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Food_and_Beverages_import and export.pptx
- 2. Industry Background 2 Processed Food and Beverages Industry Transformation of raw ingredients, by physical or chemical means into food. ?A good alternative to fresh food ?Processed products provide an option to consume varieties ?Sri Lanka has a large and unique range of fruits and vegetables of high quality, taste and flavor ?The food and beverage industry has been relatively less affected by COVID-19 due to its essential nature ?Sri Lanka has a strong reputation for high standards in food, which is to be leveraged upon
- 3. Industry Background ?Sri Lanka produces more than 800,000 metric tons of fruits and vegetables annually ?Total Export income on food and beverages in 2019- USD 2,704 million ?Food and beverages export income as a % of total exports in 2019 is 22.6% ?Nowadays non traditional food and beverages have a rising demand in international market. Therefore, export oriented industry has high potential for growth in future 3
- 4. Sri Lanka’s Key Export Destinations 4 Sri Lanka’s Key Export Destinations for Processed Food and Beverages - 2019 Destination-wise Processed Food and Beverage Exports - 2019 (as a % of total exports in this category) 12.5% 10.0% 9.3% 6.6% 5.3% 5.2% 5.0% 4.7% 4.1% United States United Arab Emirates India Maldives Hungary Germany Singapore Netherlands United Kingdom Sources: Sri Lanka Customs Central Bank of Sri Lanka World Bank
- 5. Processed Food and Beverages – Sri Lanka’s Competitors? 5 Sources: Central Bank of Sri Lanka World bank Data Exports of Processed Food and Beverages as a % of Total Exports - 2019 9.4% 4.6% 10.4% 98.2% 7.9% 5.5% 3.6% 15.7% 7.0% United States United Arab Emirates India Maldives Hungary Germany Singapore Netherlands United Kingdom Exports of Processed Food and Beverages as a % of Total Exports - 2019
- 6. Industry Status – Sri Lanka ?110+ food & beverage manufacturing and marketing companies in Sri Lanka Key Industries: ?Nut based products: Cashew & Coconuts ?Fruits and Vegetables: Fresh and Processed ?Rice and Rice based foods (Rice, Flakes, Noodles, Rice Flour) ?Dairy Processing ?Meat Processing (Chicken & Pork) ?Bakery and Biscuit products ?Beverages ?Fresh and Dried Fish ?Breweries 6
- 7. Products with High Potential 7 Foo d ? Coconut Products ? Dehydrated Fruits and Vegetables ? Sea Food Products ? Dairy Products ? Fresh Fruits & Vegetables Beverag e ? King Coconut Drink
- 9. Wide variety of Coconut Products 9
- 10. Key Trading Partners : USA, Germany, Sweden, Norway, India 1 0 ? World’s largest importer of Desiccated Coconuts European Union (30% of Global Imports) ? EU’s Key Import Destinations ? Philippines (54%) ? Indonesia (30%) ? Sri Lanka (8%) ? Largest Consumers within the EU: ? Netherlands ? Germany ? United Kingdom ? France and Ireland are rapidly growing Key Exporters: -Silvermills (Silva & Sons Lanka Ltd) -Nutrikokos (Asian Agro Products ltd.) -Ceylon Coco Green -Ceylon Coconut Company -Renuka Agri Foods -Heritage Lanka Sri Lanka’s Coconut Product Exports
- 11. Barriers to Success: Coconut Products… Limited buyers due to increasing number of competitors Adverse Weather Conditions e.g. drought Unavailability of raw materials at the required time Fluctuating prices Complicated process to obtain Quality System Certificate Complex registration procedures for new ventures Increased competition with peer countries Lack of policy consistency Difficulties in carrying out cost- benefit analyses 1 1
- 12. INDUSTRY POTENTIAL: DEHYDRATED FRUITS AND VEGETABLES 12
- 14. Exporting Partners : CBL Natural Foods, Sawsiri organic foods, Wichithra Natural Foods, Enrich Tea & Food Exports (Pvt) Ltd Top export destinations of "Fruit, dried; mixtures of nuts or dried fruits" from Sri Lanka in 2017: 1 4 ? India (71% ) ? Pakistan (12.4%) ? United Arab Emirates (9.7%) ? Australia (1.5%) ? Germany (1.1%) ? Others: ? USA ? Kuwait ? Singapore ? Canada ? Korea “Sri Lanka does not have sufficient land extent for large scale cultivation of fruits and vegetables and as a result cannot be mass suppliers in the global market. Therefore, the country needs to supply to niche markets at a premium prices where low volumes at high prices are possible.” - Lanka Fruit and Vegetable Producer, Processors, and Exporter Association (2019) Sri Lanka’s Dehydrated Product Exports
- 15. Barriers to Success: Dehydrated Fruits and Vegetables… Lack of latest dehydration technologies & modern machinery Scarcity of qualified local workers High capital cost of machinery and equipment Damages and wastage in transportation Customers’ preference for fresh food instead of processed food 1 5 Low storage facilities
- 16. Industry Potential: Sea Food Products E.g. Global Sea Foods (pvt) Ltd. ? With rapid technological advancements and increased shipping fleet capacity and the culturing of new inland species in Sri Lanka, the stage is set for significant expansion of the sector in the years to come ? Tuna-in fresh, chilled and frozen forms ? Shrimps & Prawns ? Crabs and Lobsters ? Shark fins ? Fish maws ? Beche-de-mer ? Cuttlefish & Squid ? Sprats 1 6 Export to: USA, Italy, , France, Netherlands, Hong Kong, Japan, UK, Germany, Canada, Taiwan Source: Export Development Board
