Business Times

FCCISL urges government to negotiate with cement suppliers Pakistan and India

The Federation of Chambers of Commerce and Industry of Sri Lanka (FCCSIL) says that it is essential for Sri Lanka to negotiate Mutual Recognition Agreements (MRAs) at least with its main cement supplier such as Pakistan and India to avoid delays in conducting conformity assessment procedures.
Furthermore, the negotiating MRAs would be in line with the current free trade agreements Sri Lanka entered into with India and Pakistan, according to an FCCISL report.

In the wake of obstructions at the top level against the ongoing investigations by Sri Lanka customs into the issue in the market of the substandard cement that was kept under seal in Building Materials Corporation warehouses, and the temporary cement shortage in the local market, the (FCCISL), highlighted several issues which have to be addressed to meet the future challenges of the industry.

The FCCISL’s Research and Policy Advocacy Unit has compiled a case study where it reveals that the demand for cement has been increasing at a high rate recently due to new infrastructure projects initiated by the Government and the Private Sector, reconstruction and rehabilitation projects launched in the conflict-affected areas in the Northern and Eastern Provinces as well as a growing trend witnessed in the Housing Development Programmes.

The FCCISL says that the free flow of quality cement to the market will ensure the smooth functioning of the construction industry. In order to meet the development aspiration of the nation, the all parties involved should carry-out their responsibilities and practice the business according to the best ethical norms.

The existing process of registration of cement suppliers under the import inspection scheme is exhaustive, complex and time consuming. The current procedure is negatively affecting the free flow of cement to the country at competitive prices, the FCCISL report revealed.

At present, a bag of cement is marked as per the SLS requirement with all the information pertaining to overseas manufacturer of the cement. This marking requirement is unnecessary as the responsibility for the quality of the cement lies with the local importer/ processor. It is sufficient to mark only the country of origin along with the details of the local company, FCCISL said.

According to the FCCISL case study the SLSI specification insists on net weight of 50 kg in every individual bag. To meet this requirement the local cement processors have to keep a quite high target weight resulting in the loss of large quantities of cement during the packaging. To avoid this loss, it may be useful to adopt methods given in Indian standards where overall weight of number of bags is taken in calculating the net weight for bags on cumulative basis,

At present, the SLSI does not issue laboratory test reports to the importers/ cement processors. Test reports should be issued to the importers as cost of the test are being borne by the importers and also for the purpose of maintaining transparency.

The current SLS 107 standard had been formulated by the Special Committee on Building Material. Considering the importance of the cement and associated complex scientific evaluations, it is proposed to establish a separate standard committee for cement with enhanced representations from all the stakeholders including the industry representatives.

The cement industry and trade estimate the cement market totals 4.2 million MT per annum. Some industry experts believe that the quantity of the Sri Lankan cement market is now at a peak level of 6.2 million MT per annum. It is also estimated that the market is growing at the rate of 10% per annum.

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