Asian region, and thereby providing employment and prosperity to thousands of Sri Lankans.

The NES is looking to develop boat and ship build-ing as an industry in Sri Lanka that will generate in-creased export revenue. This comes in the wake of consultations that took place to chart a course for developing the sector. Participants to these consul-tations included representatives of the public sector, leading boat manufacturing and ship building com-panies, representatives from prominent industry re-lated institutions and the boat building technology improvement institute.

This strategy is a much-awaited document that will streamline the progress of this industry and optimize its strengths. The boat and ship building industry has reserves of potential that could have a tangible im-pact on the Sri Lankan economy and will contribute to a multiplier effect that could benefit other ancillary industries and contribute towards the government’s mandate to making Sri Lanka a well performing re-gional economic hub.

The success of the boat and ship building sector strategy will depend heavily on the commitment of the stakeholders to implementing the strategy and the diligent monitoring of the progress made in im-plementation. As the key stakeholders of this indus-try, we are keen to ensure that the National Export Strategy at large and the boat and ship building sec-tor strategy are provided with the support required for Sri Lanka to establish itself as a hub for boat building and a key destination for the maritime industry in the region. In this journey, we reiterate the importance of the commitment of the government in develop-ing the necessary infrastructure, legal & regulatory framework required for the industry to attract the pri-vate sector investment towards the growth anticipat-ed in the NES.

Let‘s set our sails beyond horizon !

Neil Fernando – Chairman Boat Building Technology Improvement institute The association of boat and ship builders and allied trades

Page 5: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

[ iii ]

[ ACKNOWLEDGEMENTS ]

ACKNOWLEDGEMENTS

The boat building strategy was developed as part of the National Export Strategy ( NES ) of Sri Lanka, under the aegis of the Ministry of Development Strategies and International Trade ( MoDSIT ) and the Sri Lanka Export Development Board ( EDB ), with the financial support assistance of the European Union ( EU ), as part of the ‘EU-Sri Lanka Trade Related Assistance’.

The document benefited particularly from the inputs and guidance provided by the members of the boat building sector team that steered the formulation of the sector Strategy, namely:

Name Position Organization

Mr. Gamini Herath Managing Director Boat Building Technology Improvement Institute

Mr. Ajith Senevirathne Director General Merchant Shipping Secretariat

Mr. Pierre Pringiers CEO BAFF Polymec ( Pvt ) Ltd

Mr. Kapila Sumanapala Director Administration Neil Fernando and Company ( Pvt ) Ltd

Dr. Sarath Obeysekara Managing Director / Chief Executive Officer Walkers Colombo Shipyard ( Pvt ) Ltd

Mr. G. S. Fernando Managing Director Danusha Group of Companies

Mr. S.D. Premathilake General Manager Solas Marine Lanka ( Pvt ) Ltd

Mr. Anuruddha Weerasihghe Engineer – Estimating and Invoicing Colombo Dockyard PLC

Mr. Darshana Chandrasekera Head of Marketing – Ship Repairs Colombo Dockyard PLC

Mr. Rohan Masakorala President Hub Operators Association of Sri Lanka

Eng. S. Prabhakar Representative Ministry of Development Strategies & International Trade

Mr. Viran Fernando Assistant Director Board of Investment

Ms. Chitranjali Dissanayake Director Export Development Board

Ms. Mangala Maduwanthi Development Officer Export Development Board

The full list of public and private stakeholders that contributed their precious time to the design of this Strategy are detailed in Appendix 1.

Page 6: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

Photo: Sail Lonka Charter

Page 7: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

[ v ]

[ CONTENTS ]

CONTENTS

Message from the boat building Industry ii

Acknowledgements v

Acronyms ix

EXECUTIVE SUMMARY 1

A GLOBAL INDUSTRY OPENING DOORS TO NEW BOAT MANUFACTURERS 3

A SRI LANKAN INDUSTRY DRIVEN BY A FAVOURABLE STRATEGIC POSITION AND DEVELOPING TOURISM SECTOR 9

VALUE CHAIN DIAGNOSTICS 15

FOCUSING ON THE MOST PRESSING ISSUES 18

ON THE WAY TO SUCCESSFUL INDUSTRY GROWTH 23

THE FUTURE OF THE SECTOR 23

OPPORTUNITIES TO DEVELOP NUMEROUS BOAT BUILDING PRODUCTS AND MARITIME SERVICES 26

MOVING TO ACTION 35

THE STRATEGIC FRAMEWORK 35

IMPLEMENTATION FRAMEWORK 37

PLAN OF ACTION 2018-2022 41

ANNEXES 49

Appendix 1 : List of participants in the public-private consultations 50

Appendix 2 : Detailed description of key markets 52

Appendix 3 : List of exporting boat building companies 55

References 56

Page 8: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

[ vi ]

[ SRI LANKA BOAT BUILDING STRATEGY ]

LIST OF TABLES

Table 1 : Global exports in boat production, 2016 ( US $ millions ) 6

Table 2 : List of exported products in boat building industry and export value, 2016 10

Table 3 : The Sri Lanka’s export destinations and main exported items 14

Table 4 : Long list of constraints faced by the boat industry value chain 17

Table 5 : Planned marinas 20

Table 6 : Main areas of improvements for the value chain 25

Table 7 : Sri Lanka boat building market orientations by geographical area 28

Table 8 : TISIs supporting the boat building industry 31

Table 9 : Strategic objectives of the Strategy 35

LIST OF FIGURES

Figure 1 : Global boat production turnover ( EUR, billions ) 3

Figure 2 : Global boat production share ( 2014 ) ( % ) 4

Figure 3 : Geographical localization of the boat building companies by turnover 4

Figure 4 : Classification of worldwide boating markets 5

Figure 5 : Global export trends in boat production, 2001–2016 ( US $ , millions ) 6

Figure 6 : Market trends for first six months of 2017 7

Figure 7 : Trade flows and balance and analysis of export growth 11

Figure 8 : Regional exports of ships, boats and floating structures ( HS-89 ), 2012–2016 ( US $, millions ) 11

Figure 9 : Probability of survival of boat building export relationships compared to regional peers, 2002–2016 12

Figure 10 : Sri Lanka total exports of boats and ships, 2005–2016 ( US $ , millions ) 12

Figure 11 : Boat building industry value chain 16

Figure 12 : Future boat building value chain 24

Figure 13 : Institutional framework for boat building industry development 38

Page 9: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

[ vii ]

[ ACRONYMS ]

ACRONYMS

Unless otherwise specified, all references to dollars ( $ ) are to United States dollars, and all references to tons are to metric tons.

The following abbreviations are used :

B2B Business to businessBOI Board of Investment of Sri LankaBTI Boat building Technology Improvement

InstituteEDB Sri Lankan Export Development BoardEPZ Export processing zoneEU European UnionFDI Foreign direct investmentFRP Fibreglass reinforced plasticHS Harmonized SystemICOMIA International Council of Marine Industry

AssociationsIT Information technologyJV Joint ventureMIC Ministry of Industry and CommerceMoD Ministry of Defence

MoDSIT Ministry of Development Strategies and International Trade

MoFARD Ministry of Fisheries and Aquatic Resources Development

MoPS Ministry of Ports and ShippingNBT Nation building taxNM Nautical milesPAL Port and Airport Development LevyPoA Plan of ActionR&D Research and developmentTISI Trade and investment support institutionsTVET Technical and vocational education and

trainingUCINA Confindustria Nautica ItalianaVAT Value added tax

Page 10: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

viii

[ SRI LANKA BOAT BUILDING STRATEGY ]

Photo: © Neil Marine

Page 11: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

1

[ ExEcutivE summary ]

EXECUTIVE SUMMARY

The development of the Boat Industry Strategy for Sri Lanka ( Strategy ) is a five-year endeavour that was defined through a consultative process between public and private sector stakeholders. The Strategy’s goal is to turn Sri Lanka into a renowned manufacturer of boats and boat industry products, a popular recreational boating hub and a yacht and marine industry service centre. Achieving this ambitious objective will depend on the boat building’s actions, monitoring progress and mobilizing resources. Fostering an adequate regulatory environment and creating an enabling framework also are necessary for successful implementation.

sri Lanka intends to expand its boat industry – now fo-cused almost solely on commercial vessels – and make the country a renowned recreational boating hub and yacht service centre for the indian Ocean. A boat industry includes not only the boat building sector but also after-sales services (including refitting and repair), marina services, as-sociated recreational services such as boat charters and all services connected with the efficient use of any vessel. As a key driver and beneficiary, the private sector is responsi-ble for creating favourable conditions for expansion of the industry. By enabling and supporting private sector opera-tors to develop the sector, the Government of Sri Lanka will support overall development.

sri Lanka’s strategic geographical location at the cross-roads of the main maritime routes in south asia, com-bined with the sri Lankan long experience, can make the country an attractive maritime hub that provides a full range of services for a boat’s entire life cycle, including assembly, refuelling, refit and repair for numerous types of boats and seagoing and inland water craft.

currently, sri Lankan boat manufacturers produce diversi-fied products of differing quality levels to meet the require-ments of various markets. Trade in products now made by the Sri Lankan boat building industry can still be expand-ed. Transportation vessels, for instance, are sold to the Sri Lankan, Indian and Singaporean markets but have potential customer bases in Maldives, the Seychelles, Bangladesh and East African countries.

Development of new products, complementary to the ex-isting manufacturing base, could result in niche manufac-tured products and activities linked with the expansion of the local and regional boating business. For instance, production of new fishing industry models, namely mother vessels for fish collecting and processing, target regional markets (Sri Lanka, Maldives and the Seychelles). Supply boats for aquaculture target the local, regional and EU mar-kets, and rowing sculls and kayak production is a global niche market in which manufacturers could compete on price and quality. Increased product diversification, howev-er, may require technological adaptation. For instance, ex-panding production of recreational boats for export to the EU market and to countries with a growing interest in boat-ing (such as Maldives, Singapore, Viet Nam or Kenya) will require updated fibreglass reinforced plastic (FRP) manu-facturing techniques and increased promotion in target mar-kets. Adopting updated FRP manufacturing techniques for expanded production of recreational boats in Sri Lanka may lead to larger recreational boating activity, increased deliv-ery of post-sale services and development of associated marina-based businesses.

Prioritizing the creation of a new waterfront export pro-cessing zone (EPZ) and industry clusters for boat build-ing, repairs and related services will support expanded production and will facilitate boat building, testing and launching. This will attract both new investment in boat fa-cilities and international boat operators requiring services such as boat parking and maintenance.

Key opportunities for the boat building industry lie both in manufacturing and in creating links with other sectors so that the requirements of the entire boating value chain can be met. Hiring one direct employee in boat building gener-ates seven additional indirect employment opportunities. For the Sri Lankan boat building industry, there are obvious con-nections to sectors such as electronics, information technol-ogy (IT) and logistics. Possibilities also exist for production of boating materials and equipment such as marine electronics and marine-related software, interior equipment, furnishing, materials and electrical fittings, machinery, propulsion units, mechanical systems, resins, paints and rubber accessories, which can be produced locally or even exported.

Page 12: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

2

[ SRI LANKA BOAT BUILDING STRATEGY ]

Boating tourism represents a major untapped oppor-tunity for the national economy. Sri Lanka’s coasts and sea/weather conditions make the island an excellent char-ter destination, with the possible expansion of boating and sailing tourism and marina services provision. Investment through public-private partnerships to install basic marina facilities will enable marina operators and charter compa-nies to provide services around the island for vising yachts and recreational craft. Boating tourism development will spur a variety of subsectors, namely water sport rental, in-land boat hire, sailing schools and training and whale and dolphin watching.

However, the industry faces constraints that need to be addressed in the short-to-medium term in order to facilitate rapid industry growth. Updating regulatory frameworks, providing marketing and promotion support, expanding existing capacity of boatyards and dockyards and improving overall industry coordination will create an enabling environment for boat industry development.

the following key interventions are priorities to facilitate the implementation of the strategy :

� Urgently develop the regulatory framework for naviga-tion of recreational craft to attract boats traversing the Indian Ocean.

� Allocate land for boat building and repair clusters in existing and new waterfront Board of Investment of Sri Lanka ( BOI ) zones.

� Establish a national boat industry association to act on behalf of the industry and to represent all stakeholders.

The following delineates the proposed vision and strate-gic objectives of this Strategy. This vision statement was agreed upon by all stakeholders in the boat building value chain in Sri Lanka :

“ Sri Lanka : Boat building and Maritime Tourism Hub in the Indian Ocean ”

The Strategy’s Plan of Action ( PoA ) responds to this vision by addressing the sector’s constraints and leveraging op-portunities in a comprehensive manner. To this end, specif-ic efforts will be made in the following strategic directions :

• Regulatory frameworks for the boat industry should be adopted and implemented to ensure effective operations in the sector.

Strategic objective 1: To create an enabling environment for industry

development by updating regulations and infrastructure

• Improved supply chain performance and sector coordination will respond to urgent industry needs in terms of skills, R&D, technology trasfer and overall strategic planning for sector developement.

Strategic objective 2: To raise the industry’s performance through

partnerships and targeted innovation

• Strenghtening industry marketing, promotion and branding will bring national and international recognition of the Sri Lankan boat industry.

Strategic objective 3: To enhance national and international visibility of

Sri Lanka’s boatbuilding industry

coordinating activities, monitoring progress and mobi-lizing resources for implementation will be critical to suc-cessful achievement of these targets. To that effect, a public-private ‘advisory committee’ for boat building was established, operationalized and empowered. The boat building ‘advisory committee’ is now responsible for overall coordination, provision of policy guidance and monitoring of industry developments in relation to the Strategy.

an effectively organized and supported industry commit-tee will plan development strategically. High-level support from the Government, in collaboration with strong champi-onship by the private sector, will be the real drivers to truly make sri Lanka a renowned boating destination in asia.

Page 13: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

3

[ a GLOBaL iNDustry OPENiNG DOOrs tO NEw BOat maNuFacturErs ]

A GLOBAL INDUSTRY OPENING DOORS TO NEW BOAT

MANUFACTURERS

The rich and complex boat building processes require a long value chain that involve numerous high-skilled ac-tors. These actors include naval engineers, interior design-ers, material workers ( for composites, aluminium, wood, steel, etc. ), wood carpenters, painters, coating applicators, mechanics, sail makers, IT technicians and suppliers ( such as for electronics, plumbing, engines and deck wares ). In a highly competitive market, a workforce with strong tech-nical skills is essential to a boat manufacturing company. Globally, the boat building is quite important : its two main manufacturing segments, boats and marine equipment, are comprised of 100,000 direct companies ( primarily small and medium-sized enterprises ), one million direct employees and more than US $ 50 billion in manufacturing turnover. On average, one direct employee in the industry generates seven additional indirect employment opportunities.

in an age marked by instability in the global economy, the boat trade can be sensitive to fluctuations in the main so-cioeconomic indicators. After two decades of constant boat industry growth, the 2008 global crisis hit the boat building sector ( see figure 1 ). Post-crisis recovery for the industry occurred faster in the United States of America than in the European market. While the American market began to grow again in 2011, reaching pre-crisis turnover levels in 2016, in Europe the recovery was slower and lower. Some coun-tries suffered from a second drop in turnover in 2011/ 2012, and the main markets showed reliable signs of improvement only from 2014.

Figure 1 : Global boat production turnover ( Eur, billions )

1999 2006 2008 2014 2016

15

23 25

1720?

largedrop slow

recovery

source : Deloitte ( 2016 ).

Page 14: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

4

[ SRI LANKA BOAT BUILDING STRATEGY ]

the united states remains the leader in boat manufactur-ing, followed by five European countries. With almost 43 % of global production, the United States’ leadership in boat manufacturing is evident. Five European countries follow in the ranking : Italy, the United Kingdom of Great Britain and Northern Ireland, the Netherlands, Germany and France. The United States produces 70 % of all outboard boats, with France the leader in sailboat production, representing 32 % of the total. In the inboard and rigid inflatable boat segments,

the United States and Italy are the strongest players. China is becoming an important boat manufacturer, with a spe-cific specialisation in smaller craft, such as outboard and inflatables. The top manufacturing groups are Brunswick Cooperation in the United States; Azimut-Benetti, Sanlorenzo S.P.A and Ferretti Group in Italy; Bénéteau in France and Sunseeker International and Princess Yacht International in the United Kingdom.

Figure 2 : Global boat production share ( 2014 ) ( % )

0,8%

0,0%0,7%

0,0%0,3%0,5%0,2%

Inboard Outboard Sailboards RIBs Total

Rest ofworldChinaFranceGermanyNetherlandsUKItaly

US

100%

17,1%

3,2%8,8%8,9%9,5%

14,7%

37,0%

100%

18,7%

10,3%0,5%

69,6

100%

17,1%

5,7%

32,1%

9,2%8,8%9,3%7,1%10,8%

100%

21,4%

13,7%

9,9%7,1%

19,8%

27,4%

100%

17,6%4,1%5,7%6,4%6,5%6,9%10,0%

42,8%

source : Deloitte ( 2016 ).

Figure 3 : Geographical localization of the boat building companies by turnover

source : UCINA and Fondazione Edison ( 2017 ).

Page 15: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

5

[ a GLOBaL iNDustry OPENiNG DOOrs tO NEw BOat maNuFacturErs ]

Emerging economies with the most important boat manu-facturing industries lack domestic demand and require ex-port markets. Asia-Pacific, South America, Gulf and Middle East countries represent growing demand. Four major areas are considered developing markets ( see figure 4 ) :

� Brazil and the Russian Federation had good potential but are currently in decline;

� South Africa is a good but small market; and � Gulf and Middle East countries are considered the most

promising markets, although the consumers targeted are mainly in the luxury segment.

Emerging markets with growing manufacturing capacities and certain demand, apart from a few countries in South America, such as Argentina and Colombia, are all located in Asia :

� China is already one of the most important manufacturing countries but lacks wide consumer interest in boating in the domestic market;

� The Republic of Korea may become a strong consumer market in the next few years; and

� Development in South-East Asia, India and Sri Lanka could take a little longer, due to the absence of marina infrastructure and the lack of a boating culture among consumers.

Figure 4 : Classification of worldwide boating markets

source : ICOMIA.

Photo: © Neil Marine

Page 16: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

6

[ SRI LANKA BOAT BUILDING STRATEGY ]

Global exports of recreational crafts are dominated by European countries. Italy, with US $ 1.9 billion in exports, provides 14.5 % of global boat building exports ( figure 5 ). The Netherlands takes second place with a share of 13.9 %

of world exports, followed by Germany, the United States, France and the United Kingdom ( see table 1 ). These five countries are responsible for about 60 % of global produc-tion and export of recreational craft.

Table 1 : Global exports in boat production, 2016 ( us $ millions )

rank country Inflatables sailboats inboard Outboard total

1 Italy 54.8 41.7 1 793.7 35.9 1 926.1

2 Netherlands 5.0 252.7 1 571.4 15.2 1 844.2

3 Germany 5.0 154.4 1 234.4 16.0 1 409.8

4 United States 13.2 41.6 610.4 656.0 1 321.3

5 France 25.6 594.5 488.1 27.4 1 135.7

6 United Kingdom 19.0 90.0 871.5 12.1 992.7

7 Mexico 3.8 0.0 509.3 31.0 544.1

8 Poland 4.7 14.0 53.0 301.1 372.9

9 China 123.3 10.8 31.0 136.0 301.1

10 Finland 0.01 88.4 103.7 71.8 263.9

source : Processed data for the UCINA yearly statistics book, based on ITC and United Nations Comtrade

– Harmonized System ( HS ) 2012 classification, 8903 codes.

