July 23, 2019
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    We will build a strong rural economy to make Lanka an upper middle income country

    November 11, 2014

    Traditional Industries and Small Enterprises Minister Douglas Devananda said in Parliament today (Nov 10) that the government’s economic plans were focused on building a strong rural economy with special focus on micro, small medium industry development, handicraft development and traditional industry development.

    Participating in the committee stage debate on budget 2015 under the expenditure heads of the Ministry of Traditional Industries and Small Enterprises he said: “We will contribute to achieve the Government’s vision of making Sri Lanka an upper middle income country and a Wonder of Asia as envisaged in the ‘Mahinda Chintana Vision for the Future.”

    The Minister said: “The Government’s Mahinda Chintana Vision has been successful and effective in transforming the Sri Lankan economy from a low income economy to a middle income economy. The per capita income prior to 2005 was USD 1200 and we are almost reaching USD 4000 by 2015. Moving further forward, the Government plans to surpass USD 7500 per capita income and reach high middle income status by 2020.

    “While increasing the per capita income to reach an upper middle income country status, the Government has focused on rural economy through an “Inclusive Development Strategy” where backward regions, low income and vulnerable groups were integrated into the mainstream of the economic development.

    “The Government’s focus in the past years was heavily on infrastructure development. However, in the next phase, the Government’s focus has shifted towards strengthening a “Knowledge Economy” with focus on education, skill development, health development and human resources development. This shift will ensure the country smoothly surpass towards an upper middle income status and avoid the ‘middle income trap’.  The Government pragmatic development model need to be commended.  

    Micro Small Medium Industries, Handicrafts and Traditional Industries

    “My Ministry has aligned its development programmes and projects in line with the Government’s “Mahinda Chintana Vision for the Future” which is the National Development Framework of the Government. Based on the Budget Speech of the His Excellency the President Mahinda Rajapaksa, my ministry has developed a five (5) year Strategic Plan which sets-out the road map including programmes and projects. This Ministry plays an active role in contributing to the rural economic development, which is a key element in the Mahinda Chintana Vision to achieve “Inclusive Economic Growth and Development”.

    “The work plan of my ministry is being implemented by the Statutory Boards and Institutions that come under the purview of my ministry, which includes the Industrial Development Board, the National Crafts Council, the National Design Centre, the Palmyrah Development Board and the Northsea Ltd.   On the micro, small, medium industry development, the Industrial Development Board is actively involved in undertaking technology transfer, training for local industries, self-employment related training, raw material (scrap metal) distribution at concessionary prices, industrial estate support for SMIs, market facilitation, facilitate capital, credit, marketing, management and technical facilities, legal advice for SMEs and promote and support industrial development in the country.  

    “The National Crafts Council holds Shilpa National Crafts Exhibition and Trade Fair with National Design Centre, awards prizes and medals for handicraft sector heroes to recognize and motivate them, providing training to craftsmen, undertake master craftsmen training programmes and training craftsmen and incubation through craft training centres, cultivation of raw materials, improve the quality of handicrafts, preserving the crafts sector to protect the country’s art, heritage and culture and as a livelihood development strategy, to access high-value market  for rural community. The craft museum development is also an important activity of the National Craft Council.  

    “The National Design Center helps craftsmen in product development, market oriented new design, extend support to develop gifts and souvenir items and conduct new design development programme and find substitute raw materials in craft sector.  

    “The Palmyrah Development Board is responsible for developing the Palmyrah sector through planting, supporting pulp production, sap production, fiber production, tuber production, treacle and jaggery production, Palmyrah handicraft development and extension services and livelihood development of the Palmyrah sector community.   

    “The Northsea Limited undertakes high-quality fast moving fishnets and twin production. The three factories in Gurunagar, Lunuwila and Weerawila are working closely with Cey-Nor Foundation and the Ministry of Fisheries and Aquatic Resources Development to meet the fisheries sector requirements.  Some foreign buyers have expressed interest to purchase fishnets and therefore there is a potential to export fishnets to foreign market and this will be explored in 2015.

