Business

Spike in global raw material prices hurt SL’s corrugated carton industry

Published

5 years ago

2021/01/3

Sri Lanka’s corrugated carton industry is facing hard times with many manufacturers struggling to insulate themselves against global price escalations which an industry player warned posed the threat of business closure with significant challenges to their financial performance.

“The biggest challenge the industry has to grapple with is the constantly fluctuating raw material prices. There is an acute global shortage of paper due to the Covid-19 pandemic, with many manufacturers experiencing disruptions in business and supply chain”, he cautioned.

The pressure on freight has also contributed to the upsurge in paper prices by over 25%, with the upward trend expected to continue, he said.

Sri Lanka’s annual total carton production is approximately 150,000 metric tons. However, there was no adequate growth visible in the industry due to either slow or minus growth in the economy in the recent past, he noted.

A few local companies expanded production capacities by adding extra automatic box making plants anticipating economic growth in the country. This initiative saw a significant increase in manufacturing capacity, with the industry geared to accommodate new opportunities, he noted.

However, many paper manufacturers are now operating below the normal production capacity, and due to low consumption of commodities, waste paper availability has nose-dived in the backdrop of world pulp prices spiraling by around 45-50%, industry officials said.

The local corrugated carton industry predominantly caters to the B2B market. As a result, the industry has to work with very thin margins due to heavy competition among the manufacturing companies. Hence, the demand for cartons is comparatively low, they explained.

The history of the corrugated carton industry in Sri Lanka goes back to many decades. Initially, companies started manufacturing boxes with Double Facer machines and with the expansion of other industries and markets, corrugated machinery was converted into fully automated lines. At present, there are over 30 corrugated carton manufacturers, of which seven account for 70% plus market share.

Packaging is an integral part of a supply chain. The corrugated packaging industry is a vital component of the economy as it caters to the needs of many sectors in the economy, food and beverages, fast-moving consumer goods (FMCG), industrial and pharmaceuticals. E-commerce is also another key trend that has created a huge impact on corrugated carton demand. Hence, the growth of the corrugated packaging industry is not independent, but correlated with the growth of the other industries and GDP growth, they stressed.

“The appearance of the box, strength and short lead times are the key deliverables that customers want from the industry. The appearance and the strength are totally dependent on the quality of the paper used for manufacture and the printing facilities of the individual manufacturer”, the officials outlined.

A few decades ago, the machines were imported to Sri Lanka from Japan with some reconditioned units purchased. With the development of the Chinese machinery manufacturing industry, where they customized machine technology embedding robotic packaging automation, many local companies sourced their machinery from China, they further said.

Two decades ago, Chinese machinery was considered of inferior quality but today, the Chinese machines are comparable with those made in Europe, they added.

There were earlier many small-scale corrugated carton manufacturers and many of them used the Double Facer corrugating machines. In these companies, two layers were produced separately and thereafter the layers were pasted manually. As a result, the volume produced by these companies was low and the quality was also not up to the expected standards, the officials continued.

Consequently, the cost of production and the delivery lead time were also considered too high in these companies. Therefore, many of them had to quit the business, while a few others acquired automatic box manufacturing plants resulting in many Sri Lankan manufacturers opting for automatic plants, they noted.

Another key factor of the industry is that the cartons manufactured in Sri Lanka are of high-quality as quality materials are sourced from Europe, American Sub Continent, Australia and various other parts in the world, they said.

In developed economies, when customers purchase corrugated boxes, they more or less look for the bursting strength of the box, not the variety or the grammage of paper being used. However, unfortunately, in Sri Lanka most customers demand grammage and the variety of papers instead of box strength. Eventually, in most instances, the corrugated packaging produced in Sri Lanka is over specified. Sadly, this is also the case with many multinational companies operating locally.

The same companies in India use Test Liner on Outer Ply, while they demand Kraft Liner paper for this purpose in Sri Lanka, the industry officials said.

In keeping with the government’s commitment to develop local industries, there are positive expectations that the corrugator packaging industry would be reviewed and given a sustainable opportunity to grow, the officials added.

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Business

Focus on developing the Coconut and Food & Beverage export industries into a USD 3 billion economy within the next two years

Published

54 mins ago

2026/06/27

Priyan

A discussion was held on Friday (26) afternoon at the Presidential Secretariat between President Anura Kumara Dissanayake and industrialists in the coconut and food and beverage manufacturing sectors on developing the coconut and food and beverage export industries into a USD 3 billion economy within the next two years.

Accordingly, the objective is to expand the coconut-based export industry into a USD 2 billion sector and the food and beverage export industry into a USD 1 billion sector, and extensive discussions were held on the plans required to achieve these targets.

The President stated that the Government is prepared to provide every possible form of incentive necessary to promote export diversification and encourage value-added products.

Proposals and suggestions aimed at developing these industries were also presented during the meeting, and the President further noted that future plans would be formulated after taking all such proposals and recommendations into consideration.

The President also expressed agreement to provide incentives for establishing industries in the Northern Province and assured that the Government would extend its fullest support for setting up coconut-based manufacturing industries in the region.

Attention was also focused on plans to streamline the importation of raw materials required for export production while safeguarding domestic producers. President Anura Kumara Dissanayake further stated that his Government’s objective is to build the country’s economy into an export-oriented production economy by strengthening domestic supply chains.

Minister of Labour and Deputy Minister of Finance and Planning Anil Jayantha Fernando; Secretary to the Ministry of Finance, Planning and Economic Development, Dr Harshana Suriyapperuma; Secretary to the Ministry of Industry and Entrepreneurship Development, Thilaka Jayasundara; and Chairman of the Export Development Board, Mangala Wijesinghe, were among those present.