Figure 5 : Global export trends in boat production, 2001–2016 ( us $ , millions )

4.000.000

3.000.000

2.000.000

1.000.000

0

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Italy NetherlandsGermany United States of America

source : ITC and United Nations Comtrade, HS 2012 classification, 8903 code.

with global demand growing and economic recovery ex-pected to continue, the international boat trade offers many opportunities to manufacturing companies, espe-cially in the face of shrinking or absent domestic demand. The main opportunities lie in finding new markets and cus-tomers for existing products and showing new products in traditional markets, where customers’ willingness to upgrade their boat or change product could present new export

possibilities. The last available survey among members of the International Council of Marine Industry Associations ( ICOMIA ), on turnover trends in the first six months of 2017 showed significant growth in traditional markets in Europe and North America, a decrease in South America and in Turkey and general stability in the rest of the world ( see figure 6 ).

Page 17: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

7

[ a GLOBaL iNDustry OPENiNG DOOrs tO NEw BOat maNuFacturErs ]

Figure 6 : Market trends for first six months of 2017

source : ICOMIA.

immensely popular in many developed countries, boat-ing is affordable for most middle-income earners. Over the past ten years, trends have emerged that should be consid-ered in strategic planning :

� Boaters’ demography : traditional markets like Europe have an ageing customer base, which confirms the need to attract newcomers to boating.

� Boat owner patterns : newcomers to boating are inter-ested in sailing but prefer to rent rather than own, which opens opportunities for charter services, boat sharing and peer-to-peer boat rental.

� Design trends demand : Boat shape, design and size vary depending on the individual customer, as seen in the rise in the super-and mega-yacht segment in high income countries.

For a boat manufacturer, understanding demand in a tar-get market is essential to supplying the right product, as different boat usage habits and traditions require new boat designs and uses. The interdependent businesses in the boat building industry, including in the marine industry and in boating tourism, offer opportunities in the full range of ma-rina equipment businesses and services.

Summary

• The global boat building is recovering after the post-crisis drop, with increasing demand for recreational boating in the United States and in EU markets. Asia-Pacific, South American, Gulf and Middle East countries represent growing demand for different types of boats.

• Southeast Asia – which is the fastest growing region in the world and is close to emerging markets in Asia, Africa, and South America – offers many opportunities for boat manu-facturers and charter companies.

• Top global manufacturers have lengthy experience and established market entry channels.

• Emerging economies with important boat manufacturing industries lack domestic demand and need export markets.

• Immensely popular in many developed countries, boating is affordable for most middle-income earners.

• Understanding demand in a target market is essential if a boat manufacturer is to supply the right products and to perform successfully in diverse markets.

Page 18: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

Photo: ©Ranil Marine

Page 19: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

9

[ a sri LaNKaN iNDustry DrivEN By a FavOuraBLE stratEGic POsitiON aND DEvELOPiNG tOurism sEctOr ]

A SRI LANKAN INDUSTRY DRIVEN BY A FAVOURABLE STRATEGIC

POSITION AND DEVELOPING TOURISM SECTOR

a long boat experience and a strategic geographical loca-tion give sri Lanka advantages that can help the country become an important maritime hub in the indian Ocean. The boat industry in Sri Lanka has a long and continually evolving history. Boat building currently accounts for about 1 % of the total value of Sri Lanka’s exports. Some of the best natural harbours in Asia, a strategic location on the maritime crossroads of the Indian Ocean and experienced manufac-turers give Sri Lanka advantages for further industry devel-opment. Currently, only 22 of the 47 registered boat yards export. The industry currently provides full-time direct em-ployment to over 2,000 individuals and the sector generates 10,000 indirect jobs.

Enterprises operating in the boat building industry in sri Lanka produce various types of vessels, with different codes within the Harmonized Commodity Description and Coding System ( HS ), for different markets :

� Recreational boats ( HS 8901, HS 8903 ) are the most ex-ported products in the boat building sector, with a com-bined exported value in 2016 of more than US $ 65 million. Annual growth rate for motor boats and yachts between 2012 and 2016 was 155 %.

� Fishing boats ( HS 8902 ) are the third most exported products in the boat building sector. The export value of fishing boats in 2016 was US $ 2 million, with an annual growth rate of 66 %.

� The exported value of merchant boats ( HS 8904, HS 8905, HS 8906 ), including tugs and pusher crafts, dredg-ers, floating platforms, lifeboats, light vessels coastguard boats, etc., was around US $ 5 million in 2016.

Boat parts and other maritime industry equipment, namely sails for boats ( HS 6306 ), are produced in Sri Lanka and are the most exported segments of the boat building sector. In 2016, the export value for these products reached US $ 29 million with an annual growth of 9 % in 2012-2016. Since 2015, Sri Lanka has been the number one global exporter of boat sails. Other maritime industry equipment produced and exported are water-skis, surfboards and sailboards ( HS 9506 ).

services related to recreational boating ( such as repair, refit, scrapping and other maintenance or marina related services ) also contribute to the industry. However, these services are not regularly provided in Sri Lanka and there is no data available on their impact on the boat building.

Photo: © Boat Building Technology Improvement Institute

Page 20: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

10

[ SRI LANKA BOAT BUILDING STRATEGY ]

Table 2 : List of exported products in boat building industry and export value, 2016

Name Namevalue exported in 2016

( us $ , thousands )

Cruise ships, excursion boats, ferryboats, cargo ships, barges and similar vessels for the transport of persons or goods ( HS8901 )

890110 Cruise ships, excursion boats and similar vessels principally designed for the transport of persons; ferryboats of all kinds

321

890190 Vessels for the transport of goods and vessels for the transport of both persons and goods ( excluding refrigerated vessels, tankers, ferryboats and vessels principally designed for the transport of persons )

53 253

Fishing vessels; factory ships and other vessels for processing or preserving fishery products ( excluding fishing boats for sport ) ( HS8902 )

890200 Fishing vessels; factory ships and other vessels for processing or preserving fishery products ( excluding fishing boats for sport )

2,012

Yachts and other vessels for pleasure or sports; rowing boats and canoes ( HS8903 )

890310 Inflatable vessels for pleasure or sports 34

890391 Sailboats and yachts, with or without auxiliary motor, for pleasure or sports

235

890392 Motor boats and motor yachts, for pleasure or sports ( other than outboard motor boats )

10 210

890399 Vessels for pleasure or sports; rowing boats ( excluding motor boats and motor yachts powered other than by outboard motors, sailboats and yachts with or without auxiliary motor and inflatable boats )

55

Tugs and pusher craft ( HS8904 ) 890400 Tugs and pusher craft 6

Light vessels, fire-floats, dredgers, floating cranes, and other vessels the navigability of which is subsidiary to their main function; floating docks, floating or submersible drilling or production platforms ( excluding fishing vessels and warships ) ( HS8905 )

890510 Dredgers 1 110

890520 Floating or submersible drilling or production platforms

1 525

890590 Light vessels, fire-floats, floating cranes and other vessels, the navigability of which is subsidiary to their main function ( excluding dredgers, floating or submersible drilling or production platforms; fishing vessels and warships )

63

Vessels, incl. warships and lifeboats ( excluding rowing boats and other vessels of heading 8901 to 8905 and vessels for breaking up ) ( HS8906 )

890610 Warships of all kinds

890690 Vessels, incl. lifeboats ( excluding warships, rowing boats and other vessels of heading 8901 to 8905 and vessels for breaking up )

1 559

Rafts, tanks, coffer-dams, landing stages, buoys, beacons and other floating structures ( excluding vessels of heading 8901 to 8906 and floating structures for breaking up ) ( HS8907 )

890710 Inflatable rafts 4

890790 Rafts, tanks, coffer-dams, landing stages, buoys, beacons and other floating structures ( excluding inflatable rafts, vessels of heading 8901 to 8906 and floating structures for breaking up )

207

Vessels and other floating structures for breaking up ( HS8908 )

890800 Vessels and other floating structures for breaking up

1

Tarpaulins, awnings and sun blinds; tents; sails for boats, sailboards or land craft; camping ( HS6306 )

630630 Sails for boats, sailboards or land craft, of textile materials

29 995

Articles and equipment for general physical exercise, gymnastics, athletics, other sports ( HS9506 )

950629 Water-skis, surfboards and other water sport equipment ( other than sailboards )

19 118

950621 Sailboards 2 700

source : ITC calculations based on United Nations Comtrade statistics.

Page 21: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

11

[ a sri LaNKaN iNDustry DrivEN By a FavOuraBLE stratEGic POsitiON aND DEvELOPiNG tOurism sEctOr ]

As the boat building sector includes sales of unique and expensive boats, trade of boat building products has been characterized by large fluctuations. The highest val-ue exports occurred in 2011-2012. This was followed by an abrupt fall in 2012-2013 but exports increased the follow-ing year. The change in export growth indicates that ex-porters diversified with new products in new markets while continuing to export traditional products to existing markets ( see figure 7 ). While 166 % of the growth in exports is linked to selling new products to new markets, 14 % of growth aris-es from supplying existing products to traditional markets.

sri Lankan boat exports lag behind those of its regional competitors but it remains a leader in the export of motor boats and motor yachts, for pleasure or sport. Compared to Southeast Asian peers ( see figure 8 ), the industry faces

competition primarily in vessels for transportation ( India, the Philippines, Viet Nam ) and fishing vessels ( Viet Nam ). However, the Sri Lankan export basket differs from its re-gional peers in Southeast Asia. It is a leader in motor boat and yacht exports among its regional peers and remains the primary exporter of boat sails in the world.

the low rate of sri Lanka export survival in the boat sec-tor indicates fluctuating export relationships and several supply capacity challenges. Export survival for Sri Lanka is low compared to its regional peers ( see figure 9 ). Compared to regional peers for boat manufacturing, Malaysia, Thailand and China have higher export survival rates. Sri Lanka man-ufactures high quality products and the industry can easily meet buyers’ requirements and preferences but low technol-ogy use and high manual labour inputs limit boat production.

Figure 7 : Trade flows and balance and analysis of export growth

150

100

50

0

-50

-100

2000Year

Exports & Imports (Boat Building)LKA

Exports ImportsTrade Balance

US D

olla

rs. M

illion

s

2005 2010 2015

1.50

1.00

0.50

0

0.00

-0.50

Decomposition of Export GrowthLKA, Boat Building 2006-16

Old Prods to Old Mkts New Prods to New MktsFall Olds Prods to Old Mkts New Prods to Old MktsExtinct Old Prods to New Mkts

%

0.14

1.66

-0.13

-0.67

source : ITC calculations based on United Nations Comtrade.

Figure 8 : Regional exports of ships, boats and floating structures ( HS-89 ), 2012–2016 ( US $, millions )

0

1.000.000

2.000.000

3.000.000

4.000.000

5.000.000

2012 2013 2014 2015 2016 India Thailand Philippines Indonesia Viet Nam Malaysia Sri Lanka

source : ITC calculations based on United Nations Comtrade. Photo: © Boat Building Technology Improvement Institute

Page 22: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

12

[ SRI LANKA BOAT BUILDING STRATEGY ]

Figure 9 : Probability of survival of boat building export relationships compared to regional peers, 2002–20161

,9,8

,7,6

,5

Prob

abilit

y

,4,3

,2,1

0

1 2

LKAIDNMYS

Probability of Export Survival, 2002-16Boat Building

INDTHACHN

3 4 5 6 7 8

Year

9 10 11 12 13 14 15 16

source : ITC calculations based on United Nations Comtrade and ITC statistics.

sri Lanka’s boat exports increased rapidly in the last dec-ade, growing at an average annual rate of 17.94 % ( see figure 10 ). In the last five years, exports have grown by 44.64 % an-nually, with transportation vessels for both people and goods representing most of this growth ( 78 % ). In recent years, ex-ports of pleasure and sport motorboats have grown fastest and now represent 15 % of total exports.

Figure 10 : sri Lanka total exports of boats and ships, 2005–2016 ( us $ , millions )

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

160.000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Inflatable yachts and rowing boats for sports Floating structures

Other yachts and other vessels for sports Sailboats for pleasure or sports

Cruise ships, excursion boats

Other vessels, including lifeboats

Fishing vessels

Motorboats for pleasure or sports

Vessels for the transport of persons and goods

source : Information Technology Division/EDB.

Page 23: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

13

[ a sri LaNKaN iNDustry DrivEN By a FavOuraBLE stratEGic POsitiON aND DEvELOPiNG tOurism sEctOr ]

most boat industry export growth was achieved by in-creasing exports to traditional markets. Table 3 confirms that Sri Lanka’s boat exports remain concentrated in the Indian and Singaporean markets. Exports of boats to India grew in the last five years at an average annual growth rate of 7 %, while export to Singapore declined by 1 %. New mar-kets such as the EU, Maldives, Nigeria, the United Arab Emirates, the Seychelles and the Comoros show impres-sive growth rates. There are relatively few exports to Africa and the Middle East.

Both boat manufacturing and creating links with other sectors in the value chain are key opportunities for the boat industry. Related segments include :

� Marine materials and equipment : marine electronics and marine-related software, interior equipment, furnishing, electrical materials and fittings, machinery, propulsion units, mechanical systems, resins, paints and rubber accessories;

� Servicing : refuelling, refit, maintenance, after-sales; � Tourism : maritime tourism, charter and marina services; � Regional water transportation services : coastal ferry ser-

vices ( regional : Bangladesh, India; national : Jaffna pen-insula, Trincomalee ); and

� Domestic water transportation services : canal transporta-tion ( improve for passengers ).

Photo: © Neil Marine

Page 24: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

14

[ SRI LANKA BOAT BUILDING STRATEGY ]

Table 3 : the sri Lanka’s export destinations and main exported items

importersvalue exported in 2016 ( us $ ,

thousands )

share in sri Lanka’s

exports ( % )

annual growth in value

between 2012-2016

( % p.a )

main exported items

India 33 870 48.0 7 • Vessels for the transport of goods and both persons and goods

• Motorboats for pleasure or sport, other than outboard motorboats

Singapore 25 326 35.9 -1 • Vessels for the transport of goods and both persons and goods

Nigeria 1 175 1.7 70 • Other vessels, including warships and lifeboats other than rowing boats

United Arab Emirates

1 117 1.6 - • Motorboats for pleasure or sport, other than outboard motorboats

Seychelles 1 073 1.5 21 • Fishing vessels; factory ships, etc., for processing/pre-serving fish

Comoros 744 1.1 - • Fishing vessels; factory ships, etc., for processing/pre-serving fish

• Floating structure

Netherlands 554 0.8 -16 • Vessels for the transport of goods and both persons and goods

• Motorboats for pleasure or sport, other than outboard motorboats

• Other vessels, including warships and lifeboats other than rowing boats

Maldives 422 0.6 105 • Vessels for the transport of goods and both persons and goods

• Fishing vessels; factory ships, etc., for processing/pre-serving fish

• Yachts and other vessels for pleasure or sport

• Inflatable yachts for pleasure

source : Information Technology Division/Sri Lanka EDB.

Summary

• Sri Lanka’s location on South Asia’s main maritime routes and the country’s boat building experience make Sri Lanka an attractive maritime hub that can provide a full range of services for a boat’s entire life-cycle.

• Existing boat manufacturers produce diversified products with different levels of quality to meet the needs of various markets.

• Sri Lanka remains an export leader among Southeast Asian countries for motor boats and motor yachts, both for pleasure and sport, and globally is the number one exporter of boat sails.

• Most export growth has been achieved by increasing exports to traditional markets.

• Key opportunities exist not only in boat manufacturing but also in creating links with other sectors to service the com-plete boat building value chain.

Page 25: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

15

[ vaLuE cHaiN DiaGNOstics ]

VALUE CHAIN DIAGNOSTICS

Value chain analysis enables a better understanding of the dynamics and issues affecting industry performance.

Photo: (ITC) – Neil Marine

Page 26: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

16

[ SRI LANKA BOAT BUILDING STRATEGY ]

Figure 11 : Boat building industry value chainIn

puts

Asse

mbl

yM

arke

ts

Resi

nsM

ater

ials

Sails

Expo

rts

of p

arts

(sai

ls fo

r boa

ts)

Regi

ster

ed47

priv

ate

boat

yar

ds(1

0 ex

port

ers)

2 do

cks

yard

s(1

pro

vide

s ex

port

s se

rvic

e)M

achi

nery

repa

irs, H

alf r

epai

rs,

Prop

elle

r rep

airs

, Ele

ctric

al re

pairs

,El

ectro

nic

and

auto

mat

ion

repa

irs,

Carg

o ge

ar re

pairs

,In

tern

al ta

nk, c

argo

hol

d bl

astin

g an

d co

atin

g,In

stal

latio

n of

bal

last

wat

er tr

eatm

ent s

yste

ms

Boat

s w

ith o

utbo

ards

eng

ines

*50

%**

Natio

nal m

arke

t(b

oats

for f

ishi

ng, t

rans

port

atio

n an

d to

uris

m in

dust

ry)

Inte

rnat

iona

l mar

ket

Vess

els

for t

rans

port

74%

Vess

els

for t

rans

port

99%

Vess

els

for t

rans

port

20%

Vess

els

for t

rans

port

90%

Mot

or b

oats

and

yac

hts

26%

Mot

or b

oats

and

yac

hts

30%

Mot

or b

oats

and

yac

hts

3%

Mot

or b

oats

and

yac

hts

100%

Mot

or b

oats

and

yac

hts

1%

Fish

ing

vess

els

100%

Fish

ing

vess

els

99%

Fish

ing

vess

els

7%

Boat

s w

ith in

boar

d en

gine

s47

%

Sail

2%

Infla

tabl

e (R

IBs)

1%

*Eac

h ty

pe o

f boa

t has

its

own

valu

e ch

ain

**Sh

are

in u

nits

**Va

lues

for 2

016

Mas

tHu

lls

Auxi

liary

/Com

man

d sy

stem

s(3

0% im

port

ed)

Outfi

tting

(80%

impo

rted

)

Safe

ty a

nd li

fesa

ving

(98%

impo

rted

)

Equi

pmen

t

Supp

ort s

ervi

ces

Lege

nd

Engi

nes

CINE

CBT

I Tra

inin

g Ce

ntre

Priv

ate

Inst

itute

sOt

her U

nive

rsity

Ocea

n Un

iver

sity

Mor

atuw

a Un

iver

sity

Nava

l & M

ariti

me

Acad

emy

Natio

nal c

ompo

nent

Inte

rnat

iona

l com

pone

ntM

ixed

com

pone

nt

Prop

elle

rs, s

haft

Woo

d

Skill

ed la

bour

coat

ing

appl

icat

ors,

fibr

egla

ss te

chni

cian

s,ca

rpen

ters

, wel

ders

, fitt

ers

elec

trica

l eng

inee

rs, e

lect

roni

cs re

paire

rs

Mar

ine

equi

pmen

t(7

0% im

port

ed)

Fibr

egla

ss

Pain

ts a

nd c

oatin

gs

Mar

ine

pipe

sTe

xtile

Stee

lAl

umin

ium

Step

s fo

r bui

ldin

g a

boat

:1.

Des

ign

2. C

uttin

g th

e pa

nels

, fra

mes

3. F

ibre

glas

s co

verin

g4.

Put

ty a

nd ta

ping

sea

ms

5. P

aint

ing

and

coat

ing

6. P

uttin

g pr

opul

sion

(eng

ines

,

prop

elle

rs, s

hafts

)7.

Add

ing

inte

rior e

quip

men

t,

furn

ishi

ng, e

lect

rical

fitti

ngs

US U

S$12

.3 m

illion

Indi

aUS

$34

milli

on

Life

boat

s 10

0%

Life

boat

s 50

%

Sing

apor

eUS

$25

milli

on

Nige

riaUS

$1.2

milli

on

UAE

US$1

.1 m

illion

Seyc

helle

sUS

$1 m

illion

Com

oros

US$7

44,0

00

Neth

erla

nds

US$5

56,7

99

Mal

dive

sUS

$422

,809

Fran

ce U

S$2.

5 m

illion

Cana

da U

S$1.

1 m

illion

UK U

S$5.

