MOVING UP THE VALUE CHAIN
Mangala Gunasekera presents a bold vision for Sri Lanka’s rubber industry
Q: How would you describe the current state of Sri Lanka’s rubber industry in terms of export competitiveness and market readiness?
A: With its roots in the colonial era, Sri Lanka’s rubber industry is at a critical juncture. Despite being reputed for its premium grade rubber, challenges such as outdated practices, limited value addition and reliance on low priced exports have constrained global competitiveness.
However, this narrative can be reversed.
SMEs have the potential to transform the industry by focussing on original equipment manufacturing (OEM) and high value innovative rubber based products.
By investing in R&D and adhering to global standards, these enterprises can target premium international markets and emerge as leaders in niche segments.
Q: What are the most promising global trends driving demand for rubber based products – and how well is Sri Lanka positioned to capitalise on them?
A: The demand for rubber products is being driven by sectors such as healthcare, fitness and mobility. Specific growth areas include solid tyres, automotive components, latex gloves, medical accessories and resistance bands – they cater to specialised international markets and are less vulnerable to price competition.
The challenge lies in shifting from exporting raw rubber – which is often oversupplied and underpriced – to manufacturing high performance niche products.
For instance, basic latex can be processed into resistance bands for therapeutic use and sold under a branded platform, opening new revenue channels.
Q: How can Sri Lanka differentiate its rubber products globally – especially in terms of branding and quality perceptions?
A: Branding is key – and this is where ‘Ceylon Rubber’ can play a central role. It represents traceability, sustainability and quality, all traits that resonate with international buyers.
Many Sri Lankan manufacturers already meet international standards, and hold ISO and ethical trading certifications. Building on this foundation with a strong and unified brand identity will enhance global perceptions, and set Sri Lanka apart from low cost competitors.
Q: What role do SMEs play in driving the rubber industry forward? And what are the main challenges they face when trying to scale globally?
A: SMEs are the backbone of the rubber industry; they play a vital role in innovation and job creation. Some have already made headway in world markets through determination and smart positioning.
However, they face major obstacles – including limited access to export finance, outdated machinery and a lack of digital infrastructure. With the right support and mentoring – particularly from trade chambers and industry leaders – these businesses can be empowered to expand their global footprint and raise industry standards.
Q: Is there sufficient access to capital, technology and knowledge to support innovation among local producers?
A: Unfortunately, access to finance remains limited. Many producers still operate with manual processes and lack the funds to invest in automation or R&D. This hampers competitiveness and scalability.
A potential solution is to establish an innovation hub for the rubber industry, supported by the government and private stakeholders. Such a platform could promote knowledge sharing, and enable small businesses to upgrade their processes and develop export ready products.
Q: How can value addition be accelerated across the industry to reduce dependence on traditional exports?
A: A comprehensive rubber export transformation strategy is needed to promote value addition. This strategy should involve all stakeholders from raw material suppliers to end product manufacturers.
Some SMEs have already adopted vertically integrated models, handling everything from procurement to finished product manufacturing. Scaling this approach across the industry will maximise value and reduce reliance on commodity exports.
Q: What international markets or trade partnerships should Sri Lankan exporters be targeting more aggressively?
A: While the US and European markets remain key, exporters should also explore high growth regions such as East Africa, the Middle East and ASEAN nations.
These regions are seeing strong investments in healthcare and fitness infrastructure – both of which rely on quality rubber based products. Targeted marketing and partnership building efforts in these non-traditional markets could yield substantial returns.
Q: What kind of government or private sector support is essential to unlocking the full export potential of the export sector?
A: Policy clarity and streamlined export processes are critical. Delays in securing export financing and lack of digital documentation tools continue to hinder progress.
Chambers of commerce and trade associations are playing their part. However, the success of individual businesses must be scaled to the national level through public-private collaboration and consistent regulatory support.
Q: To what extent is sustainability a factor in global buyer decisions? And how can Sri Lanka integrate responsible practices without compromising competitiveness?
A: Sustainability is no longer optional; it’s a baseline requirement for global buyers. Customers expect transparency in carbon footprints, ethical labour practices and responsible resource use.
To meet these demands, a formal rubber sustainability protocol should be developed through public-private partnerships (PPPs) to standardise ethical and environmental benchmarks, improve traceability and boost the country’s appeal in premium markets.