CMA Sri Lanka proposes to set up Export Houses to promote SME exports

As per the recent statement made by the chairman of the Export Development Board to make exports a national priority, CMA Sri Lanka COVID-19 SME Development Committee strongly recommends its proposal for the creation of Export Houses (similar to the success that had taken place in other countries such as Japan, Korea and Malaysia) that will buy the products from the SMEs and export products and services to global markets.

The SME sector forms the backbone of the economy and is found in all sectors of the economy and accounts for 52 percent of GDP, provides 45 percent of the total employment and makes up more than 75 percent of the total number of enterprises spread throughout the country. 

The target is to increase the SME export contribution towards national exports from the present low of 5 percent to 25 percent within a period of three to five years with the support of Export Houses.  

The Export Houses will be an obvious way of enhancing production of SMEs, finding markets for their products overseas, receiving a fair price for their produce and uplifting the lifestyles of the SMEs and making them sustainable. 

Export Houses will buy from the SMEs engaged in the local farming and fishery industry, producers and manufacturers of goods, suppliers of other exportable products, service providers and Export Villages.
There are four categories, which can be recognised as Export Houses:

(A) Independent export companies set up to procure from the SMEs, agricultural produce, fishery products, manufactured goods or any other exportable products or services such as ICT, skilled services to be recognised as Export Houses. 
(B) Any existing enterprise that is currently exporting products of third parties to be recognised as an Export House. 
(C) Any trading enterprise located within Sri Lanka, which will create foreign markets for the SMEs to engage in direct exports, to be recognised as an Export House. (Similar to a phenomenon of buying offices) 
(D) Suppliers of agricultural produce, fishery products, manufactured goods or any exportable product or service, including IT, to Export Houses to be recognised as indirect exporters and entitled to all benefits enjoyed by Export Houses.

The major role of Export Houses include: 
(1) Act as a marketer for SME products and services in overseas markets
(2) Represent SME manufacturers/producers/ICT service providers  
(3) Study of overseas market competitiveness and gather market intelligence
(4) Engage in foreign market penetration for SME products 
(5) Export Houses will use strategies such as: representations, product demonstration where necessary, business to business (B2B) meetings, participations at overseas exhibitions with SME products 
(6) Provide expertise in operational and logistics management 
(7) Sustainability and continuous ordering of SME products
(8) Risk mitigation

Immediate implementation of the Export Houses concept with the registration granted by the EDB will give a big boost to the SMEs to go into the export market and this will increase national exports and bring in the valuable foreign exchange to the country. This will also give a new strength to the SME sector and the Export Houses could provide the export market for SME products and services spread throughout the country.