1 m

illion

Aust

ralia

US$

1.5

milli

onIta

ly U

S$1

milli

on

Page 27: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

17

[ vaLuE cHaiN DiaGNOstics ]

Table 4 : Long list of constraints faced by the boat industry value chainIn

suffi

cien

t inf

rast

ruct

ure

and

faci

litie

s lim

it pr

oduc

tion

expa

nsio

n:•

Lim

ited

acce

ss to

land

to e

xpan

d pr

oduc

tion

and

laun

ch la

rger

boa

ts (o

ver 2

0 m

etre

s in

leng

th) f

or e

xpor

t acc

ess:

land

in c

oast

al a

reas

ow

ned

by th

ree

orga

niza

tions

(Por

ts A

utho

rity,

Fi

sher

ies

Harb

ours

Coo

pera

tion

and

the

Navy

), w

hich

are

not

rele

asin

g th

e la

nd•

Abs

ence

of t

estin

g fa

cilit

ies

for n

ew p

rodu

cts

deve

lopm

ent f

or b

oat b

uild

ing

• N

o de

dica

ted

BOI z

one

with

wat

er a

cces

s fo

r boa

t ind

ustry

Inco

nsis

tent

sup

ply

chai

n ch

alle

nges

acc

ess

to q

ualit

y in

puts

:•

Abs

ence

of m

ariti

me

supp

liers

bon

ded

war

ehou

ses

• F

ew lo

cal s

uppl

ier

• D

iffic

ultie

s to

find

relia

ble

over

seas

pro

vide

rs

• I

mpo

rt tim

e is

on

aver

age

1 m

onth

Lim

ited

dial

ogue

bet

wee

n ac

adem

ia a

nd b

oat b

uild

ing

com

pani

es:

• L

imite

d R&

D pr

oduc

t dev

elop

men

t and

inno

vatio

n•

Lim

ited

num

ber o

f tra

inin

g pr

ogra

mm

es fo

r and

sho

rtage

of t

echn

icia

ns, c

oatin

g ap

plic

ator

s, fi

breg

lass

tech

nici

ans,

ca

rpen

ters

, wel

ders

and

fitte

r s•

Low

aw

aren

ess

by u

nive

rsity

stu

dent

s an

d gr

adua

tes

abou

t car

eer o

ppor

tuni

ties

in th

e bo

at b

uild

ing

indu

stry

Wea

k co

ordi

natio

n am

ong

stak

ehol

ders

: •

Lim

ited

awar

enes

s by

pub

lic a

utho

ritie

s ab

out t

he e

cono

mic

impo

rtanc

e of

the

boat

bui

ldin

g in

dust

ry•

Ine

ffici

ent s

trate

gic

plan

ning

for s

ecto

r dev

elop

men

t and

impl

emen

tatio

n of

pol

icie

s

Lim

ited

linka

ges

with

tour

ism

indu

stry

:•

No

fully

ope

ratio

nal m

arin

as fo

r yac

hts

and

plea

sure

cra

ft av

aila

ble

acro

ss th

e is

land

• L

imite

d bo

atin

g to

uris

m p

rom

otio

n

Lim

ited

bran

ding

and

mar

ketin

g pr

omot

ion:

• A

bsen

ce o

f a b

rand

ing

stra

tegy

for t

he b

oat i

ndus

try

• L

imite

d ad

verti

sing

and

sho

wca

sing

of s

ucce

ss s

torie

s •

Abs

ence

of a

sin

gle

web

site

pro

vidi

ng in

form

atio

n ab

out S

ri La

nkan

pro

duct

s, m

arin

e se

rvic

es, b

oat

show

s an

d fe

stiv

als

• I

nsuf

ficie

nt p

artic

ipat

ion

in re

gion

al a

nd in

tern

atio

nal

boat

sho

ws

and

even

ts

Low

tech

nolo

gica

l and

mec

hani

zatio

n ad

optio

n re

sults

in

lim

ited

prod

uctio

n:•

Hig

h co

st o

f mac

hine

ry•

Low

aw

aren

ess

and

lack

of c

ost-

effic

ient

ana

lysi

s•

Lim

ited

tech

nolo

gica

l ski

lls

• L

ack

of jo

int v

entu

res

to c

ombi

ne e

fforts

• L

ack

of R

&D

and

know

ledg

e sh

arin

g

Inpu

tsAs

sem

bly

Mar

ket e

ntry

Hig

h ch

arge

s fo

r im

port

ing

mat

eria

ls:

• H

igh

Cust

oms

dutie

s on

impo

rt pr

oduc

ts if

pro

duce

d in

Sr

i Lan

ka (F

RP is

dut

y fre

e, o

ther

inpu

ts 1

5% d

uty)

• M

ultit

ude

of le

vies

: Por

ts a

nd A

irpor

t Dev

elop

men

t ces

s,

VAT

and

NBT

for i

mpo

rted

mat

eria

ls a

nd m

anda

tory

ro

yalty

app

licab

le fo

r com

pute

r-ai

ded

desi

gn o

utsi

de S

ri La

nka

Leng

thy

proc

ess

for

boat

reg

istr

atio

n:•

Lac

k of

sin

gle

Gov

ernm

ent

agen

cy o

r dep

artm

ent

resp

onsi

ble

for b

oth

boat

regi

stra

tion

and

impl

emen

ta-

tion

of th

e re

gula

tory

fram

ewor

k

Lim

ited

mar

ket i

nfor

mat

ion

on p

rice,

qua

lity

and

com

petit

ors

hind

ers

stra

tegi

c pl

anni

ng fo

r ind

ustry

de

velo

pmen

t

Indu

stry

per

form

ance

issu

esRe

gula

tory

and

pol

icy

issu

esIn

stitu

tiona

l and

coo

rdin

atio

n is

sues

Lege

nd:

Insu

ffici

ent r

egul

ator

y fr

amew

ork

for b

oat b

uild

ing

indu

stry

:•

Nat

iona

l rec

reat

iona

l boa

t bui

ldin

g re

gula

tions

are

not

ava

ilabl

e•

Lac

k of

regu

lato

ry fr

amew

ork

for t

he n

avig

atio

n of

recr

eatio

nal c

raft

• L

ack

of e

stab

lishe

d re

gist

ratio

n pr

oced

ures

for r

ecre

atio

nal b

oats

• L

ack

of s

tand

ardi

zatio

n an

d qu

ality

ass

uran

ce s

yste

ms

Page 28: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

18

[ SRI LANKA BOAT BUILDING STRATEGY ]

FOCUSING ON THE MOST PRESSING ISSUES

Extensive stakeholders’ consultations, field visits and litera-ture reviews revealed numerous constraints in the boat build-ing sector that challenge its short and medium-term growth. To ensure the Strategy is efficient and precise, only the most critical bottlenecks are detailed below.

INPUTS ISSUES

Production of and access to affordable inputs has a major impact on the industry’s production capacity, cost and qual-ity. Principal inputs for boat building are construction ma-terials such as steel, aluminium, resins, fibreglass, paints, coatings, marine pipes, wood and textiles for sails; oper-ational equipment such as engines, propellers, and com-mand systems and other equipment needed for outfitting, safety, lifesaving and marine operations. Currently, most in-puts are imported. A few resin, paint and coating factories produce materials locally but the quality does not meet glob-al maritime industry standards. Local production of sails, masts, and hulls use imported inputs. Propulsion systems are made with imported engines such as Daewoo, Yamaha, Volvo, Suzuki or Caterpillar.

Inconsistent supply chain challenges the access to quality inputs

An efficient supply chain is needed for successful devel-opment of the boat industry. There is no input suppliers’ ecosystem in Sri Lanka; this challenges efficient industry growth. Leading manufacturers rely on imports, since many local input producers struggle with quality. Finding reliable overseas providers and long import timelines also are prob-lematic. There are challenges with duty rebates for non-BOI companies, since marine industry inputs are categorized as construction materials, and there are no appropriate codes at the HS eight-digit level. Additionally, there are no bonded warehouses where boat industry materials can be stored in appropriate conditions; each company must have its own refrigerated facilities to store resins, paints, coatings, etc. Growths is limited by insufficient promotion of foreign direct investment ( FDI ) and joint venture ( JV ) opportunities to at-tract companies interested in producing better quality – and sufficient quantities of – inputs. This also constrains links to other industries that could provide electrical and electronic machinery and fully or partially manufactured boat engines and accessories.

The following constraints are addressed in PoA : 2.1.1, 2.1.3.

Insufficient infrastructure facilities limit production expansion

Several yards do not have direct access to water for launch-ings, while roads to existing launch areas are inadequate. Three organizations own the land in coastal areas : Ports Authority [ Ministry of Ports and Shipping ( MoPS ) ], Ceylon Fishery Harbours Corporation and the Sri Lanka Navy [ Ministry of Defence ( MoD ) ]. The Board of Investment of Sri Lanka ( BOI ) has few EPZs with access to sea and avail-able space. The change of Government stopped initiatives to release land for marina creation and currently there is no directive on releasing land to expand the boat industry. BOI has not yet requested the release of EPZ land to the private sector and the procedure to make this request is unknown.

The following constraints are addressed in PoA : 1.3.1, 1.3.2, 1.3.3, 2.1.2.

Insufficient dialogue between academia and boat building companies results in a shortage of trained labour and limited awareness about career opportunities in the industry

Due to limited industry-academia coordination, there is a limited number of training programmes and technical and vocational education and training ( TVET ) institutions and universities oriented to the sector. The industry is short on technicians, namely coating applicators, fibreglass tech-nicians, carpenters, welders, and fitters. There is limited awareness about job opportunities in the industry and tech-nicians choose other sectors. Overall, there is low interest and no willingness to spend time to train or to undertake physical labour.

The following constraints are addressed in PoA : 2.2.1, 2.2.2., 2.2.3.

Photo: © Neil Marine

Page 29: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

19

[ vaLuE cHaiN DiaGNOstics ]

MANUFACTURING AND ASSEMBLY ISSUES

Low technological and mechanization adoption result in limited production volume

Slow technological transfer and limited use of innovative manufacturing technologies strain production capacities and investment in new products. The low usage of modern tech-nologies in the boat industry is caused by a variety of factors, including limited access to the capital, insufficient technol-ogy skills and a lack of analysis on return-on-investment. A key constraint is the fragmented industry structure, with numerous small players that do not combine efforts, share knowledge and invest together in research and develop-ment ( R&D ). For instance, recreational boating manufacture was never considered a potential market due to ignorance of business opportunities in leisure boat manufacturing.

The following constraints are addressed in PoA : 2.1.1, 2.1.3, 2.3.1, 2.3.2.

Lack of standardization and quality assurance systems jeopardise the safety and quality of boats produced and operated in the country

Standardization mechanisms for the entire value chain of the boat industry in the country is lacking. Small boat build-ers do not adhere to industry standards and supply inferior quality products to foreign buyers at low prices. Most Sri Lankan passenger boats do not fulfil basic safety require-ments. Obtaining certification from an international private conformity assessment body is costly for small producers. At national level, there is no specific standard for boat man-ufacturing. National regulation aligned to internationally rec-ognized technical standards (American, Australian or EU) would ensure boat safety, prevent inferior quality boats from entering the country and allow manufacturers to export high quality boats to any market.

The following constraints are addressed in PoA : 1.1.2.

MARKET ENTRY ISSUES

Limited marketing and promotion activities hinders international recognition of the boat building industry

The low level of advertising, marketing and promotion ac-tivities for the boat building is caused by various factors. An important reason is the lack of a single website provid-ing information about Sri Lanka’s manufacturers, products and available marine services. Even at national level, there is no showcase for success stories of industry development. The Sri Lanka Boat Show started recently and is planned to be held every two years.

An important aspect of industry promotion is participation in regional and international boat shows. Companies have limited resources to participate regularly in these shows. Through EDB, the Government provides LKR 500,000 for a single boat show each year for one company. However, there is no technical support with logistics and preparation of mar-keting materials or stands and transporting boats is costly. Preliminary arrangement to sell a boat after a show would facilitate participation abroad. Since there is no boat consor-tium through which companies can join efforts, there is no group participation in international boat shows and events.

In addition, no branding strategy, marketing materials, col-lective industry logo, communication channels or promo-tional campaign, including assistance from foreign trade missions and consulates, exists for the boat industry. A com-mon industry image/logo known globally would increase the sector’s visibility and facilitate investor targeting. A strong promotional campaign should include marketing materials, communication channels and promotional activities through foreign trade missions and consulates.

The following constraints are addressed in PoA : 1.2.2, 3.1.1, 3.1.2, 3.1.3, 3.2.1, 3.1.2, 3.2.2.

Weak links with the tourism industry results in no marina and few chartering services

Sri Lanka’s topography is conducive to developing boat fa-cilities around the island. Combined with inland tourist at-tractions, Sri Lanka can attract visitors navigating the Indian Ocean. However, currently there is only one charter service offered in the country. In addition to the lack of a regula-tory framework for the navigation of recreational craft ( see regulatory issues ), there is no fully operational marina infra-structure. Development of potential sites is slowed by ad-ministrative delays in releasing land in coastal areas. Three mini-marinas are already in operation : Mirissa, Beruwela and Hikkaduwa. The Hikkaduwa mini-marina is still under con-struction and has an unsafe, exposed harbour entrance that must be dredged continuously. Three more marinas are to be built in the next five years and feasibility studies are re-quired for another seven locations around the island :

The following constraints are addressed in PoA : 1.3.3, 2.1.2, 2.1.3, 2.2.3.

Page 30: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

20

[ SRI LANKA BOAT BUILDING STRATEGY ]

Table 5 : Planned marinas

Priority Location 2018 2019 2020 2021 2022

Investment through a call for expression of interest to build marinas required :

1 Galle

2 Dickowita

3 Trincomalee

Feasibility study for building marinas required :

1 Hambantota fisheries harbour

2 Kirinda

3 Tangalle

4 Nilwela

5 Ambalangoda

6 Pnadura

7 Chilaw

Private conformity assessment bodies cannot inspect and test the seaworthiness of vessels on behalf of the Government agency, which delays the sales process

Only the appointed Government agency can issue a cer-tificate of seaworthiness for a boat but Government agen-cies often lack qualified personnel with the experience and knowledge to certify boats. Inspection and testing of fish-ing boats and pleasure craft by private conformity assess-ment bodies on behalf of the Government is not allowed. This delays sales and limits industry growth and market diversification.

The following constraints are addressed in PoA : 1.1.4.

ISSUES AFFECTING THE ENTIRE VALUE CHAIN

Absence of adequate regulatory frameworks hinders boat building and marine industry development

Creating an enabling environment by updating regulations is a first step for industry development. Some regulatory con-straints identified were :

� Absence of a regulatory framework for the recreation-al craft navigation : a framework including criteria for boat use, safety rules and a navigation code is lack-ing. Recreational craft and yachts navigating the Indian Ocean cannot moor on the island to find repair or refuel-ling services.

� Lack of established registration procedures for recreation-al boats : a registration procedure for fishing boats exists at the Ministry of Fisheries but there is no proper registra-tion system for other boat categories. Receiving approval

for an exported recreational boat to leave the harbour on its own power involves unnecessary delays and additional costs. Clearance for a boat to be delivered to the buyer’s destination by sail requires multiple authorizations from different institutions successively : MoD, Sri Lanka Navy Rangala Base, the Headquarters of the Sri Lanka Navy and Sri Lanka Customs. In addition, an obligatory regis-tration when a boat leaves the harbour must be received from a registered harbour, such as Colombo Harbour, Galle Harbour or Trincomalee Harbour.

� Lack of a single Government agency or department re-sponsible for boat registration and implementation of the regulatory framework : a common complaint among stakeholders is the lack of a single appointed agency/department responsible for consolidated boat registra-tion procedures. A special individual approval from the Sri Lanka Navy is required for each boat taken to sea for trials. The lengthy permission process to test boats de-lays showing boats to customers, impedes overall boat production and creates a negative perception with po-tential customers.

Design of a comprehensive regulatory framework for recrea-tional boat registration and navigation based on global best practice is a major priority to increase industry growth. This can should be developed in collaboration with international partners such as Confindustria Nautica Italiana ( UCINA ). While the legislation is being drafted, interim action should be taken, such as issuing a temporary one-year licence to recreational craft operators of locally built and operated yachts pending the completion of the registration and cer-tification process. Establishing a regulatory framework for recreational craft will attract passing recreational craft to use refuelling, refit and maintenance services; will draw visitors navigating the Indian Ocean to visit Sri Lanka and will open more opportunities for charter and rental marine services.

Page 31: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

21

[ vaLuE cHaiN DiaGNOstics ]

The following constraints are addressed in PoA : 1.1.1, 1.1.3, 1.1.5, 1.1.6, 1.1.7, 1.1.8, 1.1.9, 1.2.1.

Weak coordination among stakeholders and no overall governing body leads to inefficient sector development and implementation of policies

As highlighted earlier, stakeholders noted the lack of coor-dination with relevant Government agencies leads to gaps and duplication of responsibilities. Limited private-public dia-logue leads to low awareness by public authorities about the economic importance of Boat building. Part of the difficulty

in coordinating is the lack of a coordination mechanism for the boat building value chain. Currently, the boat building Technology Improvement Institute ( BTI ) represents industry interests and provides private sector-driven training and ser-vices for boat building companies. However, BTI is not rec-ognized as a fully-fledged sector association representing the interest of the industry. Improvement of sector coordina-tion would be possible by establishing a steering technical committee that would include relevant ministry and public institutions working directly with the private sector.

The following constraints are addressed in PoA : 1.2.1, 2.4.1, 2.4.2, 2.4.3, 3.1.1.

Summary

Most of the issues reported by boat building companies are related to institutional and regulatory frameworks. An enabling environment created by updating regulations and infrastructure is needed by firms to develop the boat building industry.

The sector is strategic, since it has links other sectors such as electronics, tourism and logistics and offers opportunities to de-velop value chains inside the boat building sector. It should not be underestimated and should receive full support.

Photo: ITC

Page 32: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

22

[ SRI LANKA BOAT BUILDING STRATEGY ]

Photo: © Neil Marine

Page 33: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

23

[ ON tHE way tO succEssFuL iNDustry GrOwtH ]

ON THE WAY TO SUCCESSFUL INDUSTRY GROWTH

Industry stakeholders looking to bring a higher level of per-formance and sophistication to the Sri Lankan boat building industry developed the following vision :

“ Sri Lanka : boat building and Maritime Tourism Hub in the Indian Ocean ”THE FUTURE OF THE SECTOR

Unlocking the potential of Sri Lanka’s boat building industry requires key transformations in the value chain. The targeted efforts detailed in this Strategy’s PoA will address the con-straints identified earlier. A transformed value chain will be

characterized by improved input production, better overall coordination and governance, enhanced forward planning, an enabling regulatory framework and increased product and market development.

• Regulatory frameworks for the boat industry should be adopted and implemented to ensure effective operations in the sector.

Strategic objective 1: To create an enabling environment for industry

development by updating regulations and infrastructure

• Improved supply chain performance and sector coordination will respond to urgent industry needs in terms of skills, R&D, technology trasfer and overall strategic planning for sector developement.

Strategic objective 2: To raise the industry’s performance through

partnerships and targeted innovation

• Strenghtening industry marketing, promotion and branding will bring national and international recognition of the Sri Lankan boat industry.

Strategic objective 3: To enhance national and international visibility of

Sri Lanka’s boatbuilding industry

Page 34: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

24

[ SRI LANKA BOAT BUILDING STRATEGY ]

Figure 12 : Future boat building value chain

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Page 35: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

25

[ ON tHE way tO succEssFuL iNDustry GrOwtH ]

Table 6 : main areas of improvements for the value chain

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[ SRI LANKA BOAT BUILDING STRATEGY ]

OPPORTUNITIES TO DEVELOP NUMEROUS BOAT BUILDING PRODUCTS AND MARITIME SERVICESThe Sri Lankan boat industry has tremendous potential to develop new products and services and to reach new mar-kets. Future value chain enhancement and areas for focused investment will be driven by the boat sector’s market devel-opment objectives.

MARKET ORIENTATION AND IMPLICATIONS FOR THE VALUE CHAIN

The current boat industry in Sri Lanka is diversified in products, markets and quality levels. Priorities for boat sector growth are presented in short, medium and long-term goals.

