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Packaging Industry Hit By Electricity Costs

Sri Lanka’s high electricity costs make it difficult for the multi billion rupee packaging industry to compete with Indian products if the industry is opened up, an industry spokesman told reporters in Colombo on Thursday (January 23).
The industry is protected by a 100% duty on the importation of finished packaging products.
Michael Perera, General Manager CMC Engineering GmbH, a machinery supplier to the industry said that the local industry will be swamped with South Indian packaging material catering to its 200 million population in the event duty protection is removed.
The machinery used by the Indian packaging industry is also good, he said.
The debilitating factor here is high electricity costs which comprise 20% of the cost of production, higher than labour which is marginal due to automation, he said.
Perera said that they had had talks with the Industries Ministry to get a tariff reduction but to no avail.
He further said that the industry conforms to the required standards in exporting to the USA and the EU markets. Ninety per cent of tea exports are done with local packaging material. The majority of garment exports are also done with local packaging.  Imported packaging material for garments is too expensive, J.D. C. Perera, Deputy President Sri Lanka Institute of Packaging told this reporter.
Meanwhile “LankaPak,” the industry’s biennial trade exhibition will be held in Colombo in July.
Some 160 stalls have been taken up, as opposed to a mere 12 stalls at the inaugural exhibition in 1982.
The previous exhibition had had participants from India and China as well.
Packaging material includes a host of products such as cartons, toothpaste tubes and laminated packaging material.

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