    The ministry has conceptualized, formulated and implemented the following programmes and projects to uplift the micro, small medium industries, handicraft sector and the traditional industries to support and strengthen the rural economic development.

    Development of Enterprise Villages and Strengthening Women Entrepreneurship

    “The Budget Proposal 2014 has given emphasis to strengthen Women Entrepreneurship Development and support Enterprise Villages to develop micro, small enterprises to ensure the development of entrepreneurship community.

    “High potential promising cluster based villages were selected and technology transfer, training, skill development, market oriented new designs, product development, access to credit, common service facilities including machineries, tools and infrastructure were developed to strengthen the villages and establish links with large producers, exporters and markets through buyback and subcontracting arrangements.

    “Sectors such as Leather, Lace, Bamboo, Coir, Brick, Batik, Cashew, Lacquer, Jewellery, Banana Fibre, Thalakola and Palmyrah were supported under this programme. Districts such as Kurunegala (Thalakola Village), Nuwara-Eliya (Lace, Jewellery and Ornaments Village),  Matale (Laquer Village), Hambantota (Coir Village, Brick Villages), Puttlam (Cashew Village), Anuradhapura (Leather Village), Jaffna (Batik and Embroidery Village, Banana Fibre Village), Kilinochchi (Palmyrah and Fibre Products Village), Mullaithivu (Palmyrah Food and Handicraft Village) were covered under this programme.

    “This programme has benefited over 700 Women Entrepreneurs directly and assisted to strengthen women entrepreneurship in the country in line with the Mahinda Chintana Vision.

    Development of Pottery Villages

    “Based on the Budget Speech 2013 of His Excellency the President Mahinda Rajapaksa, the Ministry of Traditional Industries and Small Enterprise Development formulated a project for the development of Pottery Villages to support pottery industry to gain access to modern technology, equipment and design to manufacture specialized gift items preferred by tourists.

    “This Pottery Village Programme provided support to 13 villages in 10 Districts covering Anuradhapura, Puttlam, Kurunegala, Gampaha, Colombo, Nuwara-Eliya, Matara, Batticaloa, Matale, Hambantota and Jaffna. This project will benefit over thousand (1000) pottery industrialists Island-wide. The project intervention includes provision of mobile pug mill, electric potter wheels, kick wheels and kilns, product development programme, new designs, development of gift and souvenir items and market facilitation with a view to increase the production volume, diversify the products and develop new products to cater to the tourism market.

    Development of Handicraft Villages

    “Based on the Budget Speech 2013, the ministry has developed 12 handicraft villages in 8 Districts and assets created in these villages have been peopolized. Musical Instruments and Jewellery Village in Kandy, Sesath and Laquer Village in Matale, Mask Village in Kalutara, Woodcarving Village in Galle, Musical Instruments Village, Bobbin Lace Village, and Coir Village in Matara, Clay Village in Anuradhapura, Palmyrah Handicraft Villages in Jaffna and Batticaloa have been developed, supported and strengthened.  Project intervention includes supporting craft cottages and infrastructure, technology transfer and training, product development and new designs, provision of machineries, tools, raw materials and common services facilities including market facilitation. Over 800 craftsmen are benefited directly under this programme.

    “In 2014, additional 16 handicraft villages are being supported and strengthened in 13 Districts covering Jute Village in Kandy, Thalakola Village in Puttlam, Musical Instruments Village in Gampaha, Rush and Reed Village in Kalutara, Lacquer Village in Hambantota, Bamboo and Bobbin Lace Village in Matara, Cane Village in Pollonnaruwa, Palmyrah Handicraft Village in Pathinipuram in Trincomalee, Navithanveli in Ampara, Mailampaveli in Batticaloa, Kirangi in Kilinochchi, and Karaveddi in Jaffna.  Thalakola Village in Kurunegala, and Coir Village in Jaffna are being supported. The direct beneficiaries are over 850 craftsmen.

    “Further, with the Indian Grant Assistance Programme, Handicraft Production and Marketing Village is being established in Kawantissapura, Hambantota and the work is almost nearing completion. Similarly the Indian Grant Assistance Programme has also supported the establishment of a Handicraft Production and Marketing Village in Kaithady, Jaffna and is expected to commence work in 2015.