Short-term goals

Product/service market orientation Description

Fishing boats Existing markets : local, indian OceanNew markets : maldives, mauritius, East africa

• Currently targeting the local and regional Indian Ocean market due to similar fishing operations. Limits to current production, which is focused on basic fishing vessels, are determined by the limited capacity of small and unstruc-tured yards.

• New market targets could be developed primarily by increased inter-govern-mental dialogue focused on the boat industry.

recreational craft Existing markets : local, india, Pakistan, North EuropeNew markets : southeast asia, indonesia, singapore, viet Nam, maldives, East africa ( Kenya ), Eu

• Aimed at quality customers, since yards generally work as third parties in-board/outboard producers for companies in northern Europe and Scandina-via. Complementary to leisure and sport boat manufacture, rowing scull and kayak production is a niche market in which manufacturers could compete on price and quality.

• Further steps needed to expand into markets with a growing interest in recreational boating include an update of FRP manufacturing techniques and increased targeted promotion. For sailboats, new market scenarios are possible in countries with government plans to develop marina and charter activities.

vessels for the transport of people and goods

Existing markets : local, india, singaporeNew markets : indian Ocean ( maldives, the seychelles ), Bangladesh, East africa

• The transportation vessels market has a good growth outlook in Indian Ocean and East African countries, as well as in countries with emerging economies. Government negotiations with Maldives are in progress for a duty reduction.

Refit, repair and refuelling services

Existing markets : indian Ocean, southeast asiaNew markets : Northeast asia, visiting yachts

• Sri Lanka’s strategic geographical position gives important advantages and offers many opportunities to provide these types of services to boats navigating the Indian Ocean.

Photo: © Neil Marine

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Medium-term goals

the recent development of many yachting hubs ( such as those in the Gulf, singapore or Hong Kong ( china ) ) and boating destinations in the indian Ocean area offer op-portunities to create new products and to invest in marina development and boating tourism infrastructure. Activities to expand local and regional boating business can be un-dertaken and new product development, complementary to existing manufacturing, is possible for niche production.

Product/service market orientation Description

Mother fishing and aquaculture vessels

Existing markets : local, maldives and the seychelles, indian Ocean, Europe

• Policies for fish collecting and processing mother vessels are now under development by the Ministry of Fisheries. Landing craft supply boats for aquaculture have potential markets regionally and in areas such as the EU.

Military ( coastguards’ boats )

Existing markets : local, indian Ocean, Gulf, NigeriaNew markets : Kuwait, saudi arabia, Oman, Barbados, Philippines, and Nigeria

• Export expansion for this sensitive type of manufacturing depends on gov-ernment-to-government negotiations and on companies’ lobbying abilities.

Maintenance and FRP scrapping

New markets : local, international • Sri Lanka’s advantageous geographical position in the Indian Ocean offers the opportunity to become a regional hub for repair and refit services, as well as a hub for FRP scrapping.

• Sri Lanka’s current boating trade with neighbouring markets could be up-graded by supplying services for a vessel’s complete life cycle. Adaptation of existing manufacturing technologies and infrastructure to maintenance and repair work is a secure way to upgrade the capacity, skills and interna-tional awareness of Sri Lankan yards, if workforce know-how and service reliability are assured.

Boat parts and marine equipment

New markets : international • Boating parts, an essential pillar of the boating supply chain, offer a high-potential expansion opportunity for Sri Lankan entrepreneurs wishing to service the international boat community. With many market segments and demand driven by product innovation, opportunities in this sector are numerous.

• Marine part manufacturers need to meet legislative and certification require-ments for products and local companies need to have experience dealing with international markets. This could be achieved through joint ventures with existing players.

Further growth will be enhanced through increased tourism, which creates a demand for recreational craft for both sea-going and inland boating activities.

Long-term goals

sri Lanka should take advantage of its strategic posi-tion at the crossroad of main yachting routes ( 400 nauti-cal miles ( Nm ) from maldives, 1000 Nm from Phuket ) to become a major yachting hub. the country’s favourable coastal environment and sea/weather conditions make

sri Lanka a suitable charter destination as boating and sailing tourism expands. Looking at the issues in upgrad-ing Sri Lanka’s recreational boating sector, the most signifi-cant relate to Boat building, equipment manufacture and boating tourism infrastructure and charter services, as they are mostly market driven and therefore have high growth potential in the medium-term. Market and product develop-ment and a more advanced and mature boat industry, al-ready featuring a traditionally high-skilled workforce, should attract international players to create local partnerships that target regional markets.

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[ SRI LANKA BOAT BUILDING STRATEGY ]

Long-term goals

Product/service market orientation Description

Boating tourism New markets : Eu, Gulf states • Market entry requires a wide and strategic national framework for boating tourism, with investment incentives and simple regulations to attract investors. To entice real estate investors, redesign and adaptation of available areas can be combined with waterfront renewal and integrated with hospitality and com-mercial activities.

• Skilled marina operators and managers and availability of basic boating sup-plies and services ( including boat assistance/ maintenance/repair activities that could be carried out by new branches of existing boat building compa-nies ) will provide the basic functions needed to develop successful boating tourism destinations in the country. Once the basic boating infrastructure is designed and built, increased interest in the Sri Lankan market by global char-ter companies, supported by local partners, is likely.

Charter services New markets : Eu, Gulf states • Sri Lanka is at the crossroad of the main Indian Ocean yachting routes ( 400 NM from Maldives, 1000 NM from Phuket ) and has a favourable coastal environment and good sea and weather conditions. Linked to good transport infrastructure, these are strong assets in making Sri Lanka a high-value inter-national destination for charter services through the expansion of boating and sailing tourism and the construction of basic boating infrastructure ( marinas and sheltered buoying areas ).

Marinas and services

New markets : local, international, visiting yachts from Gulf states, singapore, Hong Kong ( china )

• The recent development of numerous yachting hubs and boating destinations in the Indian Ocean gives Sri Lanka the opportunity to develop marina and boating infrastructure and related supply services, including boat assistance/maintenance/repair activities.

in a highly competitive market, r&D and a workforce with strong technical skills is essential to deliver boat assembly and after-sale boat services. As boating sector competition is driven mainly by customer requirements, R&D is essen-tial to anticipate customer requests and to deliver a better

product that is price competitive. Equal importance should be given to developing the technical skills needed to man-age a boat’s entire life cycle, which requires specific com-petencies and resources for each stage of a product’s life.

Table 7 : sri Lanka boat building market orientations by geographical area

LEGENDSHORT-TERM GOALSMEDIUM-TERM GOALSLONG-TERM GOALS

MARKET PENETRATIONLOCAL + INDIAN OCEAN Fishing, Coast Guard, recreational, transportation, workboatsGULF Coastguard, workboatsSINGAPORE Transportation, workboatsNIGERIA CoastguardNORTH EUROPE Recreational, lifeboats

PRODUCT DEVELOPMENTLOCAL Scrapping, mother fishing vessels, rowing, kayaks, aquaculture vesselsINDIAN OCEAN Refit, mother fishing vesselsSOUTHEAST ASIA RefitEUROPE Aquaculture vesselsINTERNATIONAL Scrapping, parts, rowing, kayaks

DIVERSIFICATIONLOCAL Charter, marinas and servicesNORTHEAST ASIA RefitINTERNATIONAL Charter, maintenanceVISITING YACHTS Refit, marinas and services

MARKET DEVELOPMENTLOCAL Sailboats, workboats and Coast GuardINDIAN OCEAN Fishing, recreational, transportation, lifeboats, workboatsEAST AFRICA Fishing, recreational, transportationNIGERIA CoastguardSOUTH AFRICA WorkboatsGULF Coastguard, workboatsNORTHEAST ASIA LifeboatsSOUTHEAST ASIA Workboats, recreationalEUROPE Recreational

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to remain competitive in the global market, companies must be aware of and ready to face barriers. Barriers to trade are many, including well-settled competitors with loyal customers and strong knowledge of their export markets, especially specific boater habits and sea and weather con-ditions. This knowledge is essential to supplying the right product. Moreover, each nation has specific technical stand-ards, regulations and certification processes, which can

differ substantially between countries. Tariffs, import taxes and trade red tape are common and can be a major reason not to invest in a market. Distribution channels are another strategic element in reaching interested customers and re-ducing trade difficulties. Finally, marketing costs such as boat show participation and related transport costs, includ-ing arranging post-show sales of model products, must also be taken into account.

Summary

• Many important product and market development opportuni-ties lie ahead for Sri Lanka.

• There is growing opportunity to serve Asia and to become a significant Indian Ocean maritime hub.

• Institutional streamlining and strengthened coordination are required to grow the industry efficiently.

• Seizing key opportunities to boost the industry is possible if efficient investor targeting is achieved.

• Strategic implementation is required.

Photo: © Neil Marine

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[ SRI LANKA BOAT BUILDING STRATEGY ]

STRATEGIC VALUE CHAIN OPTIONS

unlocking the potential for boat industry growth in Sri Lanka will require a value chain transformation that improves connections with local producers and increase sector coordination. These adjustments will allow the sec-tor to compete both on product quality and on production quantities. To this end, the following value chain adjustments have been identified :

Value acquisition : acquire greater value by improving efficiency

value option How to implement time frame

Increase quality and quantity of skills Collaborate closely with universities and educational institutions to develop more training programmes and apprenticeships that promote opportunities for technicians to work in boat building industry.

Short-term

Enhance industry coordination Organize regular meetings to plan the development of the boat building industry and establish adequate support mechanisms that provide specific training to members on business management skills.

Short-term

improve storage facilities for materials Use entrepot trade and bonded warehouses to offer favourable storage conditions for higher quality and larger quantities of boat building materials.

Medium-term

reduce the waste of boat manufacturing Install recycling plants around the country to reduce boat waste. In the long-term, this services can be offered to regional markets as well.

Medium-term

value retention : retain greater value through reinforcement of inputs production locally

value option How to implement time frame

Reinforce local production of material supplies ( resins, paints and coating )

Introduce local producers of boat building materials to global standards. Medium-term

Establish production of marine equipment locally to replace imports

Through investment targeting, attract FDI and JV to establish marine equipment production.

Medium-term

Link with the electronics and electrical machinery sectors

Supply local auxiliary and command systems for boats. Long-term

value addition : add perceived value in the eyes of the buyers

value option How to implement time frame

Improve promotion and visibility in target markets

A branding and promotion plan should be developed jointly with industry players, including public and private representatives. This plan should address development of marketing materials, communication channels, a common industry logo and an overall a promotional campaign.

Medium-term

value creation : Expand production by creating value within the industry

value option How to implement time frame

Increase systemised links with the tourism industry

Develop additional maritime services, including charter and rental boat services, and provide marina services to visiting boats and yachts.

Medium-term

Link with the it-Business Process management sector

Develop maritime software, including optimisation and analysis of hull, machinery and propulsion systems.

Long-term

Produce boat building materials and equipment for export

Develop production of materials and equipment necessary for boat building for export : marine electronics, interior equipment, furnishing, materials, electrical fittings, machinery, propulsion, mechanical systems, resins, paints and rubber accessories.

Long-term

value distribution : maximise the economic and social development impact

value option How to implement time frame

regional development opportunities Provide more opportunities to maximize Boat building’s contribution to regional development by increasing the number of boat building productions sites and relevant maritime services around the island.

Medium-term

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INSTITUTIONAL ADJUSTMENTS

Boat industry development also depends on trade and in-vestment support institutions ( TISIs ) and overall inter-in-stitutional coordination. These institutions are divided into four main categories : policy support, trade services, busi-ness services and academia and civil society ( see table 8 ). Certain capacity and resource issues must be addressed if TISIs are to effectively support the sector.

Table 8 : tisis supporting the boat building industry

Policy support

• Ministry of Fisheries and Aquatic Resources Development ( MoFARD )

• MoPS

• MIC

• Ministry of Finance

• Ministry of Strategic Planning, National Development and Statistics

• MoD

• Ministry of National Policy and Economic Affairs

• Ministry of Tourism Development and Christian Religious Affairs

trade support

• Sri Lanka Ports Authority

• Sri Lanka Coast Guard ( MoD )

• Sri Lanka Navy Director General ( MoD )

• Ceylon Fishery Harbours Corporation

• Boat building Technology Improvement Institute

• Sri Lanka EDB

• Board of Investment of Sri Lanka

• Sri Lanka Customs

Business support• Boat building Technology Improvement Institute

• Ceylon Chamber of Commerce

• National Chamber of Exporters of Sri Lanka

academia and civil society

• Colombo International Nautical and Engineering College

• Naval and Maritime Academy

• National Aquatic Resources Research and Development Agency

• National Institute of Fisheries and Nautical Engineering

• Ocean University of Sri Lanka

• National Science Foundation

Improved synchronization and collaboration between Government entities

Institutional coordination of the key TISIs that support the boat industry needs to be improved. With no Government agency or department responsible for boat industry develop-ment, support is fragmented and the sector does not receive the needed backing. The public sector often lacks human or financial capacity and has limited awareness about the boat industry’s economic importance. In relevant ministries, there is no qualified, appointed person with experience and knowledge of the industry to work directly with private sec-tor representatives. To acquire information and to obtain a clearance for temporary registration of a boat, stakehold-ers must follow time-consuming procedures that must be

completed in strict order, often requiring physical submis-sion of documents to each institution. Digitalizing the per-mission / approval process will facilitate boat industry trade.

Strengthened links between industry and academia

Links between industry and academia are weak and there is an urgent need to identify skill gaps and to address the in-dustry’s R&D. Technically skilled labour is limited and there is little awareness among students about jobs in the boat in-dustry. Technical skills training for the boat industry could be developed by universities and TVET programmes, based on regular consultation with the private sector, to supply work-ers with specific skills.

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[ SRI LANKA BOAT BUILDING STRATEGY ]

Currently, capacity for innovation in the sector is quite lim-ited. R&D and product development funding schemes and research centre collaboration could be implemented. Key universities and private institutions such as Colombo International Nautical and Engineering College, University of Moratuwa, Kotelawala Defence University and Lanka Hydraulic Institute Ltd could provide testing facilities for new product development.

Enhanced industry coordination and representation of the sector

Strengthening boat building industry governance is crucial for the sector’s successful development. A sector advisory committee could be established under the MIC that would include private sector and relevant ministries. This commit-tee would hold a quarterly meeting to discuss priorities for sector development. BTI could be empowered to collect,

analyse and disseminate data related to market demands and trends. Establishing a national boat building industry as-sociation to represent all stakeholders could result in repre-sentative body that would act for the boat building industry at the highest levels. Partnership with international boat as-sociations and institutes such as ICOMIA, National Marine Manufacturers Association, UCINA and International Boat building industry will improve Sri Lanka’s representation in the global boating arena.

REGULATORY AMENDMENTS

creating an enabling environment by updating regulations and infrastructure is necessary for boat building industry development. The key adjustments to be carried out are summarized below.

regulation adjustment Purpose

Navigation of the boats

Abolish passenger and crew levy for yachts and leisure boats owned, built and operated by Sri Lankan companies

• To create a level playing field, apply the MoPS charge of US $ 8 per passenger/day and LKR 20 for crew member/day only to foreign owned and foreign operated yachts in Sri Lankan waters that do not pay any taxes. Exempt any yacht carrying passengers if the yacht is owned, built and operated by a Sri Lankan company, registered with BOI or not, and paying all taxes in Sri Lanka ( such as value added tax ( VAT ), nation building tax ( NBT ), tax on profit, etc. ).

• merchant shipping act, No. 52 of 1971, republished in Gazette 2017/31 of 4 may 2017.

• Boat ordinance 1900 to consolidate the law regulating the carriages of passengers and goods by boats : an ordinance to register boats at the local authority No. 4 of 1900, No. 14 of 1907 amended, No. 32 of 1916 amended, No. 61 of 1939 amended, No. 03 of 1946 amended.

Adopt a regulatory framework for the navigation of recreational crafts

• To entice visitors navigating the Indian Ocean to visit Sri Lanka or to use repairing/refuelling services, develop the regulatory framework ( registration, use of a boat, safety rules, naviga-tion code, Customs and port entry/leaving procedures, etc. ) for the navigation of recreational craft, yachts and charters for locally owned boats, whether registered with the BOI or not, and for international boats sailing around the island. For registered recreational craft with permits, introduce clear and simple procedures to obtain authorization from MoD, Navy, Coast Guard, Department of Wildlife Conservation, Tourist Board, Customs and Department of Immigration and Emigrations through a one-stop shop.

• merchant shipping act, No. 52 of 1971, republished in Gazette 2017/31 of 4 may 2017.

Building of boats ( including import of inputs )

Exempt the selling and sailing yachts under HS code 8903.91 ( Sailboats, with or without auxiliary motor ) from upfront VAT, Port and Airport Development Levy ( PAL ) and NBT and

impose custom duties on second-hand yachts and boats imported to Sri Lanka

• So the local boat building can better compete in the regional Asian market through economy of scale, and to discourage boat imports and boost local production, exempt local yacht manufacturers from upfront taxation ( VAT : 15 %, PAL : 7.5 % and NBT : 2 % ).

• value added tax act No. 14 Of 2002 ( Deferment in terms of section 2 ( 3 ) of the vat act ) application for registration with Director General of customs;

• Ports and airports Development Levy ( amendment ) act, No. 21 of 2016;

• Nation Building tax act, No. 09 of 2009, amended act, No.13 of 2017;

• customs National imports tariff Guide ( section xvii chapter 89 ).

• Possibly extend these tax concessions to other boats used for tourism, such as :

» 8903.10.90 inflatable : other ( rigid inflatable ‘ribs’ )

» 8903.92 motor boats, other than outboard motors

» 8903.99.90 other boats.

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regulation adjustment Purpose

Adopt national boat building ( both recreational and commercial ) standards, based on internationally recognized technical standards, to expand exports

• Adopting internationally recognized standards and certifications is critical to expanding exports. Requirements for yachts of less than 24 metres are different from those for merchant shipping boats. Standards and certification for various boat design categories to assess a boat’s degree of seaworthiness, conforming to international requirements such as Conformité Européene ( CE ) certification for EU markets, should be introduced.

• Gazette to be published by MoPS.

To accelerate the sales process, allow the inspection and testing of fishing boat and pleasure craft seaworthiness by private conformity assessment bodies on behalf of the Government agency

• To accelerate and facilitate the export process, allow inspection and testing of seaworthiness for fishing boats and pleasure craft by private conformity assessment bodies. Classification societies can be approved and registered with the Director of Merchant Shipping under the Merchant Shipping Act.

• merchant shipping act No. 52 of 1971, moPs.

registration of boats ( both manufactured in-country and visiting boats/craft )

Establish a one-stop shop for registration of boats ( digital procedure ) :

• Registration/regulations for all categories of boats manufactured in Sri Lanka ( other than fishing boats )

• Registration/regulations for leisure craft operation in the country and for yachts/crafts visiting Sri Lanka

• Regulations/standardizations for imports of boats to Sri Lanka

• Introduce a clear digital procedure for any boat entering or leaving Sri Lankan waters 1 ) to en-sure visiting yachts can clear immigration and Customs in any official entry harbour and move freely in Sri Lankan waters; 2 ) to facilitate issuing temporary licences for sea trials and boat demonstrations on the open sea for customers and 3 ) to speed-up export process for boats leaving harbours under their own power.

• Government aims to establish a national regulatory framework and registration process for recreational boats ( small commercial vessels under 24 metres ) that encompasses all seg-ments of the value chain and to appoint and establish a single Government agency responsi-ble for vessel registration and implementation of the regulatory framework.

• merchant shipping act, No. 52 of 1971 should be amended to include new guidelines by the Director General of merchant shipping after industry consultation and adaptation of international best practice.

Other activities connected to the boat building

Allow longer concessions in mini-marinas • To offer more flexibility in using mini-marinas, allow 20-year concessions from the Ceylon Fish-ery Harbours Corporation. Present concessions are only for four years.

Receive approval for whales and dolphins watching during cruises

• Obtain a blanket approval from the Department of Wildlife Conservation for all locally built and locally operated multi-day residential charters and mini-cruise boats to observe whales and dolphins during cruises. Differentiate this approval from the whale watching permits currently issued for bus type operations.