- 17. Barriers to Success: Seafood Products E.g. Global Sea Foods (pvt) Ltd. 1 7 Poor quality raw materials Unavailability of raw material at reasonable prices High Air Freight Costs No regular Flights Lack of space in Flights Minimum Order Quantity Unavailability of raw materials of uniform quality Increase in competition
- 18. Industry Potential: Dairy Products 1 8 E.g. Lanka Milk Foods (C.W.E) PLC ? Milk powder ? Fresh Milk ? Cheese ? Butter & Cream ? Yoghut ? Ice cream In Sri Lanka, most of the dairy farmers are engaged in dairy industry as an extra source of income and is relatively of a small-scale - Domestic dairy requirements are largely met through imports from other countries such as Australia and New Zealand since domestic milk production is not sufficient. - Dairy farmers are unable to earn considerable profit in dairy industry - The cost of imported milk powder is lower than fresh milk because of the relatively low tariffs on milk powder imports
- 19. Barriers to Success: Dairy Products E.g. Lanka Milk Foods (C.W.E) PLC 1 9 Incompatibility of local raw material supply with industry’s needs Lack of medium and large- scale dairy farms Low profit margins for dairy famers Cost of milk production is very high and the final price of milk is very low Taxation (VAT, PAL when importing Machinery) Labor shortage (Nuwara Eliya)
- 20. Industry Potential: Fresh Fruits & Vegetables E.g. Crops Bee Lanka - Seeduwa 2 0 ? Carrot ? Leek ? Cabbage ? Cauliflower ? Salad Leaves ? Low country and dry or wet areas are suitable for a variety of exotic tropical fruits and vegetables such as: ? Gherkins ? Green Chilli ? Red Onion ? Pumpkin ? Bitter-gourd ? Melon ? Tropical produce such as pineapple, mangosteen, ripe jack, avocado, rambutan, star fruit, passion fruit and anoda are acclaimed for their unique flavour, aroma, and colour. Over 80 different fruit and vegetable varieties with unique taste and nutritional qualities are grown in Sri Lanka for local and global markets. ? Climatically cool conditions in the country's central hill country are ideal for temperate crops such as
- 21. Barriers to Success: Fresh Fruits & Vegetables E.g. Crops Bee Lanka - Seeduwa 2 1 Little time to comply with regulations - Faster spoilage! Need to register for every shipment Non refundable deposit to CDA Limited Authorized Farms for raw materials - E.g. Mango, Mugunuwenna, Snake Gourd Logistics cost - E.g. Warehouse High cost for the transportation Lack of vehicles with cold storage facilities High Cess rate per King Coconut (Rs. 10 per nut)
- 22. Industry Potential: Beverages E. g. THAMBILI KING - Negombo Products: o Tea o King Coconut o Coffee o Herbal Drinks o Energy Drinks o Fruit Juice 2 2 Tea production of major producing countries
- 23. Barriers to Success: Beverages E. g. THAMBILI KING - Negombo 2 3 Labour turnover (Migration of skilled workers because of low salary) Lack of credit for factory automation Difficulties in access to finance Shortages of raw materials Taxation Packaging cost Difficulty in accessing and securing export market shares Lack of expert knowledge
- 24. Way forward 2 4 ? Should follow a stringent process of quality standards ? Continue expanding infrastructure of the country ? Establishing warehouse and storage facilities near Colombo ? Road transport trucks and freezer trucks Reduce post harvest losses ? Amend the relevant regulation framework ? Easy and quick ‘one-time’ registration procedure for all shipments Minimum time to comply with regulations
- 25. 2 5 Forward agreements Create backward linkages Packaging Strategies Proper Branding Granting Tax concessions Agricultural Forward Contracts agreement between the seller and buyer to deliver a specified quantity of a commodity to the buyer in the future for a specified price or in accordance with a specified pricing formula ? Supplier networks ? Establishment of a highly efficient Local Content Unit (LCU) ? Establishing a supplier database ? Export logistics sectors including cargo handling, transportation firms, warehousing, and storage Proper Branding and promotional campaign ? Selling a product is an ‘art’ E.g. Granting Tax concessions for the importation of machinery & equipment ? Packaging Color Sways Consumer Purchase Habits ? Product Packaging Is a Marketing Tool ? Packaging Creates Brand Recognition, e.g. Thailand
- 26. 2 6 Profitable Value Added Products Knowledg e and Expertise Increase domestic milk production Pest Control addition should E.g. The idea of value be incorporated in the current food processing industries and new innovations should be made so as to produce a better quality and a more economical product E.g. Minimize the migration, by improving job market for expertise in Sri Lanka ? Storage Facilities & Milk cooling systems ? Introduce evening time milk harvest ? Enhance Animal health management ? Land availability ? Farmer knowledge and skills ? Focus import policy and fiscal policy on dairy products to provide a conducive environment for the domestic dairy industry, with market forces governing the pricing of domestic milk ? Empower dairy farmers and facilitate their participation ? Value addition at the village level Specialist services for farming and agricultural businesses that are designed to ensure your crops, livestock, stored products, equipment, machinery, land are all protected against the pests.
- 27. Thank You 27