8 February 2022 04:44 am Views - 493
By Shabiya Ali Ahlam
The day-to-day operational activities are turning bitter for the local confectionery industry, as it is being slapped with the escalating production costs and poor access to raw material for manufacturing. The mounting challenges have impacted the overall output of the sector.
While the industry had hopes of 2022 being the year some level of normalcy would return, the stakeholders are faced with the harsh reality, where they might have to wait an entire year for the issues, both microeconomic and macroeconomic, to cool down.
“The current situation is not very favourable for us. We are not looking at making profits or even reaching breakeven anymore. We are only looking to survive and continue to exist this year,” Lanka Confectionery Manufacturers Association (LCMA) Chairman S.M.D. Suriyakumara told Mirror Business.
In the last six months, the industry was faced with the upward price revisions for some of its key ingredients, namely wheat flour and sugar. The import ban imposed on palm oil, where the industry was expected to use coconut oil-based fats as an alternative, too hampered the marginal progress the industry was achieving.
Adding to the woes of the industry are the ad hoc policies on sourcing raw materials, increase in the prices of utilities, including fuel and the ongoing forex crisis.
“The last two years were challenging no doubt but the last six months were exceptionally difficult. We don’t see anything improving this year for the confectionery industry,” Suriyakumara asserted.
The confectionery industry stakeholders are neither putting any of the long-term plans into action nor they are looking at readjusting the plans made previously, due to the increase in volatility in the local business environment.
The industry has moved away from the half-year, quarter and even monthly plans and are now operating week-to-week instead.
“We can’t look at long-term or medium-term plans anymore. We have no idea what could happen. Our main strategy is to survive. So, to survive as an industry, we are trying our best to see how we can manage day-to-day or week-to-week,” he said. Meanwhile, although representations were made to the government authorities for some relief, the LCMA chief said the membership acknowledges that not much can be done in the present economic crisis situation.
“As a local industry it’s our responsibility to see that somehow during this difficult period, not to be a burden to the government. We will try our level best to see how best we can manage ourselves as an industry but it’s uncertain for how long we will be able to manage,” said Suriyakumara.