• Require new guidelines from the Department of Wild Life Conservation, with concurrent agreement from the ministry of tourism and christian religious affairs, on the number of vessels that can be deployed at one time.

• Fauna and Flora Protection ( amendment ) act, No. 22 of 2009.

Allow subleasing of industry space to partners by setting up a JV

• Promote and enable local BOI companies to attract foreign boatbuilders.

• BOi legislation ( section 16 of the Board of investment Law No. 4 of 1978 ( BOi Law ) ).

Allow foreign insurance companies to cover liability risk for yachts operating charter and tourism services

• Provide coverage of large and specific risks by foreign insurance companies due to the ab-sence of similar services in the domestic market.

• insurance industry act No. 43 of 2000 ( rii act ).

Implement regulations and rules for boat ownership that offer favourable conditions for buying and locating boats in Sri Lanka

• Encourage boat owners to locate their boats in Sri Lankan waters by developing a financial schemes for boat purchases so that an owner can pay less than half of a boat’s value and a financial company ( for example, a charter company ) finances the rest of the purchase price in exchange for using the boat several months per year.

• merchant shipping act, No. 52 of 1971.

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[ SRI LANKA BOAT BUILDING STRATEGY ]

INVESTMENT OPPORTUNITIES

the development of more production capacity in boat building will require investment in key strategic areas of the value chain. With strong middle-class expansion, espe-cially in Asia-Pacific, consumer wealth will lead to a growth in demand for the boating sector.

The following segments are seen as key areas for focused investment to upgrade the value chain.

investment opportunities rationale

Local production of inputs :

• resins

• Paints

• why? To ensure a steady and timely supply of inputs to the boat building industry, local pro-duction of resins, paints and coatings that meet global boat building industry standards should be encouraged.

• How? Attract investors and JVs to increase and improve local production of materials for the boat building industry.

• source of funding : FDI, JV

Bonded warehouses • why? To ensure there is adequate storage to keep materials under special conditions in bonded warehouses. Sri Lanka has significant potential to become an Asia hub for commercial bonded warehouse facilities and services.

• How? This can be done by attracting suppliers in entrepot activities

• source of funding : FDI, JV

Building additional boat and dock yards with export services

• why? To become a regional repair and refit service hub for boats navigating the Indian Ocean

• How? Attract joint ventures partners

• source of funding : FDI, JV

Attracting equipment and accessories manufacturers :

• Engines

• Hardware

• components

• why? To have a consistent supply of marine equipment

• How? Attract FDI to install the production of equipment

• source of funding : FDI, JV

Building recycling plant • why? To protect the environment and develop a new industry

• How? Attract investment

• source of funding : FDI, JV

installing marina facilities • why? To attract passing recreational boats and yachts

• How? Prioritize 3-4 locations to develop marina services. Government to provide basic infra-structure such as breakwaters, a water system and recycling. Announce tender expressions of interest. Private companies to build docking area and infrastructure facilities

• source of funding : Public–private partnership

attracting marina operators • why? To provide services for yachts and boats navigating the Indian Ocean

• How? While building marina facilities, attract marina operators

• source of funding : FDI

attracting charter companies • why? To build links with tourism sectors and to attract more visitors to Sri Lanka.

• How? Target and promotion

• source of funding : FDI

Developing water transportation facilities and services for the national market ( longer term )

• why? To improve inland transportation

• How? Develop a blue print for a national water system including areas, location and road con-nectivity

• source of funding : National public–private partnership

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[ mOviNG tO actiON ]

MOVING TO ACTION

THE STRATEGIC FRAMEWORK

Strategic objectives will guide the Strategy’s implementa-tion in order to achieve the industry’s vision. The PoA re-sponds to this vision by addressing the sector’s constraints and by leveraging opportunities in a comprehensive man-ner. To this end, efforts will be made to meet the following strategic objectives :

Table 9 : strategic objectives of the strategy

Revise keyregulations limiting

industry growth

To raise the industry performance through

partenerships and targetedinnovation

To enhance national andtargeted international

visibility of Sri Lanka boatindustry

Provide adequateinfrastructures andfacilities for boat

building andnavigation

Enhancetechnology

transfer throughimplementation of

PPP

Strengthen R&Dand productdevelopment

facilities at keyinstitutionsenabling An

innovation in boatindustry

Build relationsbetween industryand academia to

improve skillsavailability to industry

Strengthen thegovernance of The

boat sector andrelated activities

Raise awarenessabout the potential

industryimportance atnational level

Improve the leveland quality of

service for visitors

Strengthenbranding and

promotion of theboat industry

Simplify andharmonize the

operationalprocedures in the

boat industry

To create an enablingenvironment for industrydevelopment by updating

regulations and infrastructure

Photo: © Northsails

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[ SRI LANKA BOAT BUILDING STRATEGY ]

STRATEGIC OBJECTIVE 1 : TO CREATE AN ENABLING ENVIRONMENT FOR INDUSTRY DEVELOPMENT BY UPDATING REGULATIONS AND INFRASTRUCTUREAn analysis the boat building industry highlighted some criti-cal bottlenecks. These included the need to develop a reg-ulatory framework for the navigation of recreational craft in order to attract boats navigating the Indian Ocean and the need to establish adequate facilities and clear procedures for registration of all categories of boats manufactured and operated in Sri Lanka. Allocating land and giving priority to a new waterfront EPZ and industry clusters will allow expan-sion of production sites and attract new investors and inter-national boat operators to use marine services. This strategic objective will be achievable through three operational objec-tives, which are :

� Revise key regulations currently limiting industry growth. � Simplify and harmonize operational procedures in the

boat building industry. � Provide adequate infrastructure and facilities for boat

building and navigation.

STRATEGIC OBJECTIVE 2 : TO RAISE THE INDUSTRY’S PERFORMANCE THROUGH PARTNERSHIPS AND TARGETED INNOVATIONThis strategic objective tackles weaknesses in input produc-tion and in overall supply chain performance. It encourages improvement of production capacities through skill develop-ment, R&D, better sector coordination and building strong dialogue between academia and industry. Effective target-ing of foreign investors for the Strategy’s priorities, such as for construction and operation of marinas and reinforce-ment of local production of boat building inputs, will en-courage technology transfer by attracting FDI and JV. This strategic objective is composed of four operational objec-tives, namely :

� Enhance technology transfer through the implementation of public–private partnerships.

� Build relationships between industry and academia to improve skills and capacities.

� Strengthen R&D and product development facilities at key institutions to enable boat building industry innovation.

� Strengthen the governance of the boat building industry and related activities.

STRATEGIC OBJECTIVE 3 : TO ENHANCE NATIONAL AND INTERNATIONAL VISIBILITY OF SRI LANKA’S BOAT BUILDING INDUSTRYNational and international recognition of the Sri Lankan boat building industry is important for growth. Currently, the in-dustry’s products are little known in the global market, de-spite Sri Lanka’s long history of boat building. Industry branding is not developed and most sales are made through established relationships with existing partners. Marketing and promotion capacities must be strengthened and carried out by trade support institutions and business associations. Development of a branding strategy for the boat building in-dustry, through joint efforts by a boat building industry con-sortium to elaborate marketing materials and communication and promotional activities, will enhance the industry’s im-age. To reach this strategic objective, there are two opera-tional objectives :

� Raise awareness about the potential industry importance at national and international levels.

� Strengthen branding and promotion of the boat building industry.

Photo: © Northsails

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[ imPLEmENtatiON FramEwOrK ]

IMPLEMENTATION FRAMEWORK

The Strategy aims to transform Sri Lanka into a renowned Southeast Asia boat building and recreational boating hub and yacht service centre. Achieving this ambitious objective will depend on industry’s ability to implement the activities defined in the Strategy. To provide the needed structure for the sector’s development, the following interventions should be prioritized :

� Urgently develop a regulatory framework for the naviga-tion of recreational craft to attract boats navigating the Indian Ocean;

� Allocate land for boat building and repair clusters in exist-ing and new waterfront BOI zones; and

� Establish a national boat building industry associa-tion to act on behalf of the industry and to represent all stakeholders.

These ‘quick win’ activities are necessary to initiate the strat-egy’s implementation successfully and to create rapid in-dustry growth.

MANAGING FOR RESULTS

Translating these priorities into implementable projects will contribute to the substantial increase in export competitive-ness and earnings envisaged under the Strategy. These in-creases will be driven by reforming the regulatory framework, optimizing institutional support to exporters and strengthen-ing private sector capacities to respond to market oppor-tunities and challenges. Allocation of human, financial and technical resources is required to efficiently coordinate, im-plement and monitor overall implementation.

Successful execution of activities will depend on the abil-ity of stakeholders to plan and coordinate actions in a tacti-cal manner. Diverse activities must be synchronized across public and private sector institutions to create sustain-able results. Hence, it is necessary to foster an enabling environment and to create an appropriate framework for implementation.

The key activities needed to achieve targets will be coor-dination of activities, progress monitoring and mobilizing resources for implementation. Industry representatives rec-ommended that a public-private ‘advisory committee’ for the boat building industry be rapidly established, operational-ized and empowered. The boat building industry ‘adviso-ry committee’ is to be responsible for overall coordination, provision of policy guidance and the monitoring of industry development in line with the Strategy.

Photo: © Sail Lonka Charter

Page 48: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

38

[ SRI LANKA BOAT BUILDING STRATEGY ]

Figure 13 : institutional framework for boat building industry development

Investment and private sector initiatives aligned to strategic

priorities

Implementation through national institutions and

national budget

Development partners projects

MoDSIT

Cabinet

EDB coordination

‘Advisory committee’ on boating industry

Private: Seven private companies, Boat Building Technology Improvement Institute

Public: Ministry of Industry and Commerce, Ministry of Fisheries and Aquatic Recourses Development, Merchant Shipping

Secretariat at Ministry of Port and Shipping, Board of Investment, Sri Lanka Navy, Sri Lanka Ports Authority, Ceylon Fishery Harbours Corporation,

Ministry of Development Strategies and International Trade, Export Development Board

NES Management Unit(MODSIT)

source : ITC.

BOAT BUILDING INDUSTRY ‘ADVISORY COMMITTEE’

The Export Development Act ( 1979 ) empowers the EDB to ‘On the advice from the Board, the Minister may by Order in the Gazette, establish advisory committees the develop-ment and promotion of certain products, product groups and commodities as well as functional aspects of trade.’ Additionally, ‘each such advisory committee shall have the power to fix and regulate its own procedure, including the power to determine the number of members necessary to form a quorum at its meeting.’ The advisory committees have the function ‘to advise the Board on any or all of the matters which the Minister considers necessary for the pur-poses of carrying out of giving effect to the principles and provisions of this act.’

A Boat Building advisory committee has been established by Minister MoDSIT to enable private sector and public in-stitutions to strategically steer development of this focus in-dustry. The boat building advisory committee is composed of the following members:

� Seven private companies � Boat Building Technology Improvement Institute � Ministry of Industry & Commerce � Ministry of Fisheries & Aquatic Resources Development � Merchant Shipping Secretariat, Ministry of Port and

Shipping � Board of Investment � Sri Lanka Navy � Sri Lanka Ports Authority � Ceylon Fishery Harbours Corporation � Ministry of Development Strategies and International

Trade � Export Development Board

Page 49: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

39

[ imPLEmENtatiON FramEwOrK ]

The advisory committee will meet quarterly and implement the following functions

i. Create a shared understanding of key market challenges and opportunities facing the sector;

ii. Set goals and targets that, if achieved, will strengthen the sector’s competitive position and enhance Sri Lanka’s overall capacity to meet the changing demands of markets;

iii. Propose key policy changes to be undertaken and pro-mote these policy changes among national decision makers; and

iv. Support the coordination, implementation and monitor-ing of activities in the sector by the Government, private sector, institutions or international organizations to en-sure alignment to goals and targets and, as required, contribute to resource identification and alignment.

KEY SUCCESS FACTORS FOR EFFECTIVE IMPLEMENTATION

The presence of the ‘advisory committee’ to oversee the im-plementation of the Strategy is a key success factor but it is not sufficient to effectively meet its goals.

Private sector support and participation in implementation

The private sector clearly expressed its willingness to con-tribute, directly or in partnership with public institutions, to the Strategy’s implementation. Their implementation efforts can range from providing business intelligence to institutions to contributing to project design, promotion and branding, policy advocacy, etc. In brief, the private sector’s practical knowledge of business operations is essential to ensuring that the Strategy remains aligned with market trends and opportunities.

Proactive networking and communication

The key implementing institutions detailed in the PoA need to be informed of the Strategy’s content and the implications for their 2018–2022 programming. This networking and commu-nication is essential to build ownership and to provide institu-tions with the opportunity to confirm which activities they can implement in the short-to-long-term. It will be important for the EDB, MoDSIT and members of the advisory committee to reach out to relevant institutions nationally to create aware-ness and support for boat building industry development.

Resources for implementation

The advisory committee, in collaboration with the EDB and the NES Management Unit at MoDSIT, will need to lever-age additional support for efficient implementation. Effective planning and resource mobilization is indispensable for the Strategy’s implementation. Resource mobilization should be carefully planned and organized.

As the boat building industry is a priority of the NES, the Government of Sri Lanka should define annual budget allo-cations and other support to drive industry growth. This will demonstrate clear commitment to strengthening the sector and will encourage private partners to support development. In addition to national budget support, resource identification will require the BOI to target foreign investors in line with the Strategy’s priorities, such as construction and operation of marinas. Investment flows to Sri Lanka also should be con-sidered as a valuable driver of Strategy implementation and overall industry development.

The various implementation modalities detailed in the PoA will determine the success of the Strategy’s implementation. However, high-level support from Government, in collabora-tion with strong championship by the private sector, will be the real driver of the Strategy’s success.

Photo: © Northsails

Page 50: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

40

[ SRI LANKA BOAT BUILDING STRATEGY ]

Photo: (ITC) –Danusha Marine

Summary

To achieve the Strategy’s vision and strategic objectives, a robust, actionable, realistic and strategic PoA is required. This is provided in the section below, and constitutes the core of this Strategy.

The PoA is structured along the strategic and operational objectives described above. For each of these objectives, the PoA outlines detailed activities and their implementation modalities, which include :

• Priority level : priority 1 being the highest and 3 the lowest.• Start/end dates : the desired timeframe of the activity.• Targets : quantifiable targets which allow monitoring of

activity completion during the implementation stage.

• Lead implementation partners : one single accountable lead institution per activity. The institution can restrict its participation to oversight and coordination or it also can have a technical role.

• Supporting implementation partners : any institu-tion that should be involved at any stage of the activity’s implementation.

• Existing programmes or potential support : existing initiatives ongoing in the specified area of the activity.

• Cost estimation ( US $ ) : an estimate of the activity’s cost for the entire implementation period.

Page 51: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

PLAN OF ACTION 2018-2022

Page 52: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

42

[ SRI LANKA BOAT BUILDING STRATEGY ]

Stra

tegi

c ob

ject

ives

Oper

atio

nal

obje

ctiv

esAc

tivity

Prio

rity

Star

t dat

eEn

d da

teTa

rget

sLe

adin

g im

plem

entin

g pa

rtne

rs

Supp

ortin

g im

plem

entin

g pa

rtne

rsIn

dica

tive

cost

s (U

SD)

1: T

o cr

eate

an

ena

blin

g en

viro

nmen

t fo

r ind

ustry

de

velo

pmen

t by

upd

atin

g re

gula

tions

and

in

frast

ruct

ure.

1.1:

Rev

ise

key

regu

latio

ns

limiti

ng in

dust

ry

grow

th.

1.1.

1 Ur

gent

ly d

evel

op, a

dopt

and

impl

emen

t the

re

gula

tory

fram

ewor

k fo

r the

nav

igat

ion

of re

crea

-tio

nal c

raft

base

d on

inte

rnat

iona

l reg

ulat

ory

stan

d-ar

ds, n

amel

y:

• us

e of

a b

oat;

• sa

fety

rule

s;•

navi

gatio

n co

de;

Mer

chan

t Shi

ppin

g Se

cret

aria

t and

Tech

nica

l Com

-m

ittee

to d

raft.

Whi

le th

e le

gisl

atio

n is

bei

ng d

rafte

d,

inte

rim a

ctio

n (te

mpo

rary

one

-yea

r lic

ence

) to

be

prov

ided

to re

crea

tiona

l cra

ft op

erat

ors

for a

ll lo

cally

bu

ilt a

nd o

pera

ted

yach

ts p

endi

ng th

e co

mpl

etio

n of

th

e re

gist

ratio

n an

d ce

rtific

atio

n pr

oces

s.

The

regu

lato

ry fr

amew

ork

shou

ld b

e de

velo

ped

base

d on

glo

bal b

est p

ract

ice

in c

olla

bora

tion

with

inte

rna-

tiona

l par

tner

s (U

CINA

).

101

/04/

2018

31/1

2/20

18•

Gaze

tte N

otifi

catio

n of

ado

pted

le

gisl

atio

n in

the

Mer

chan

t Sh

ippi

ng A

ct N

o. 5

2 of

197

1 am

endm

ents

pub

lishe

d wi

thin

1

year

; •

Befo

re le

gisl

atio

n ad

opte

d,

tem

pora

ry li

cens

es is

sued

un

der t

he e

xistin

g re

gula

tions

.

Min

istry

of P

orts

an

d Sh

ippi

ngM

inis

try o

f Fis

herie

s an

d Aq

uatic

Res

ourc

es; E

xpor

t De

velo

pmen

t Boa

rd; B

oat

Build

ing

Tech

nolo

gy Im

-pr

ovem

ent I

nstit

ute

(BTI

)

-

1.1.

2 Ad

opt n

atio

nal b

oat b

uild

ing

(recr

eatio

nal a

nd

com

mer

cial

boa

ts) s

tand

ards

bas

ed o

n in

tern

atio

n-al

ly re

cogn

ized

tech

nica

l sta

ndar

ds to

exp

and

expo

rt ca

paci

ties.

A n

atio

nal t

echn

ical

com

mitt

ee s

houl

d be

es

tabl

ishe

d fo

r thi

s.

CE s

tand

ard

to b

e co

nsid

ered

as

a st

anda

rd c

ertif

ica-

tion.

101

/04/

2018

31/1

2/20

18•

Natio

nal s

tand

ards

fram

ewor

k fo

r the

indu

stry

ado

pted

Min

istry

of P

orts

an

d Sh

ippi

ngBo

ard

of In

vest

men

t (BO

I);

Sri L

anka

Cus

tom

s; E

xpor

t De

velo

pmen

t Boa

rd

1.1.

3 Es

tabl

ish

clea

r pro

cedu

res

for:

• Re

gist

ratio

n/re

gula

tions

for a

ll bo

at c

ateg

orie

s m

anuf

actu

red

in S

ri La

nka

(oth

er th

an fi

shin

g bo

ats)

• Re

gist

ratio

n/re

gula

tions

for l

eisu

re c

raft

oper

atio

ns

in th

e co

untry

and

for v

isiti

ng y

acht

s/cr

afts

to S

ri La

nka,

incl

udin

g:•

Tem

pora

ry li

cenc

es fo

r boa

ts fo

r sea

tria

ls a

nd to

de

mon

stra

te b

oats

to c

usto

mer

s in

the

open

sea

an

d le

avin

g/en

terin

g a

harb

our;

• Pe

rmit

for b

oats

and

shi

ps le

avin

g a

harb

our o

n th

eir o

wn p

ower

;•

Regi

stra

tion

of v

isiti

ng y

acht

s an

d re

crea

tiona

l cr

aft;

• Cu

stom

s an

d po

rt en

try/le

avin

g pr

oced

ures

;•

Abol

ishm

ent o

f pas

seng

er a

nd c

rew

levi

es fo

r ya

chts

and

leis

ure

boat

s ow

ned,

bui

lt an

d op

erat

ed

by S

ri La

nkan

com

pani

es.

