Uncertain future for the local printing industry
While the dollar crunch is hurting every industry in Sri Lanka, the printing sector is also facing a massive issue due to the import restrictions that are put in place with the shortage of dollars.
Though printing as a sector is considered non-essential, the industry is vastly required for every product that is being exported from Sri Lanka. There are shortages of paper, inks, chemicals, flex boards, chip boards, printing plates and so on which are essential to produce a finished product for export. There are many local and foreign orders for printing but no raw material.
On Friday morning the Business Times spoke to the Sri Lanka Association of Printers (SLAP), President Peter Deckker on the uncertainties the industry is facing.
“As we speak now it’s very uncertain as to when the industry will collapse as every printing press in the country is facing a shortage of paper to inks and chemicals and so on. Banks are not allowing us to open letters of credit for 30 days. They require at least 90 to 120 days credit to release the dollars which the foreign banks are not agreeing upon,” he said. Overseas suppliers are looking at blacklisting Sri Lanka which cannot meet the credit demand on time, he added. Sri Lanka mainly imports raw material for printing from India and China and some from Europe and Indonesia. As an association, SLAP has written a letter to the Indian High Commission in Sri Lanka to extend the credit period, but nothing seems to have worked yet. The association has also lobbied the Central Bank, Presidential Secretariat and Finance Ministry every week, but none of the government institutions has responded, Mr. Deckker stressed.
Everyone is going through a tough time with no timeline. Production cannot continue and the industry has already lost more than 40 per cent of capacity. If this continues people will have to shut down printing presses and a lot of people will lose their jobs, noted Mr. Deckker.
He also mentioned that prices of existing supplies in the market have increased due to high demurrage and also seen a five to six-fold increase in freight charges.
An importer in the printing sector, who wished to be anonymous, said the Central Bank has no proper management of foreign currencies. “The dollar is not the problem in the country; it’s how you manage it. The Central Bank should do a feasibility study of managing the dollars, have a swap analysis but they are not filling the gaps properly. Holding the dollar rate at a low level is also not helping the country get any further. They don’t have a plan for the future.”
Sri Lanka needs to protect and honour the goodwill of global companies who have kept faith in exporting to this country. “We are getting into a series of problems by losing the trust with these foreign companies if we don’t meet the credit limit deadlines,” he noted.
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