Government ban hurts dealers of imported furniture
Sri Lanka’s ban on furniture imports while directing state institutions to procure all office chairs and furniture from domestic suppliers manufacturing will hit around 30 local firms, affecting the employment of 2000 people, industry sources divulged.
Furniture imports other than exclusive furniture for flagship projects have been banned and the procurement of government office furniture will only be from companies that have at least 50 per cent domestic value addition.
Although provisions are included for domestic preference in the Government Procurement Guidelines, the possibility to achieve benefits for the domestic suppliers and companies from those provisions is limited, a senior Finance Ministry official said.
The Finance Ministry will be working to issue the amended procurement guidelines in consultation with the National Procurement Commission, he added.
Import of raw materials for local manufacturing activities is to be permitted, provided domestic value addition is at least 30 per cent and foreign exchange savings from import replacement activity should be higher than the value of import of finished products.
This clause is included in the interim trade and custom based tax policy framework which is part of the COVID-19 Economic Revival Plan of the Government. Large firms use advanced technology for integrated furniture production process, he pointed out.
Local furniture companies and entities with 51 per cent Sri Lankan ownership will get preferential treatment when bidding for Government tenders under the new regulatory changes.
Around 1170 micro small and medium scale carpenters in the Moratuwa cluster are supplying semi finished furniture to the local market but they are incapable of producing quality office furniture in accordance with technical specifications at present.
This wood-based manufacturing sector cannot be upgraded to a domestic import substitution industry without providing these carpenters with necessary modern technical knowhow and financial assistance, an industry official said.
He said that this sector can be upgraded by a comprehensive development programme and improvement in product quality, adding that the up scaling and redefining the small scale is also essential.
| Many affected | |
| Importers of office chairs and furniture are concerned about the government’s decision to suspend imports of office chairs and furniture into the country. In a statement, the Office Chairs and Furniture Importers Association, while congratulating the government on containing COVID-19, has strongly urged the authorities to lift the import restrictions on office chairs and furniture which is an essential item to any progressive and developing nation. “The group of companies under the association directly employs more than 2000 people and provide employment for a much larger The continued extension of the suspension of importation of office chairs and furniture will affect the sustainability of the businesses resulting in possible large scale unemployment for the many thousands employed in the industry. The import restrictions also adversely affects a broad spectrum of secondary industries including port staff, freight companies, clearing agents, architectural companies and construction companies, whereby these industries may also experience job losses due to the lack of business from the importers. The same applies to the banking sector which would see a considerable loss in income due to the drop in banking transactions. The loss of income in these secondary industries results in further loss of revenue to the government, it said. All sectors of the country, whether they are individuals or corporate citizens, should be given to access the latest modern ergonomic office seating and furniture that have international certifications and which meet international occupational health and standards as available overseas, thus increasing productivity across all industries. The association says that this type of office seating cannot be manufactured locally at such short notice due to limited technology, unavailability of required inputs and components locally. Further it does not warrant investing in manufacturing facilities to cater to a domestic market that is as small as our local market. The imposition of these restrictions will also result in a monopoly in the country which is unacceptable in any developing country while at the same time resulting in unnecessarily higher prices and low quality products to consumers, the statement said. |