101

/04/

2018

31/1

2/20

18•

Clea

r pro

cedu

res

for b

oats

re

gist

ratio

n es

tabl

ishe

d M

inis

try o

f Por

ts

and

Ship

ping

Min

istry

of F

orei

gn A

ffairs

; Ex

port

Deve

lopm

ent B

oard

; De

partm

ent o

f Im

mig

ratio

n an

d Em

igra

tion

1.1.

4 Al

low

the

insp

ectio

n an

d te

stin

g of

sea

worth

i-ne

ss fo

r fis

hing

boa

ts a

nd p

leas

ure

craf

t (on

ce n

a-tio

nal b

oat b

uild

ing

regu

latio

ns a

re a

dopt

ed) b

y pr

i-va

te c

onfo

rmity

ass

essm

ent b

odie

s on

beh

alf o

f the

Go

vern

men

t age

ncy

to a

ccel

erat

e th

e pr

oces

s (th

e fin

al c

ertif

icat

es is

sued

by

the

Gove

rnm

ent a

genc

y).

201

/01/

2019

06/0

1/20

22•

Clas

sific

atio

n so

ciet

ies

appr

oved

and

regi

ster

ed w

ith

the

Dire

ctor

of M

erch

ant

Ship

ping

und

er th

e M

erch

ant

Ship

ping

Act

No.

52

of 1

971

Min

istry

of P

orts

an

d Sh

ippi

ngM

inis

try o

f Fis

herie

s an

d Aq

uatic

Res

ourc

es; E

xpor

t De

velo

pmen

t Boa

rd; B

oat

Build

ing

Tech

nolo

gy Im

-pr

ovem

ent I

nstit

ute

(BTI

)

Page 53: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

43

[ PLaN OF actiON 2018-2022 ]

Stra

tegi

c ob

ject

ives

Oper

atio

nal

obje

ctiv

esAc

tivity

Prio

rity

Star

t dat

eEn

d da

teTa

rget

sLe

adin

g im

plem

entin

g pa

rtne

rs

Supp

ortin

g im

plem

entin

g pa

rtne

rsIn

dica

tive

cost

s (U

SD)

1: T

o cr

eate

an

ena

blin

g en

viro

nmen

t fo

r ind

ustry

de

velo

pmen

t by

upd

atin

g re

gula

tions

and

in

frast

ruct

ure.

1.1:

Rev

ise

key

regu

latio

ns

limiti

ng in

dust

ry

grow

th.

1.1.

5 Ta

ke a

pol

icy

deci

sion

to a

llow

subl

easi

ng o

f sp

ace

to fo

reig

n pa

rtner

s by

set

ting

up a

JV

in o

rder

to

pro

mot

e an

d en

able

loca

l BOI

com

pani

es to

attr

act

fore

ign

boat

bui

lder

s.

101

/04/

2018

31/1

2/20

18•

Sub-

leas

ing

of s

pace

allo

wed

for j

oin

vent

ures

.Bo

ard

of In

vest

-m

ent (

BOI)

Min

istry

of F

ishe

ries

and

Aqua

tic R

esou

rces

; Min

-is

try o

f Ind

ustry

and

Com

-m

erce

; Exp

ort D

evel

opm

ent

Boar

d

1.1.

6 Ex

empt

from

upf

ront

VAT

, PAL

and

NBT

on

the

trans

actio

n of

sel

ling

and

saili

ng y

acht

s un

der H

S co

de 8

903.

91 (S

ailb

oats

, with

or w

ithou

t aux

iliar

y m

otor

) and

impo

se C

usto

ms

dutie

s on

impo

rts o

f se

cond

-han

d ya

chts

and

boa

ts to

Sri

Lank

a.

101

/04/

2018

31/1

2/20

18•

Valu

e Ad

ded

Tax A

ct N

o. 1

4 Of

20

02 a

men

ded;

Ports

And

Airp

orts

Dev

elop

men

t Le

vy (A

men

dmen

t) Ac

t, No

. 21

of 2

016

amen

ded;

• Na

tion

Build

ing

Tax A

ct, N

o. 0

9 of

200

9, A

men

ded

Act,

No.1

3 of

201

7 am

ende

d;•

Cust

oms

Natio

nal I

mpo

rts Ta

riff

Guid

e (S

ectio

n XV

II/Ch

apte

r 89)

am

ende

d;•

Cust

oms

Natio

nal I

mpo

rts Ta

riff

Guid

e (S

ectio

n XV

II/Ch

apte

r 89)

up

date

d an

d pu

blis

hed

Depa

rtmen

t of

Fisc

al P

olic

y (M

inis

try o

f Fi-

nanc

e)

Min

istry

of F

ishe

ries

and

Aqua

tic R

esou

rces

; Min

-is

try o

f Ind

ustry

and

Com

-m

erce

; Sri

Lank

a Cu

stom

s;

Expo

rt De

velo

pmen

t Boa

rd

1.1.

7 Im

plem

ent r

egul

atio

n an

d ru

les

for b

oat o

wner

-sh

ip o

fferin

g fa

vour

able

con

ditio

ns to

buy

and

loca

te

the

boat

s in

Sri

Lank

a th

ough

am

endi

ng th

e M

erch

ant

Ship

ping

act

no.

52

of 1

971

201

/01/

2019

31/1

2/20

21•

New

guid

elin

es in

trodu

ced

in

Mer

chan

t shi

ppin

g ac

t no

52

of 1

971;

Min

istry

of P

orts

an

d Sh

ippi

ngBo

ard

of In

vest

men

t (BO

I);

Expo

rt De

velo

pmen

t Boa

rd;

Boat

Bui

ldin

g Te

chno

logy

Im

prov

emen

t Ins

titut

e (B

TI)

20,

000

1.1.

8 De

velo

p a

finan

cial

sch

eme

to p

urch

ase

a bo

at

in w

hich

an

owne

r pay

s le

ss th

an h

alf o

f the

val

ue o

f a

boat

and

a fi

nanc

ial c

ompa

ny (s

uch

as a

cha

rter

com

pany

) fin

ance

s th

e re

st o

f the

pur

chas

e pr

ice

in

exch

ange

for u

sing

a b

oat s

ever

al m

onth

s pe

r yea

r.

201

/01/

2020

31/1

2/20

22•

Fina

ncia

l sch

eme

for f

inan

cing

of

boa

ts fo

r tim

e-sh

arin

g be

twee

n bo

at o

wner

s an

d ch

arte

r com

pani

es

Depa

rtmen

t of

Fisc

al P

olic

y M

oF

Cent

ral B

ank

of S

ri La

nka;

M

inis

try o

f Ind

ustry

and

Co

mm

erce

; Min

istry

of D

e-ve

lopm

ent S

trate

gies

and

In

tern

atio

nal T

rade

; Boa

rd

of In

vest

men

t (BO

I); E

xpor

t De

velo

pmen

t Boa

rd; B

oat

Build

ing

Tech

nolo

gy Im

-pr

ovem

ent I

nstit

ute

(BTI

)

50,

000

1.1.

9 Al

low

fore

ign

insu

ranc

e co

mpa

nies

to p

rovi

de

cove

rage

for l

arge

and

spe

cific

liab

ility

risk

s fo

r ya

chts

ope

ratin

g ch

arte

r and

tour

ism

ser

vice

s by

re-

visi

ng k

ey re

gula

tions

lim

iting

indu

stry

gro

wth.

101

/04/

2018

31/1

2/20

18•

Regu

latio

n of

Insu

ranc

e In

dust

ry

Act N

o 43

of 2

000

(RII

Act)

amen

ded

Min

istry

of

Deve

lopm

ent

Stra

tegi

es a

nd

Inte

rnat

iona

l Tr

ade

Min

istry

of I

ndus

try a

nd

Com

mer

ce; M

inis

try o

f Fi

nanc

e; E

xpor

t Dev

elop

-m

ent B

oard

10,

000

1.1.

10 D

evel

op a

nd im

plem

ent a

dequ

ate

HS e

ight

di

git l

evel

cod

es fo

r mar

ine

indu

stry

inpu

ts to

allo

w th

e na

tiona

l cla

ssifi

catio

n fo

r im

porte

d pr

oduc

ts fo

r bo

at b

uild

ing

com

pani

es to

be

cate

goriz

ed u

nder

m

ater

ials

for b

oat b

uild

ing

and

not u

nder

con

stru

c-tio

n m

ater

ials

.

101

/04/

2018

30/0

6/20

19•

Deve

lop

and

impl

emen

t ad

equa

te H

S-8

digi

ts le

vel

code

s fo

r mar

ine

indu

stry

in

puts

to a

llow

the

accu

rate

na

tiona

l cla

ssifi

catio

n fo

r im

porte

d pr

oduc

ts fo

r boa

t bu

ildin

g co

mpa

nies

to b

e ca

tego

rized

und

er m

ater

ials

for

boat

bui

ldin

g an

d no

t und

er

cons

truct

ion

mat

eria

ls.

Depa

rtmen

t of

Trad

e an

d In

-ve

stm

ent P

olic

y (M

inis

try o

f Fi-

nanc

e)

Boar

d of

Inve

stm

ent (

BOI);

Sr

i Lan

ka C

usto

ms;

Boa

t Bu

ildin

g Te

chno

logy

Im-

prov

emen

t Ins

titut

e (B

TI)

40,

000

Page 54: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

44

[ SRI LANKA BOAT BUILDING STRATEGY ]

Stra

tegi

c ob

ject

ives

Oper

atio

nal

obje

ctiv

esAc

tivity

Prio

rity

Star

t dat

eEn

d da

teTa

rget

sLe

adin

g im

plem

entin

g pa

rtne

rs

Supp

ortin

g im

plem

entin

g pa

rtne

rsIn

dica

tive

cost

s (U

SD)

1: T

o cr

eate

an

ena

blin

g en

viro

nmen

t fo

r ind

ustry

de

velo

pmen

t by

upd

atin

g re

gula

tions

and

in

frast

ruct

ure.

1.2:

Sim

plify

an

d ha

rmon

ize

the

oper

atio

nal

proc

edur

es in

bo

at b

uild

ing

indu

stry

thro

ugh

the

impr

oved

co

ordi

natio

n be

twee

n ag

enci

es

and

gove

rnm

ent

inst

itutio

ns.

1.2.

1 Co

ordi

nate

with

an

appr

opria

te G

over

nmen

t ag

enci

es o

r dep

artm

ents

(MIC

) to

be re

spon

sibl

e fo

r the

boa

t bui

ldin

g in

dust

ry to

set

up

a on

e-st

op

shop

to:

• Gi

ve te

chni

cal s

uppo

rt;•

Reso

lve

issu

es;

• Pr

ovid

e pe

rmit

with

in a

lim

ited

time

fram

e;•

Prom

ote

boat

bui

ldin

g, y

acht

cha

rterin

g an

d m

arin

a op

erat

ions

.

The

one-

stop

sho

p wi

ll co

ordi

nate

act

iviti

es a

mon

g:

• M

inis

try o

f Por

ts a

nd S

hipp

ing

• Sr

i Lan

ka P

ort A

utho

rity

• M

oD•

Navy

• To

uris

m D

evel

opm

ent A

utho

rity

• Cu

stom

s•

Depa

rtmen

t of I

mm

igra

tion

and

Emig

ratio

n•

Depa

rtmen

t of W

ildlif

e Co

nser

vatio

n (fo

r wha

le

watc

hing

)•

Coas

t Gua

rd.

101

/04/

2018

30/0

3/20

19•

Setti

ng u

p of

a O

ne-s

top-

shop

at

the

appr

opria

te G

over

nmen

t in

stitu

tion

com

plet

ed

• On

e-st

op-s

hop

oper

atio

nal a

nd

ress

ourc

ed

Min

istry

of

Deve

lopm

ent

Stra

tegi

es a

nd

Inte

rnat

iona

l Tr

ade

Min

istry

of F

ishe

ries

and

Aqua

tic R

esou

rces

; Min

-is

try o

f Ind

ustry

and

Com

-m

erce

; Exp

ort D

evel

opm

ent

Boar

d; P

rime

Min

iste

r's

Offic

e

30,

000

1.2.

2 De

sign

and

ope

ratio

naliz

e a

digi

tal i

nfor

ma-

tion

and

regi

stra

tion

dire

ctor

y fo

r boa

t man

ufac

ture

rs

(por

tal t

o pr

ovid

e in

form

atio

n ab

out c

ompa

ny s

ize,

type

of b

oats

pro

duce

d, c

onta

ct d

etai

ls, e

tc.).

101

/04/

2018

31/1

2/20

22•

Digi

tized

boa

t man

ufac

ture

rs

dire

ctor

y es

tabl

ishe

d M

inis

try o

f In-

dust

ry a

nd C

om-

mer

ce

Info

rmat

ion

and

Com

mun

i-ca

tion

Tech

nolo

gy A

genc

y (IC

TA);

Boat

Bui

ldin

g Te

chno

logy

Impr

ovem

ent

Inst

itute

(BTI

)

40,0

00

1.3:

Pro

vide

ad

equa

te

infra

stru

ctur

e an

d fa

cilit

ies

for

boat

bui

ldin

g an

d na

viga

tion.

1.3.

1 Im

prov

e ac

cess

to la

nd a

nd w

ater

with

sea

fro

ntag

e to

tran

sfer

and

exp

and

the

prod

uctio

n to

dif-

fere

nt lo

catio

ns b

y m

akin

g op

erat

iona

l the

pro

pose

d la

nd b

ank

by th

e Go

vern

men

t of S

ri La

nka.

Polic

y di

rect

ion

is e

xpec

ted

from

the

PMO

to e

nsur

e bo

at in

dust

ry is

incl

uded

as

a pr

iorit

y fo

cus

in la

nd

bank

gui

delin

es.

In th

e ab

senc

e of

an

oper

atio

nal l

and

bank

, coo

rdi-

nate

land

allo

catio

n th

roug

h on

e-st

op s

hop

(PM

O la

nd c

omm

ittee

) am

ong

follo

wing

pub

lic a

genc

ies:

• De

partm

ent o

f Wild

life

Cons

erva

tion

• Ce

ntra

l Env

ironm

enta

l Aut

horit

y•

Coas

t Con

serv

atio

n De

partm

ent

• Ur

ban

Deve

lopm

ent A

utho

rity

• Ce

ylon

Fis

hery

Har

bour

s Co

rpor

atio

n•

Natio

nal A

quat

ic R

esou

rces

Res

earc

h an

d De

velo

pmen

t Age

ncy

• M

inis

try o

f Meg

apol

is a

nd W

este

rn D

evel

opm

ent

• Di

visi

onal

sec

reta

ries

• Pr

ades

hiya

Sab

has.

101

/04/

2018

31/1

2/20

20•

Land

ban

k po

licy

oper

atio

nal;

• Re

gula

tion

on th

e co

ordi

natio

n of

rele

vant

inst

itutio

ns o

n la

nd

allo

catio

n ga

zette

d;•

Land

allo

cate

d to

boa

t bui

ldin

g in

dust

ry;

• St

ate

Land

Ord

inan

ce N

o. 0

8 19

47 a

nd L

and

deve

lopm

ent

Ordi

nanc

e No

, 19

of 1

935

amen

ded

To b

e Fi

nal-

ised

by

Min

istry

of

Lan

ds a

nd

Parli

amen

tary

Re

form

s

Min

istry

of F

ishe

ries

and

Aqua

tic R

esou

rces

; Min

is-

try o

f Por

ts a

nd S

hipp

ing;

Bo

ard

of In

vest

men

t (BO

I);

Expo

rt De

velo

pmen

t Boa

rd;

Min

istry

of M

egap

olis

and

W

este

rn D

evel

opm

ent

Page 55: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

45

[ PLaN OF actiON 2018-2022 ]

Stra

tegi

c ob

ject

ives

Oper

atio

nal

obje

ctiv

esAc

tivity

Prio

rity

Star

t dat

eEn

d da

teTa

rget

sLe

adin

g im

plem

entin

g pa

rtne

rs

Supp

ortin

g im

plem

entin

g pa

rtne

rsIn

dica

tive

cost

s (U

SD)

1: T

o cr

eate

an

ena

blin

g en

viro

nmen

t fo

r ind

ustry

de

velo

pmen

t by

upd

atin

g re

gula

tions

and

in

frast

ruct

ure.

1.3:

Pro

vide

ad

equa

te

infra

stru

ctur

e an

d fa

cilit

ies

for

boat

bui

ldin

g an

d na

viga

tion.

1.3.

2 Al

loca

te la

nd fo

r and

prio

ritize

a n

ew w

ater

-fro

nt E

PZ a

nd in

dust

ry c

lust

ers

with

boa

t ram

ps fo

r bo

at b

uild

ing,

repa

irs a

nd re

late

d se

rvic

es. T

his

will

incl

ude:

• Fa

cilit

ies

to b

uild

, tes

t and

laun

ch fo

r exp

ort b

oats

sa

iling

on

thei

r own

pow

er;

• Ne

w in

vest

ors

to in

vest

in n

ew b

oat i

ndus

try

faci

litie

s;•

Inte

rnat

iona

l boa

t ope

rato

rs to

obt

ain

serv

ices

su

ch a

s bo

at p

arkin

g, m

aint

enan

ce, r

epai

rs, s

pare

pa

rts, e

tc.

The

loca

tions

iden

tifie

d ar

e Tr

inco

mal

ee, C

hilla

w,

Beru

wala

, Neg

ombo

and

Ham

bant

ota.

Expa

nd th

e ex

istin

g Ko

ggal

a Fr

ee Tr

ade

Zone

to b

e co

nver

ted

imm

edia

tely

to a

sea

fron

t.

101

/04/

2018

31/1

2/20

22•

EPZ

serv

ices

for n

atio

nal a

nd

inte

rnat

iona

l boa

t ope

rato

rs

prov

ided

;•

Kogg

ala

Free

Trad

e Zo

ne

expa

nded

Min

istry

of

Deve

lopm

ent

Stra

tegi

es a

nd

Inte

rnat

iona

l Tr

ade

Min

istry

of N

atio

nal P

oli-

cies

and

Eco

nom

ic A

ffairs

; M

inis

try o

f Fis

herie

s an

d Aq

uatic

Res

ourc

es; M

inis

-try

of P

orts

and

Shi

ppin

g;

Boar

d of

Inve

stm

ent (

BOI)

5,0

00,0

00

1.3.

3 Re

leas

e th

e la

nd to

cre

ate

mar

inas

, bas

ic fa

-ci

litie

s (b

reak

wate

rs, w

ater

sys

tem

, rec

yclin

g) a

nd

infra

stru

ctur

e to

pro

vide

ser

vice

s fo

r mar

inas

, vis

iting

ya

chts

and

boa

ts.

Follo

wing

ste

ps re

quire

d:

• Co

mpl

ete

the

deve

lopm

ent o

f thr

ee e

xistin

g m

ini-

mar

inas

: »M

iriss

a »Be

ruwe

la »Hi

kkad

uwa

• De

velo

p, th

roug

h ca

ll fo

r exp

ress

ion

of in

tere

st,

fully

fled

ged

mar

ina

infra

stru

ctur

e in

clud

ing

faci

litie

s fo

r sup

er-y

acht

s (w

ith a

dequ

ate

powe

r su

pply

, lon

ger j

etty

, etc

.) in

follo

wing

ord

er:

»Ga

lle »Di

ckow

ita »Tr

inco

mal

ee•

Cond

uct f

easi

bilit

y st

udie

s fo

r: »Ha

mba

ntot

a fis

herie

s ha

rbou

r »Ki

rinda

»Ta

ngal

le »Ni

lwel

a »Am

bala

ngod

a »Pn

adur

a »Ch

ilaw

• Bu

ild a

par

tner

ship

with

inte

rnat

iona

l mar

ina

orga

niza

tions

to p

rovi

de c

ouns

el in

dev

elop

ing

mar

ina

rela

ted

serv

ices

.

