By Uwin Lugoda
Tokyo Cement Company (Lanka) PLC has recommended that the Sri Lankan Government “remain steadfast” in restricting cement imports that increase the country’s foreign exchange exposure without adding value to the national economy.
In a statement released to the Colombo Stock Exchange (CSE) on 4 May, Tokyo Cement Managing Director S.R. Gnanam stated that due to saturation by importers, last year saw local manufacturers supplying only 62% to the national consumption, despite having the capacity to supply 90%.
“The local production capacity of our cement industry is 5.7 million metric tonnes (MT), which amounts to 90% of last year’s national consumption of 6.3 million MT. In the short run, we are well placed and have targeted these markets catered to by importers.”
The Government imposed import restrictions on all non-essential goods in April for three months to prevent a looming foreign exchange crisis, and this applied to cement too. However, amidst pressure from various industries, a list of goods were exempted from these restrictions if the importers obtained the approval of the Import and Export Control Department. Cement was included among these exemptions.
He explained that for every $ 1 spent on the import of raw materials for local production of cement, $ 2 is spent on cement imports, which unnecessarily exasperates Sri Lanka’s national forex deficit.
In his statement, Gnanam stated that the market will contract further due to the Covid-19-related economic impact, and suggested that this is an opportunity for local manufacturers and job creators to service a larger slice of the local market, while helping reduce the country’s outflow of forex that would otherwise go towards imports.
Tokyo Cement has been in operation for three decades and is the largest manufacturer and supplier of cement in Sri Lanka, with an installed capacity of nearly two million tonnes of cement. The company also employs over 600 people and has Rs. 14 billion in assets.
Earlier this year, Asia Securities, a Colombo-based brokerage, stated in a research report that Sri Lanka’s cement production and bagging capacity will outstrip demand in the near term with new plants coming in, until economic activity recovers.
Tokyo Cement Company (Lanka) PLC has recommended that the Sri Lankan Government “remain steadfast” in restricting cement imports that increase the country’s foreign exchange exposure without adding value to the national economy.
In a statement released to the Colombo Stock Exchange (CSE) on 4 May, Tokyo Cement Managing Director S.R. Gnanam stated that due to saturation by importers, last year saw local manufacturers supplying only 62% to the national consumption, despite having the capacity to supply 90%.
“The local production capacity of our cement industry is 5.7 million metric tonnes (MT), which amounts to 90% of last year’s national consumption of 6.3 million MT. In the short run, we are well placed and have targeted these markets catered to by importers.”
The Government imposed import restrictions on all non-essential goods in April for three months to prevent a looming foreign exchange crisis, and this applied to cement too. However, amidst pressure from various industries, a list of goods were exempted from these restrictions if the importers obtained the approval of the Import and Export Control Department. Cement was included among these exemptions.
He explained that for every $ 1 spent on the import of raw materials for local production of cement, $ 2 is spent on cement imports, which unnecessarily exasperates Sri Lanka’s national forex deficit.
In his statement, Gnanam stated that the market will contract further due to the Covid-19-related economic impact, and suggested that this is an opportunity for local manufacturers and job creators to service a larger slice of the local market, while helping reduce the country’s outflow of forex that would otherwise go towards imports.
Tokyo Cement has been in operation for three decades and is the largest manufacturer and supplier of cement in Sri Lanka, with an installed capacity of nearly two million tonnes of cement. The company also employs over 600 people and has Rs. 14 billion in assets.
Earlier this year, Asia Securities, a Colombo-based brokerage, stated in a research report that Sri Lanka’s cement production and bagging capacity will outstrip demand in the near term with new plants coming in, until economic activity recovers.