    National Kithul Development Programme

    “Under the Mahinda Chintana Vision for the Future, my ministry works on the implementation of national kithul development programme to support and strengthen the kithul sector which contributes significantly to the rural economy.

    “In 2014, the ministry has undertaken many programme interventions including tappers training programme completing 33 programmes in 14 Districts imparting tapping skills to over 1200 young people. Safety kits including safety jackets, helmet, belt, knife have been provided to over 1500 tappers in the 18 kithul production Districts. Kasper technology has been introduced to increase the sap yield and 33 programmes have been conducted in 14 Districts. Quality improvement programme for kithul treacle and jaggery has been completed through 11 programmes in 8 Districts covering 455 industrialists.  Kithul plantation programmes and insurance scheme for master trainers and trainee tappers and awareness programme for officers were conducted.

    “In 2014, Government declared the 1st week of April as Kithul Promotion and Consumption Week and various awareness programmes and promotion programmes were conducted to popularize kithul as a healthy sweetener among local people and foreign visitors. Kithul exhibitions known as Kithulaka Varuna Exhibition and Trade Fairs were conducted in Colombo, Ratnapura, Kandy and Matara. These exhibitions and trade fairs helped to popularize kithul products and establish linkages with exporters and large scale traders.  It is reported that the kithul treacle and jaggery exports increased from Rs. 26 mn in 2011 to Rs. 58 mn in 2012 and to Rs. 69 mn in 2013.  The rate of increase of exports was an exponential growth which shows the promising potentials for the kithul sector in the international market.  

    “The Ministry has set up a special unit for Kithul sector development with dedicated staff to strengthen this sector.

    Development of SMI Industrial Estates

    (i) Atchuvely Industrial Estate

    “This Industrial   Estate was completely abandoned in 1990s due to the conflict situation and was not operational for the last 25 years. The Ministry was supported by the Indian Grant Assistance to the value of Rs. 220 mn and Government of Sri Lanka (GoSL) funds of Rs. 50 mn to establish the Atchuvely Industrial Estate with all infrastructure facilities including internal roads, 3 phase power supply, drinking water supply, storm water drainage facility, water tank facility, water treatment facility, fire protection system, water disposal facility, administrative complex including post office and canteen. 22 plots have been developed and currently high potential viable sectors with 8 promising industrialists in Light Engineering, Food and Beverages, Waste Paper Recycling, Fibre Glass, PVC Pipes, Fishnets, Vegetables and Fruit Dehydration have entered into an agreement on a 30 year lease and started putting up their buildings and factories. The other expression of interests and applications are being screened by the Industrial Development Board to select smart entrepreneurs based on ‘Picking the Winners’ policy in viable sectors. The IDB will provide technology transfer and training to industrialists and facilitate access to credit and market to these industries. The Atchchuvely Industrial Estate is an important industrial hub for the Northern Province as it will create many forward and backward linkages.

    (ii) Upgrading and Modernizing Main and Mini Industrial Estates

    “There are 18 main and mini industrial estates managed by the Industrial Development Board and over 400 small medium industries in various sectors such as agro based products, chemicals, plastics, wood based products, light engineering, food and beverages, rubber based products, furniture based products, cement based products, surgical products, coir based products, water bottling, brass ware, paper products and fiber glass products are operating in these small medium industrial estates.

    “Under the Mahinda Chintana National Development Framework, the small medium industries and enterprises have been recognized as the backbone of the economy. These industrial estates have not been modernized in the past. The Government has provided Treasury funds to the value of Rs.305 mn under a 3 year Medium Term Budgetary Framework to modernize and upgrade the infrastructure facilities such as roads, tube wells, boundary walls, water facilities, drainage systems, security huts, sanitation facilities etc.

    “Industrial Estates such as Pallekele in Kandy, Ekala in Gampaha, Panaluwa in Colombo, Lunuwila in Puttlam, Galigamuwa in Kegalle, Pussella in Ratnapura, Wawulugala in Kalutara, Poonthoddam in Vavuniya are being covered under this programme.