101

/04/

2018

31/1

2/20

22•

Land

rele

ased

for e

stab

lishm

ent

of m

arin

as;

• Ba

sic

infra

stru

ctur

e by

GoS

L co

mpl

eted

Cal

l for

tend

ers

for

3 m

arin

as c

ompl

eted

by

end

of 2

018;

• Fe

asib

ility

stu

dies

for 7

mar

inas

co

mpl

eted

;•

3 ex

istin

g m

ini m

arin

as fu

lly

oper

atio

nal b

y 20

22;

• Pa

rtner

ship

with

inte

rnat

iona

l ex

perts

est

ablis

hed

Boar

d of

Inve

st-

men

t (BO

I)M

inis

try o

f Nat

iona

l Pol

i-ci

es a

nd E

cono

mic

Affa

irs;

Min

istry

of P

orts

and

Shi

p-pi

ng; M

inis

try o

f Meg

apol

is

and

Wes

tern

Dev

elop

men

t

300

,000

Page 56: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

46

[ SRI LANKA BOAT BUILDING STRATEGY ]

Stra

tegi

c ob

ject

ives

Oper

atio

nal

obje

ctiv

esAc

tivity

Prio

rity

Star

t dat

eEn

d da

teTa

rget

sLe

adin

g im

plem

entin

g pa

rtne

rs

Supp

ortin

g im

plem

entin

g pa

rtne

rsIn

dica

tive

cost

s (U

SD)

2: T

o ra

ise

the

indu

stry

’s

perf

orm

ance

th

roug

h pa

rtne

rshi

ps

and

targ

eted

in

nova

tion.

2.1:

Enh

ance

te

chno

logy

tra

nsfe

r th

roug

h th

e im

plem

enta

tion

of

a pu

blic

–priv

ate

part

ners

hip.

2.1.

1 At

tract

inve

stor

s to

rein

forc

e lo

cal p

rodu

c-tio

n of

inpu

ts fo

r boa

t bui

ldin

g an

d at

tract

inno

vativ

e m

anuf

actu

ring

tech

nolo

gies

. Mai

n ar

eas

for i

nves

t-m

ent i

nclu

de:

• En

hanc

ing

loca

l pro

duct

ion

of m

ater

ials

(res

ins,

pa

ints

, coa

tings

);•

Inst

allin

g bo

nded

war

ehou

ses;

• Se

tting

up

the

man

ufac

turin

g of

equ

ipm

ent a

nd

acce

ssor

ies

(eng

ines

, har

dwar

e, c

ompo

nent

s);

• Bu

ildin

g re

cycl

ing

plan

t.

BOI t

o ta

rget

iden

tifie

d pa

rtner

ship

/inve

stor

s.

101

/04/

2018

31/1

2/20

22•

Inve

stm

ent t

arge

ting

mat

eria

ls

deve

lope

d;•

Prom

otio

n ca

mpa

igns

ong

oing

;•

5 in

vest

ors

reac

hed

per y

ear;

• 1

inve

stor

attr

acte

d pe

r yea

r

Boar

d of

Inve

st-

men

t (BO

I)M

inis

try o

f Ind

ustry

and

Co

mm

erce

; Min

istry

of D

e-ve

lopm

ent S

trate

gies

and

In

tern

atio

nal T

rade

; Boa

t Bu

ildin

g Te

chno

logy

Im-

prov

emen

t Ins

titut

e (B

TI)

20,

000

2.1.

2 At

tract

inve

stor

s to

dev

elop

mar

ine

indu

stry

re-

late

d se

rvic

es. M

ain

area

s fo

r inv

estm

ent i

nclu

de:

• Bu

ildin

g of

add

ition

al b

oat a

nd d

ocky

ards

with

ex

port

serv

ices

;•

Inst

allin

g m

arin

a fa

cilit

ies;

• At

tract

ing

mar

ina

oper

ator

s;•

Attra

ctin

g ch

arte

r com

pani

es;

• De

velo

ping

wat

er tr

ansp

orta

tion

faci

litie

s an

d se

rvic

es a

t nat

iona

l mar

ket (

long

er te

rm).

BOI t

o ta

rget

iden

tifie

d pa

rtner

ship

/inve

stor

s.

101

/04/

2018

31/1

2/20

22•

5 in

vest

ors

targ

eted

per

yea

r;•

1 in

vest

or a

ttrac

ted

per y

ear

Boar

d of

Inve

st-

men

t (BO

I)M

inis

try o

f Ind

ustry

and

Co

mm

erce

; Min

istry

of D

e-ve

lopm

ent S

trate

gies

and

In

tern

atio

nal T

rade

; Boa

t Bu

ildin

g Te

chno

logy

Im-

prov

emen

t Ins

titut

e (B

TI)

2.1.

3 Bu

ild li

nks

with

oth

er in

dust

ries

(tour

ism

, lo

gist

ics,

ele

ctro

nics

) by

conn

ectin

g le

adin

g co

m-

pani

es th

roug

h B2

B m

eetin

gs to

ince

ntiv

ize s

ourc

ing

from

dom

estic

sup

plie

rs a

nd to

pro

mot

e lo

cal s

ervi

ce

oppo

rtuni

ties.

201

/04/

2019

31/1

2/20

22•

Annu

al m

eetin

g fo

r eac

h in

dust

ry h

eld

Min

istry

of I

n-du

stry

and

Com

-m

erce

Boar

d of

Inve

stm

ent (

BOI);

Ex

port

Deve

lopm

ent B

oard

; Bo

at B

uild

ing

Tech

nolo

gy

Impr

ovem

ent I

nstit

ute

(BTI

)

20,

000

2.2:

Bui

ld

rela

tions

hips

be

twee

n in

dust

ry

and

acad

emia

to

impr

ove

skills

an

d ca

paci

ties.

2.2.

1 Ho

ld a

n an

nual

dia

logu

e be

twee

n th

e ac

adem

ia

and

boat

indu

stry

com

pani

es to

:

• Id

entif

y th

e sk

ills

gap

and

to a

ddre

ss th

e R&

D ne

eds

of th

e in

dust

ry;

• De

velo

p an

d im

plem

ent u

nive

rsity

and

TVE

T pr

ogra

mm

es fo

r spe

cific

boa

t bui

ldin

g te

chni

cal

skill

s (c

oatin

g ap

plic

ator

s, fi

breg

lass

tech

nici

ans,

ca

rpen

ters

, wel

ders

, fitt

ers)

;•

Incl

ude

mar

ine

ISSU

ES a

nd b

oat b

uild

ing

as

optio

nal s

ubje

cts

in th

e sc

hool

cur

ricul

um.

(BTI

to c

onve

ne th

e di

alog

ue.)

101

/04/

2018

31/0

3/20

22•

Annu

al m

eetin

g co

mpl

eted

;•

Initi

al d

ialo

gue

to b

e he

ld in

the

first

qua

rter i

n 20

18

Min

istry

of S

kills

De

velo

pmen

t an

d Vo

catio

nal

Trai

ning

Min

istry

of E

duca

tion;

Min

-is

try o

f Hig

her E

duca

tion

and

High

ways

; Boa

t Bui

ld-

ing

Tech

nolo

gy Im

prov

e-m

ent I

nstit

ute

(BTI

)

2.2.

2 Pr

omot

e an

d en

cour

age

oppo

rtuni

ties

for t

ech-

nici

ans

to w

ork

in th

e bo

at b

uild

ing

indu

stry

thro

ugh

awar

enes

s ra

isin

g ca

mpa

ign

and

job

fairs

am

ong

colle

ge a

nd u

nive

rsity

stu

dent

s an

d gr

adua

tes.

201

/04/

2018

31/1

2/20

22•

Annu

al jo

b fa

ir or

gani

zed;

• In

itial

job

fair

held

in th

e fir

st

quar

ter i

n 20

19

Boat

Bui

ld-

ing

Tech

nolo

gy

Impr

ovem

ent

Inst

itute

(BTI

)

Min

istry

of D

evel

opm

ent

Stra

tegi

es a

nd In

tern

atio

nal

Trad

e; M

inis

try o

f Hig

her

Educ

atio

n an

d Hi

ghwa

ys;

Min

istry

of S

kills

Dev

el-

opm

ent a

nd V

ocat

iona

l Tr

aini

ng

50,

000

Page 57: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

47

[ PLaN OF actiON 2018-2022 ]

Stra

tegi

c ob

ject

ives

Oper

atio

nal

obje

ctiv

esAc

tivity

Prio

rity

Star

t dat

eEn

d da

teTa

rget

sLe

adin

g im

plem

entin

g pa

rtne

rs

Supp

ortin

g im

plem

entin

g pa

rtne

rsIn

dica

tive

cost

s (U

SD)

2: T

o ra

ise

the

indu

stry

’s

perf

orm

ance

th

roug

h pa

rtne

rshi

ps

and

targ

eted

in

nova

tion.

2.2:

Bui

ld

rela

tions

hips

be

twee

n in

dust

ry

and

acad

emia

to

impr

ove

skills

an

d ca

paci

ties.

2.2.

3 De

velo

p an

d im

plem

ent a

trai

ning

pro

gram

by

auth

orize

d/ a

ccre

dite

d in

stitu

tions

for b

oat a

nd y

acht

cr

ew m

embe

rs (i

nclu

ding

boa

t mas

ters

, boa

t eng

i-ne

ers,

skip

pers

, ste

ward

s, e

ngin

e op

erat

or/te

chni

-ci

ans,

dec

khan

ds, c

hefs

etc

.).

101

/04/

2018

31/1

2/20

22•

Deta

iled

sylla

bus

by th

e in

stitu

tions

dev

elop

ed w

ithin

6

mon

ths;

Appr

oval

to ru

n th

e pr

ogra

mm

e gr

ante

d

Min

istry

of S

kills

De

velo

pmen

t an

d Vo

catio

nal

Trai

ning

Min

istry

of P

orts

and

Sh

ippi

ng; B

oat B

uild

ing

Tech

nolo

gy Im

prov

emen

t In

stitu

te (B

TI) ;

Col

ombo

In

tern

atio

nal N

autic

al

and

Engi

neer

ing

Colle

ge

(CIN

EC)

100

,000

2.3:

Stre

ngth

en

R&D

and

prod

uct

deve

lopm

ent

faci

litie

s at

key

in

stitu

tions

to

deve

lop

capa

city

fo

r inn

ovat

ion

in

the

boat

indu

stry

.

2.3.

1 Es

tabl

ish

a fu

nd fo

r spe

cial

ized

R&D,

pro

duct

de

velo

pmen

t, in

nova

tion

and

test

ing

in th

e bo

at

build

ing

indu

stry

. Fun

ding

to b

e pr

ovid

ed to

follo

w-in

g in

stitu

tions

bas

ed o

n su

bmis

sion

of p

ropo

sals

to

the

Eval

uatio

n Co

mm

ittee

:

• Co

lom

bo In

tern

atio

nal N

autic

al a

nd E

ngin

eerin

g Co

llege

;•

Univ

ersi

ty o

f Mor

atuw

a;•

Ocea

n Un

iver

sity

; •

Univ

ersi

ty o

f Per

adid

eniy

a;•

Kote

lawa

la D

efen

ce U

nive

rsity

;•

Lank

a Hy

drau

lic In

stitu

te L

td.

Colo

mbo

Doc

kyar

d an

d ot

her p

rivat

e se

ctor

ope

rato

rs

to b

e in

volv

ed in

impl

emen

tatio

n

201

/04/

2018

31/1

2/20

22•

Rese

arch

and

tech

nolo

gy

impr

ovem

ent t

owar

d gr

een

man

ufac

turin

g an

d us

ing

gree

n en

ergy

in o

pera

tion

for b

oats

co

mpl

eted

Min

istry

of I

n-du

stry

and

Com

-m

erce

Boat

Bui

ldin

g Te

chno

logy

Im

prov

emen

t Ins

titut

e (B

TI)

; Uni

vers

ity o

f Mor

atuw

a

100

,000

2.3.

2 Es

tabl

ish

mod

el-te

stin

g fa

cilit

ies

for n

ew p

rod-

uct d

evel

opm

ent f

or b

oat i

ndus

try b

ased

on

rese

arch

ce

ntre

s of

key

uni

vers

ities

and

priv

ate

inst

itutio

ns a

c-cr

edite

d by

the

GOSL

(lin

ked

to 2

.3.1

).

301

/04/

2018

31/1

2/20

22•

Test

ing

faci

lity

esta

blis

hed

Min

istry

of I

n-du

stry

and

Com

-m

erce

Min

istry

of S

kills

Dev

el-

opm

ent a

nd V

ocat

iona

l Tr

aini

ng; E

xpor

t Dev

elop

-m

ent B

oard

; Boa

t Bui

ldin

g Te

chno

logy

Impr

ovem

ent

Inst

itute

(BTI

)

50,

000

2.4:

Stre

ngth

en

the

orga

nisa

tion

of th

e bo

at

indu

stry

.

2.4.

1 Ho

ld a

qua

rterly

boa

t bui

ldin

g in

dust

ry a

dvis

ory

com

mitt

ee, l

ed b

y th

e pr

ivat

e se

ctor

, to:

• Co

nfirm

stra

tegi

c m

arke

t orie

ntat

ion

of th

e in

dust

ry;

• Pl

an a

nnua

l im

plem

enta

tion

of th

e st

rate

gic

orie

ntat

ions

;•

Trac

k im

plem

enta

tion

prog

ress

by

lead

im

plem

entin

g pa

rtner

s;•

Asse

ss th

e ne

ed to

est

ablis

h ad

equa

te s

uppo

rt m

echa

nism

s (p

olic

y, re

gula

tions

, ins

titut

ions

, et

c.).

101

/04/

2018

31/1

2/20

22•

Com

mitt

ee m

embe

rs a

ppoi

nted

;•

4 m

eetin

gs p

er y

ear c

ondu

cted

Expo

rt De

velo

p-m

ent B

oard

Min

istry

of F

ishe

ries

and

Aqua

tic R

esou

rces

; M

inis

try o

f Ind

ustry

and

Co

mm

erce

; Min

istry

of D

e-ve

lopm

ent S

trate

gies

and

In

tern

atio

nal T

rade

5,0

00

2.4.

2 Es

tabl

ish

Natio

nal B

oat B

uild

ing

Asso

ciat

ion

actin

g on

beh

alf o

f the

indu

stry

and

repr

esen

t all

stak

ehol

ders

:

• To

be

reco

gnize

d as

the

natio

nal a

pex b

oat

build

ing

repr

esen

tativ

e bo

dy;

• To

do

stra

tegi

c pl

anni

ng fo

r ind

ustry

dev

elop

men

t;•

To d

evel

op a

nd im

plem

ent a

n an

nual

pro

mot

ion

plan

.

201

/04/

2019

27/0

9/20

20•

Indu

stry

ass

ocia

tion

crea

ted;

• As

soci

atio

n bu

sine

ss p

lan

defin

ed

Boat

Bui

ld-

ing

Tech

nolo

gy

Impr

ovem

ent

Inst

itute

(BTI

)

Min

istry

of I

ndus

try a

nd

Com

mer

ce; M

inis

try o

f Po

rts a

nd S

hipp

ing;

Exp

ort

Deve

lopm

ent B

oard

50,

000

Page 58: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

48

[ SRI LANKA BOAT BUILDING STRATEGY ]

Stra

tegi

c ob

ject

ives

Oper

atio

nal

obje

ctiv

esAc

tivity

Prio

rity

Star

t dat

eEn

d da

teTa

rget

sLe

adin

g im

plem

entin

g pa

rtne

rs

Supp

ortin

g im

plem

entin

g pa

rtne

rsIn

dica

tive

cost

s (U

SD)

2: T

o ra

ise

the

indu

stry

’s

perf

orm

ance

th

roug

h pa

rtne

rshi

ps

and

targ

eted

in

nova

tion.

2.4:

Stre

ngth

en

the

orga

nisa

tion

of th

e bo

at

indu

stry

.

2.4.

3 Pr

ovid

e ca

paci

ty-b

uild

ing

to B

oat B

uild

ing

Tech

nolo

gy In

stitu

te (B

TI) t

o co

llect

, ana

lyse

and

di

ssem

inat

e da

ta a

nd in

form

atio

n on

mar

ket d

eman

d an

d tre

nds.

201

/04/

2019

31/0

3/20

22•

2 tra

inin

g pe

r yea

r for

cap

acity

bu

ildin

g of

BTI

to c

olle

ct,

anal

yse

and

diss

emin

ate

data

he

ld

Min

istry

of

Deve

lopm

ent

Stra

tegi

es a

nd

Inte

rnat

iona

l Tr

ade

Min

istry

of N

atio

nal P

oli-

cies

and

Eco

nom

ic A

ffairs

; M

inis

try o

f Por

ts a

nd

Ship

ping

; Boa

t Bui

ldin

g Te

chno

logy

Impr

ovem

ent

Inst

itute

(BTI

)

20,

000

3: T

o en

hanc

e na

tiona

l and

in

tern

atio

nal

visi

bilit

y of

Sri

Lank

an m

arin

e in

dust

ry.

3.1:

Rai

se

awar

enes

s ab

out t

he

pote

ntia

l ind

ustry

im

port

ance

at

natio

nal a

nd

inte

rnat

iona

l le

vels

.

3.1.

1 Se

nsiti

ze p

ublic

aut

horit

ies

abou

t the

eco

nom

ic

impo

rtanc

e of

boa

t bui

ldin

g in

dust

ry th

roug

h aw

are-

ness

-rai

sing

and

cap

acity

bui

ldin

g tra

inin

g (fi

eld

visi

ts, m

eetin

gs w

ith p

rivat

e se

ctor

s an

d pr

omot

ing

succ

ess

stor

ies

in th

e m

edia

) inc

ludi

ng li

nkin

g wi

th

inte

rnat

iona

l “Gr

ow B

oatin

g Ca

mpa

ign”

.

201

/01/

2019

31/1

2/20

21•

Awar

enes

s of

pub

lic a

utho

ritie

s ra

ised

thro

ugh

annu

al fi

eld

visi

ts o

r ind

ustry

eve

nt

Boat

Bui

ld-

ing

Tech

nolo

gy

Impr

ovem

ent

Inst

itute

(BTI

)

Min

istry

of I

ndus

try a

nd

Com

mer

ce; M

inis

try o

f Po

rts a

nd S

hipp

ing;

Exp

ort

Deve

lopm

ent B

oard

20,

000

3.1.

2 Pr

ovid

e as

sist

ance

for b

oat b

uild

ing

com

pani

es

with

par

ticip

atio

n in

inte

rnat

iona

l boa

ting

and

mar

ine

rela

ted

show

s an

d ev

ents

.

Follo

wing

ste

ps re

quire

d:

• Pr

iorit

ize a

num

ber o

f eve

nts

(Sou

tham

pton

Bo

at S

how

in U

K, H

ISW

A in

-wat

er B

oat S

how

in H

olla

nd, D

usse

ldor

f boa

t sho

w in

Ger

man

y,

Sing

apor

e Bo

at S

how,

Sou

th K

orea

Inte

rnat

iona

l Bo

at S

how)

;•

Deve

lopi

ng m

arke

ting

stra

tegi

es in

clud

ing

a co

ncep

tion

of th

e st

and,

pro

mot

iona

l cam

paig

ns

(med

ia, d

igita

l mar

ketin

g);

• Su

ppor

ting

logi

stic

al c

oord

inat

ion.

101

/04/

2018

31/1

2/20

22•

Mar

ketin

g m

ater

ials

dev

elop

ed;

• At

leas

t 1 b

oat b

uild

ing

com

pany

pre

sent

ed y

early

at

inte

rnat

iona

l Boa

t Sho

w;•

Logi

stic

s su

ppor

t pro

vide

d

Expo

rt De

velo

p-m

ent B

oard

Min

istry

of I

ndus

try a

nd

Com

mer

ce; M

inis

try o

f For

-ei

gn A

ffairs

; Boa

t Bui

ldin

g Te

chno

logy

Impr

ovem

ent

Inst

itute

(BTI

)

150

,000

3.1.

3 Or

gani

ze a

boa

t sho

w in

Sri

Lank

a an

nual

ly

inst

ead

of e

very

two

year

s. T

his

can

be d

one

in p

art-

ners

hip

with

ICOM

IA.