    “The modernization of the industrial estates will provide a great boost to the small medium industries which is given very strong emphasis by the Government under the ‘Mahinda Chintana Vision for the Future’.

    Rehabilitation and Reactivation of the Elephantpass Saltern with Community Involvement

    “The Elephantpass Saltern commenced in 1938 and due to the conflict situation, the saltern operations were abandoned in 1990s and it has been closed down for the last 23 years without any single operation. The Ministry of Traditional Industries and Small Enterprise Development under the Vadakin Vasantham (Uthuru Wasanthaya) Programme with the financial assistance from the Ministry of Economic Development has commenced rehabilitation and reactivation of the 330 acre of the saltern as a phase I initiative. I wish to very specially express my gratitude to Hon. Basil Rohana Rajapakse, Minister of Economic Development for his excellent cooperation, support and funding assistance for saltern and other development activities.

    “The total acre under saltern is 1946 acres, out of which 330 acre is under phase I programme. Reservoir has been rehabilitated, 15 number evaporation pans have been renovated and 267 numbers of crystallization pans are being rehabilitated, 30 numbers of salt platforms have been established, access roads, renovation of buildings, reconstruction of spill ways and canal system, flood protection bunds, rip rap protection for reservoir and earth bunds are being established and are expected to be completed by end of this year. In all the rehabilitation work, the ministry involved the 10 Rural Development Societies (RDS) and Women Rural Development Societies (WRDS) based in Kilinochchi Districts. Therefore over 300 members in the Kilinochchi RDS/WRDS are involved in the rehabilitation and benefited during the implementation of this project.

    “The project has built a strong ownership and community involvement in the implementation which is an innovative and creative implementation modality. It is envisaged that the rehabilitation of phase I saltern will lead to a production of 20,000 to 25,000 metric ton salt per annum. The saltern will provide employment opportunities for over 3000 people once it is fully operational.

    “At the second Phase 477 acres of saltern will be developed in 2015 and it is envisaged that the salt production will increase by a further additional production of 25,000 – 35,000 of metric tons. When the saltern is fully operational the production can be increased to over 100,000 metric tons.

    Palmyrah Livelihood Development Project for the Northern Province

    “The ministry formulated a project proposal for Palmyrah sector livelihood development programme covering mainly the women headed families, widows, disabled and other vulnerable groups.  The programme covered many components and activities. The planting programme included seed planting of 291,000 seeds in Jaffna, Mannar, Mullaithivu, Kilinochchi and Vavuniya.

    “With regard to sap based products 250 bicycles and tapping tools including belts and knives are being provided to 250 tappers in Jaffna, Mannar, Mullaithivu, Kilinochchi and Vavuniya Districts. Additionally 150 tappers are being provided with tapping tools to strengthen their tapping activities.

    “Existing Jaggery Production centre is being renovated in Udduppity (Kambarmalai) in Jaffna in order to increase the sweet toddy based products. Two new modern Jaggery production technology and equipment centre is established in Kodikamam, Jaffna and Mannar East, Mannar.

    “Establishment of modern toddy bottling plant including facilities are being established in 3 location in Mannar West in Mannar, Puliyankulam in Vavuniya and Kopay in Jaffna.

    “The Karainagar Palmyrah Industrial Complex in Jaffna is being upgraded, strengthened and equipped with modern food processing technology and facilities. Further pulp processing, jaggery production, tuber production and fibre extraction are also being established, in the Karainagar Industry Complex.  

    “Eight pulp production villages with pulp extraction machines and other pulp processing facilities are established. Four Villages in Jaffna covering Allaipity-Velanai, Varani- Chavakachcheri, and 2 villages in Delft;  in Mannar 2 villages in Tharavankodai, Thalaimannar and Padappaddi and further 2 villages in Mullathivu covering Mathalan and Valagnarmadam East.