101

/04/

2018

31/1

2/20

22•

Boat

sho

w he

ld y

early

(nex

t sh

ow to

be

held

in O

ctob

er

2018

at G

alle

)

Boat

Bui

ld-

ing

Tech

nolo

gy

Impr

ovem

ent

Inst

itute

(BTI

)

Min

istry

of T

ouris

m D

e-ve

lopm

ent a

nd C

hris

tian

Affa

irs; E

xpor

t Dev

elop

men

t Bo

ard

50,

000

3.2:

Stre

ngth

en

bran

ding

and

pr

omot

ion

of th

e bo

at in

dust

ry.

3.2.

1 As

sist

with

the

deve

lopm

ent o

f a b

rand

ing

stra

tegy

for t

he b

oat b

uild

ing

indu

stry

thro

ugh

join

t ef

forts

of b

oat i

ndus

try c

onso

rtium

of c

ompa

nies

by

deve

lopi

ng:

• co

mm

on in

dust

ry lo

go;

• m

arke

ting

mat

eria

ls;

• co

mm

unic

atio

n ch

anne

ls;

• pr

omot

iona

l cam

paig

n;•

prom

otio

nal a

ctiv

ities

thro

ugh

fore

ign

trade

m

issi

ons

and

cons

ulat

es.

101

/04/

2018

31/1

2/20

20•

Firs

t stra

tegy

to b

e pr

epar

ed b

y th

e Ad

viso

ry C

omm

ittee

in th

e fir

st q

uarte

r of 2

018;

• Al

l pro

mot

iona

l mat

eria

ls to

be

read

y fo

r the

Boa

t sho

w in

Oc

tobe

r 201

8;•

Succ

ess

stor

ies

of b

oat b

uild

ing

indu

stry

pub

lishe

d re

gula

rly

Expo

rt De

velo

p-m

ent B

oard

Boat

Bui

ldin

g Te

chno

logy

Im

prov

emen

t Ins

titut

e (B

TI)

50,

000

3.2.

2 En

hanc

e BT

I (or

sec

tor a

ssoc

iatio

n) w

ebsi

te

prov

idin

g in

form

atio

n ab

out S

ri La

nkan

pro

duct

s,

mar

ine

serv

ices

, boa

t sho

ws a

nd fe

stiv

als,

boa

ting

tour

ism

and

cha

rter (

by c

ombi

ning

effo

rts o

f BTI

and

ED

B we

bsite

s).

301

/01/

2020

31/1

2/20

22•

Web

site

abo

ut m

ariti

me

prod

ucts

and

ser

vice

s de

velo

ped

Expo

rt De

velo

p-m

ent B

oard

Min

istry

of I

ndus

try a

nd

Com

mer

ce; B

oat B

uild

ing

Tech

nolo

gy Im

prov

emen

t In

stitu

te (B

TI)

20,

000

Page 59: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

ANNEXES

Page 60: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

50

[ SRI LANKA BOAT BUILDING STRATEGY ]

APPENDIX 1 : LIST OF PARTICIPANTS IN THE PUBLIC-PRIVATE CONSULTATIONS

No. Name Designation Name of institution

1 Mr. Pierre Pringiers Chief Executive Officer BAFF Polymech (Pvt) Ltd

2 Mr. Kaushall Rajapaksa Director BAFF Polymech (Pvt) Ltd

3 Mr. W. U. K. M. A. Wijayakulathilaka Director - Investment Appraisal Board of Investment (BOI)

4 Major G. Dahanayaka Director Board of Investment -Koggala

5 Mr. P.W. Senevirathna Asst.Director Board of Investment -Koggala

6 Mr. Viran Fernando Assistant Director Board of Investment (BOI)

7 Ms. K. Ranatunga Admin.Officer Board of Investment -Koggala

8 Mr. Gamini Herath Managing Director Boat Building Technology Improvement Institute (BTI)

9 Mr. Priyantha Weeratunga Course Director Boat Building Technology Improvement Institute (BTI)

10 Mr. Lalantha Fernando Group Director Ceyline Eng. Services (Pvt) Ltd

11 Mr. S.P.A. Dahanayaka Habour Manager Ceylon Fishery Harbour Cooperation

12 Mr. P. Hettiarachchi Habour Manager Ceylon Fishery Harbour Cooperation

13 Mr. D.N. Dissanayaka Habour Manager Ceylon Fishery Harbour Cooperation

14 Mr. Nuwan Jayasinghe Manager - Operations Ceylon Fishery Harbours Corporation

15 Ms. Chitra Jayasinghe Deputy General Manager Ceylon Shipping Corporation Ltd

16 Mr. S.M. Jayaratne Design Engineer Cey-Nor Foundation Ltd.

17 Mr. Lal Hettiarachchi General Manager(Ship Building) Colombo Dockyard PLC (CDPLC)

18 Mr. D.L. Darshana Chandrasekara Head of Marketing- Ship Repairs Colombo Dockyard PLC (CDPLC)

19 Mr. W.M.M.A. Weerasinghe Engineer-Estimating & Invoicing Colombo Dockyard PLC (CDPLC)

20 Mr. M.C. L. Fernando Director General Department of Fisheries & Aquatic Resources

21 Mr. L.D.A. Udayakantha Marine Engineer Assistant Department of Fisheries and Aquatic Resources (DFAR)

22 Mr. M.K.W.S. Kumara Assistant Director Department of Fisheries & Aquatic Resources

23 Mr. G. S. Fernando Managing Director Dhanusha Marine Lanka Export

24 Mr. Sachitra Fernando Manager/Business Development Dhanusha Marine Lanka Export

25 Ms. Gayathri Amarasinghe Manager Sales & Operation Dhanusha Marine Lanka Export

26 Mr. K.W. Munasinarachchi Assistant Director (Planning) District Secretariat, Matara

27 Mr. Jagath Kumara Senior Surveyor and In charge of Sri Lanka Operations

Lloyd’s Register Marine

28 Ms. N. Jayasinghe Legal Officer Merchant Shipping Secretariat

29 Mr. P.V.T.P. Chandana Gov. Ship Surveyor Merchant Shipping Secretariat

30 Capt. Upul Peiris Government Ship Surveyor Merchant Shipping Secretariat

31 Eng. S. Prabhakar Representative Ministry of Development Strategies & International Trade

32 Mr. U G Ratnasiri Additional Secretary - Economic Affairs Ministry of National Policies & Economic Affairs

33 Mr. Kapila Sumanapala Director Administration Neil Fernando and Company (Pvt) Ltd

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No. Name Designation Name of institution

34 Mr. Jagath Chammika Managing Director NorthWest Marine (PVT) LTD

35 Mr. I D D Wickramasinghe Finance Manager NorthWest Marine (PVT) LTD

36 Ms. Shanali Samarasekara Assistant Director Ocean University /Regional Centre, Galle

37 Mr. P.U.I. Perera Director (Training) Ocean University of Sri Lanka

38 Mr. A. Jesudas S.D.A Ocean University of Sri Lanka- Jaffna

39 Mr. Jeevantha Fernando Director Ranil Marine

40 Mr. Tyrone Mendis - Ranil Marine

41 Mr. S.D. Premathilake General Manager Solas Marine Lanka (Pvt) Ltd.

42 Commodore. D.S. Bogahawaththa Commodore Manager IP CP Sri Lanka Navy

43 Mr. A.L. Mohammed Nowfer Dy. Chief Engineer Sri Lanka Ports Authority

44 Mr. Nirmal Silva - Sri Lanka Ports Authority

45 Mr. D.H.S.Wimalasiri DHM/Act.RM Sri Lanka Ports Authority - Galle

46 Dr. Udayanga Galappaththi Senior Lecturer University of Ruhuna

47 Dr. D.H.N. Munasinghe Professor University of Ruhuna

48 Dr. Sarath Obeysekara Executive Vice President/Chief Executive Officer

Walkers Colombo Shipyard (Pvt) Ltd

49 Mr. Nimal Gunawardane General Manager Walkers Colombo Shipyard (Pvt) Ltd

50 Dr. Lalith Samarakkody - Walkers Colombo Shipyard (Pvt) Ltd

51 Mr.Chamila Silva Sales & Marketing Engineer Walkers Colombo Shipyard (Pvt) Ltd

52 Ms. C. Dissanayake Director – Industrial Product Export Development Board

53 Ms. Mangala Maduwanthi Development Officer Export Development Board

54 Mr. Anura Wickramasekara Deputy Director Export Development Board

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APPENDIX 2 : DETAILED DESCRIPTION OF KEY MARKETS

Europe – Mediterranean Sea

Primary boating hub and charter destination due to the beauty of the coastline, good weather, sea conditions and infrastructure quality. High concentration of marinas and berthing along the entire EU coastline ( Spain, France, Italy, Slovenia, Croatia, Greece, Malta ). Market aimed at almost all FRP boat types ( outboard, personal water craft, rigid in-flatable boats, sailboats, motor yachts ) and super-yachts, mainly based on EU production and focused on quality and design. Major boat manufacturing in Italy and France ( the EU Recreational Craft Directive applies ). Common trade rules for importing boats from outside the EU. Main do-mestic markets are growing again after a long post-reces-sion stall. Lack of alignment in boat safety rules and boat use regulations ( for example, licences ). Free circulation of boats in EU waters for recreational purposes. National regu-lations for commercial use ( such as Customs and taxation ). Boat shows and nautical press are crucial in the sales pro-cess. Adequate distribution channels and assistance pro-grammes are essential.

North Europe and Scandinavia

Important boating countries with centuries of tradition in navigation; sailing is a popular activity. Several small mari-nas and yacht clubs, internal navigation is common; many private docks in the inland waters. Market is mainly aimed at seaworthy boats ( FRP or aluminium ) as sea and weath-er conditions can be tough; smaller boats for specific use ( lakes in Scandinavia and Finland; rivers and channels in the Netherlands, Belgium and Germany ). Sales mainly based on EU production and focused on quality. Major boat manufac-turing in the United Kingdom and Poland ( EU Recreational Craft Directive rules apply ). Common trade rules for import-ing boats from outside the EU. Main domestic markets are increasing again after a long post-recession stall. Free cir-culation of boats in EU waters for recreational purposes. National regulations occur for commercial use ( such as Customs and taxation ). Boat shows and nautical press are crucial in the sales process. Adequate distribution channels and assistance programmes are essential.

United States and Canada

Represent most of the global fleet and global marine pro-duction. Boating is a very popular activity : 100 million boat-ers, 20 million boats. Common boating destinations : lakes, Florida, California, northeast coast. US $ 120 billion annu-al contribution by the industry, four times direct spending. Most American boat owners ( 70 % ) have a household in-come of less than US $ 100,000. Boats that can be hauled

by trailer and are below 26 feet make up 95 % of the fleet; 85 % are outboard boats. Difficult market entry : 95 % of boats in United States are built in the United States. 75 % of im-ported boats from Italy, France, the United Kingdom and Germany. Top export destinations : Canada, Western Europe, Mexico. Manufacturing under United States Coast Guard/Environmental Protection Agency rules, American Boat and Yacht Council standards, National Marine Manufacturers Association certification. Consumer focused on quality and assistance. Participation in the main boat shows and local fairs is essential.

Latin America

Huge decline of the main boating markets ( Brazil and Argentina ) in the last years : strong recession and currency depreciation, persistent political and social instability. Large investments by America and EU boatbuilders in manufactur-ing facilities in Brazil to avoid the high import tariffs. Mature boating culture gives optimism for the potential market in long-term. Emerging market of Colombia with noticeable investment in marinas. Recent American investments in a new international boat show in Cartagena. Mexico : small market in a booming economy, with few barriers within North American Free Trade Agreement. The United States is the largest supplier of the Mexican market but there’s a lack of infrastructures and distribution channels. Panama : good po-tential to expand as new yachting destination; imports mainly are from the United States.

Australia and New Zealand

Water sports are a central part of the local culture ( boating, fishing, etc. ). Boating is a common activity : 1.5 million boats for 30 million inhabitants. Sailboats, sport, fishing and boats that can be hauled by a trailer are the most popular mod-els. Key production in Australia ( from small boats to super-yachts ) but for local market. Strong marina community for bigger craft. Main boating destinations : Auckland, Sydney, Gold Coast, Great Barrier Reef. Currency depreciation de-creased overseas imports ( mainly coming from the United States ). Free trade agreement between Australia and the United States. Difficult market entry due to own technical standards and rigid environmental rules. Local distribution channels are essential in the sales process.

Russia

After booming growth, economic sanctions, depreciation and fall in oil prices have stopped the internal market. High import tariffs and difficult access through local distributors. Lack of infrastructure. Adoption of a new Eurasian technical regulation

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impossible to comply with. Superyacht owners general-ly keep their boats abroad ( Mediterranean or Caribbean ).

Japan

Declining market for many years : affected by the lack of growth of general economy and suffering from the absence of interest in boating by the younger generation. The boat park has reduced considerably in the last years; a scrapping national scheme has been managed. Imports mainly from China, the United States and the EU but a small number of units. Top player in marine engine production, being a pri-mary exporter of outboard engines.

Middle East and Gulf countries

Key boating markets are the United Arab Emirates, Kuwait and Qatar. Growing interest in boating but with important se-curity issues. Target is luxury yachts segment. Infrastructures supply is expanding : luxury waterfronts and harbours ( such as the Dubai marina ). Local boatbuilders increase market share, improving quality and design.

South Africa

Very innovative boat production, with focus on the catama-ran sector ( power and sail ) and on luxury sailboats. Exports to EU and production leans to charter companies. Issues for the local industry with the decline in the African market.

China

Celebrated for a long time as a certain developing mar-ket, it never kept its promises. Heavy decline since 2015 because of anti-corruption policies, the lack of water and boating traditions and the different use of yachts, which generally do not sail but stay moored in the marinas. There ae 3,000 registered yachts but the regulations for boating are designed for merchant ships. Growing levels of boat and super-yacht manufacturing : production is focused on exports globally; quality and design is rapidly improving ( 20/25 boatbuilders can build to international standards ); labour costs are increasing. The marine equipment indus-try is also expanding.

Photo: (ITC) –Neil Marine

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Hong Kong ( China )

Good sales for yacht dealers despite the lack of berths. There are 10,000 registered pleasure craft ( 800 over 10 me-tres; 2700 over 20 metres ), in addition to 7,000 transportation vessels, fishing boats and sampans, with only 3,200 marina moorings and 800 dry berths : waiting lists are common.

Taiwan, China

The island is the largest Asian boatbuilder, though leisure boating has been allowed on Taiwanese waters for only a few years. High output of medium and large high quality yachts from few yards. Historically strong trade relations with United States : importing engines and equipment and ex-porting yachts.

Republic of Korea

Government programme to promote leisure boating start-ed ten years ago : 43 projects for new marinas before 2019, one main boat shows, in addition to some yachting festivals. Booming economy recently developed boating among a wealthy middle class, with an interest in small-medium size boats ( below 12 metres ) and a major focus in fishing activi-ties. There are 190,000 boating licences and 25,000 craft ( mainly powerboats, rigid inflatable boats and personal wa-ter craft ). Commerce benefits from World Trade Organization rules and compliance with intellectual property rights. Free trade agreement with 54 countries.

India

1,200 to 1,400 privately owned boats. One existing marina ( 34 berths ) and seven new projects ( for about 1,800 berths ). Import tax of 48 % can be a big problem for exporters. In November 2016 the Government published new guidelines for pleasure craft construction, survey and operation, an es-sential step for the boating economy boost.

Singapore

High concentration of high net worth individuals. About 1,800 craft, mostly powerboats, are registered ( 750 8-12 metres; 200 12-24 metres; 12 super-yachts ). The infrastructures in-cludes 900 wet berths in marinas/yacht clubs, 1,200 dry berths and several mooring buoys.

Indonesia

The Indonesian archipelago is strategically located on the Singapore/Australia yachting route. There are plans for development of about ten marinas in different islands : Indonesia is an ideal yachting destination and will be used for charter purposes.

Malaysia

Some marinas exist and are mainly used for sport and fish-ing purposes. Lack of internal market due to high import du-ties and taxes. Shipbuilding and repair sector had a strong downturn in the last few years but the sector is unable to convert to recreational boat manufacturing. Export incen-tives exist but currently there is only local limited production of small craft.

Thailand

Large numbers of expatriates led to a significant boating development. Phuket is the regional berthing hub, with four marinas and more than 1,500 berths and 45 charter compa-nies with over 250 yachts. Eleven marinas in the country but the Government is planning new locations. Three new boat shows and festivals in 2017/2018. Thailand Tourism Authority is writing a marketing plan for yachting. Trade is simplified in the Association of South East Asian Nations ( ASEAN ) area.

Viet Nam

Prosperous economy and rising wealth. First marina ( 220 berths ) opening in 2017 but three new projects are expected. Pleasure boat rules. Catamarans and trimaran manufactur-ing : skilled craftsmen. Attractive wage structure, with export incentives and ASEAN free trade. 35 % special tax for private boats and 10 % import duties.

Photo: © Neil Marine

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APPENDIX 3 : LIST OF EXPORTING BOAT BUILDING COMPANIES

( sorted by descending order of export value in 2016 )

company details Products exported in 2016 Export markets in 2016

COLOMBO DOCKYARD PLC 890190 Singapore, India

SOLAS MARINE LANKA PVT LTD 890392, 89039210, 890710 India, United Arab Emirates

NEIL FERNANDO AND CO PVT LTD 890200, 890110, 890690, 890392, 890190

Netherlands, Seychelles, Maldives

Sri Lanka NAVY 890690 Nigeria

HAIRU NAVAL CRAFT ENGINEERING PVT LTD 890200 Comoros

NORTH WEST MARINE LANKA PVT LTD 890200 Seychelles

YACHTING ASSOCIATION OF Sri Lanka 890391, 89039990 China

JOSTEIN VIKSOND DESIGN AND MOD CENTRE PVT LTD 890391, 89039990 Norway, Maldives

DYNAMIC A V TECHNOLOGIES PVT LTD 890790 Comoros

B A F F POLYMECH PVT LTD 89031010 Bangladesh

NAWALOKA CONSTRUCTION CO LTD 89040090 Maldives

CONSOLIDATED MARINE ENGINEERS LTD 89031090 Maldives

DEVELOPMENT INTERPLAN CEYLON LTD 89039990 Maldives

SCHAUPUB TECHNIK PVT LTD 89031090 Maldives

DHANUSHA MARINE LANKA EXPORTS PVT LTD 89039990 Maldives

S/R EXPORT AND IMPORT 89031010 Maldives

ENGINEERING AND LABORATORY SERVICES PVT LTD 89031090 Maldives

OCEAN TRADE AND LOGISTICS PVT LTD 89039990 Maldives

TROPICAL FISH INTERNATIONAL PVT LTD 89031090 Maldives

ORIENTAL OCEAN EXPRESS PVT LTD 89039990 Maldives

SANKEN OVERSEAS PVT LTD 890790 Maldives

NALANI EXPORT 89039990 Maldives

source : Sri Lanka Export Statistics, Information Technology Division/Sri Lanka Export Development Board

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REFERENCES

Deloitte ( 2016 ). Market insight of the international recreation-al boat building extract. Available from https ://www2.deloitte.com/content/dam/Deloitte/it/Documents/consumer-busi-ness/160907 %20- %20Boating %20Market %20Insights %20- %20Light %20Delivery %20ENG.pdf.

Ucina and Fondazione Edison ( 2017 ). La Nautica in Cifre ( The nautical in figures ). Presentation made at the 57th Boat Show, Genoa, Italy, 21 September.

Page 67: Government of Sri Lanka NATIONAL EXPORT STRATEGY SRI …Ms. Chitranjali Dissanayake Director Export Development Board Ms. Mangala Maduwanthi Development Officer Export Development

Ministry of Development Strategies and International Trade

Developed as part of the EU-Sri Lanka Trade-Related Assistance project, funded by the European Union (EU)

Sri Lanka Export Development Board