    “Tuber production villages will be supported where over 200 families will be supported to develop seed bed for tuber production at household level including tool kits such as pulp vessels, slicing machineries, knives, drying facility (Padangu), tent etc.  62 households in Jaffna, 49 in Mannar, 34 in Mullaithivu, 41 in Kiliochchi, 14 in Vavuniya are being covered under this project.
    “Palmyrah sales outlet with showroom is being established in Madu, Mannar closer to the Madu Church.

    “Palmyrah based handicraft training programme covering 150 women beneficiaries is being conducted in Karaveddy, Jaffna.

    “In Selvapuram, Mullaithivu, a new food processing and handicraft training centre has been established and all works are nearing completion.

    “In Palai DS Division of the Kilinochchi District the Vannankerni Fibre Production and Processing Village is being established with a processing centre including equipment and machinery and is almost nearing completion.

    “With the UNDP support Palmyrah jaggery centre is being developed in Pandaitharippu and Kayts in Jaffna. Moreover, fibre production centres are being established in Valanai and Chavakachcheri in Jaffna. Under the PDB budget, 15,000 seedlings and 30000 seed are being planted in the Eastern province.

    “In Mankulam, a handicraft experience and sales centre is being established to promote handicraft sector.

    “A revolving fund of Rs.3 Million has been established under the project to purchase Palmyrah handicraft and other fast-moving products from the Palmyrah producers and give them instant on-spot cash to ease their working capital requirements so that they can continue production without interruption. Over 1000 producers have been benefited through this revolving fund.

    Palmyrah Research Institute (PRI)

    “Under the Ministry of Traditional Industries and Small Enterprise Development, the Palmyrah Research Institute (PRI) was established in Kaithady with a Grant Assistance of India and is undertaking many applied research in partnership with University of Jaffna, other Universities of the country including Industrial Technology Institute (ITI) and National Engineering and Research and Development Centre (NERD).  The research covers assessment of nutritional and medicinal value of the Palmyrah food products, quality improvement related research, new product development (Palmyrah yogurt, Palmyrah cake, Palmyrah instant soup etc.), removal of fungus in the Palmyrah leaf based handicraft products, de-bittering of Palmyrah fruit pulp and other related researches.

    A Dissemination Conference was held on 2nd June, 2014 at Weerasingham Hall, Jaffna to share research findings and over 1000 Palmyrah sector Stakeholders participated in this programme.  Researchers are working very closely with industry, which is commendable.  

    All these development benefits will reach the Palmyrah sector target group and help to uplift their income and quality of life.

    Paranthan Chemicals, Oodisudan Tile Factory and KKS Cement Factory

    “My ministry will work closely with the Ministry of State Resources and Enterprise Development to restart the abandoned factories such as Paranthan chemical Factory, Oodisudan tile factory, and KKS cement factory on grinding and packing operations.

    SME National Policy Framework

    “My ministry is closely working with the Department of Development Finance of the Ministry of Finance and Planning to develop a National SME Policy Framework with the technical support of the GIZ. We have closely consulted with all other relevant Ministries, Chambers, Academia, Representatives of the MSMEs including the banks and financial institutions in developing the National Policy Framework on SMEs. This draft policy will be finalized before end of this year.

    Strengthening the Informal Economy by Supporting 100 Handicraft Villages

    “The Ministry of Traditional Industries and Small Enterprise Development is working closely with the  Department of National Planning of the Ministry of Finance and Planning in developing a 100 Handicraft Village Development Programme to strengthen the informal economy and to ensure that the handicraft sector plays an important component of the value chain in Tourism Development. This programme is proposed to be sizable intervention with over Rs. 5000 mn under Japanese Assistance Programme. Such investments in handicraft sector will boost the handicraft sector and ensure inclusive Tourism, whereby the benefits of foreign exchange earnings from tourist sector to reach the rural handicraft villages in line with the Mahinda Chintana Vision.

    “My ministry will continue to work in building a strong rural economy through the mandate given to this ministry with special focus on micro, small medium industry development, handicraft development and traditional industry development. We will contribute to achieve the Government’s vision of making Sri Lanka an upper middle income country and a Wonder of Asia as envisaged in the ‘Mahinda Chintana Vision for the Future’.


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