The President of the Sri Lanka Food Processors Association, Aruna Senanayake; Vice President Rasika Seneviratne; Managing Director of CBL Group, Shyamali Wickramasinghe; Chief Executive Officer of SriLankan Catering Ltd, Mangala Wijesekera; Managing Director of Ma’s Tropical Food Processing (Pvt) Ltd, Mario D. Alwis; Chairman of the Consumer Foods Sector of John Keells Food Holdings PLC, Daminda Gamlath; together with a number of leading business leaders from the food production sector were also present.

President’s Media Division (PMD)

Business

Sri Lanka Retailers’ Association unveils strategic roadmap for the future at 9th AGM

Published

10 hours ago

2026/06/27

Thilina Walpola

The newly elected Office Bearers and Executive Council of the Sri Lanka Retailers’ Association for 2026–2027.

The Sri Lanka Retailers’ Association (SLRA) successfully held its 9th Annual General Meeting (AGM) on 23 June 2026 at Hilton Colombo Residencies, bringing together members of the country’s organized retail sector to review the Association’s achievements over the past year and outline its strategic priorities for the future.

The AGM formally adopted the Annual Report and Audited Accounts for the financial year 2025/26 and elected the Office Bearers and Executive Council for the year 2026–2027.

Infiyaz M. Ali, Director of Healthguard Pharmacy Ltd, was announced as President of the Sri Lanka Retailers’ Association for 2026–2027. He will be supported by Mahesh Wijewardena, Executive Director and Group Chief Executive Officer of Singer (Sri Lanka) PLC, as Senior Vice President, and Kumar De Silva, CEO of SPAR SL Private Ltd, as Vice President.

The newly appointed Executive Council comprises senior representatives from leading retail organizations across Sri Lanka, reflecting the Association’s continued commitment to representing the diverse interests of the retail sector.

Addressing the gathering, President Infiyaz M. Ali emphasized the importance of collaboration, innovation, and industry advocacy in driving the next phase of growth for Sri Lanka’s retail sector.

“Retail continues to be one of the most dynamic sectors of the Sri Lankan economy. As consumer expectations evolve and technology reshapes the industry, the role of SLRA is to create opportunities for knowledge sharing, collaboration, and collective action. We remain committed to supporting our members and contributing to the sustainable growth of the retail ecosystem,” he stated.

The AGM was honoured by the presence of Wasantha Samarasinghe, Minister of Trade, Commerce, Food Security and Cooperative Development, who attended as Chief Guest. In his address, the Minister highlighted the importance of the retail sector as a key contributor to economic development, employment generation, and consumer welfare, while emphasizing the need for stronger public-private collaboration to strengthen the industry’s competitiveness.

Members also had the opportunity to gain insights from the Guest Speaker, Chayu Damsinghe, Head of Macroeconomic Advisory at Frontier Research, who shared perspectives on Sri Lanka’s economic outlook, emerging business trends, and the opportunities and challenges facing the private sector in the years ahead.

A key highlight of the evening was the presentation on the upcoming Sri Lanka Retail Forum 2026, SLRA’s flagship industry event, which will be held under the theme “Retail Without Boundaries – Building the Next Growth Engine.” The forum is expected to bring together more than 500 industry leaders, retailers, entrepreneurs, policymakers, technology providers, and investors to discuss the trends shaping the future of retail.

The Association reaffirmed its commitment to supporting retailers through industry advocacy, professional development initiatives, policy engagement, and knowledge-sharing platforms that foster innovation and business growth.

Since its establishment in 2015, SLRA has played a pivotal role in bringing together retailers from diverse sectors including FMCG, fashion, healthcare, consumer electronics, and digital commerce, creating a unified voice for the industry.

With a renewed leadership team and an ambitious programme of activities planned for the year ahead, SLRA looks forward to working closely with its members and stakeholders to strengthen Sri Lanka’s retail sector and contribute to the country’s economic development.

Business

Month-end profit-takings drive stock trading; indices up

Published

11 hours ago

2026/06/27

Thilina Walpola

CSE trading was yesterday driven by month- end profit-takings, market analysts said.Amid those developments both indices moved upwards. The All Share Price Index went up by 2.77 points, while the S and P SL20 rose by 10.91 points.

Turnover stood at Rs 1.91 billion with two crossings. Those crossings were; ACL Cables 2.1 million shares crossed to the tune of 209 million; its shares traded at Rs 100 and Hayleys 100,000 shares crossed for Rs 24.1 million; its shares traded at Rs 240.

In the retail market companies that mainly contributed to the turnover were: Hayleys Rs 141 million (587,000 shares traded), Lanka Realty Rs 105 million (1.8 million shares traded), CIC (Non Voting) Rs 81 million (3.1 million shares traded), HNB Finance Rs 79 million (8.3 million shares traded), Dialog Axiata Rs 56.7 million (1.2 million shares traded), Colombo Dockyard Rs 48.6 million (371,000 shares traded) and Singer SriLanka Rs 46.6 million (586,000 shares crossed).

During the day 63.9 million share volumes changed hands in 18300 transactions.

It is said that manufacturing sector counters, especially Hayleys, performed well while construction related companies, especially ACL Cables, also performed well. Banking sector counters, especially HNB, were also notable on the floor.

Meanwhile, Lee Hedges concluded negotiations with Amana Bank to sell and transfer its land and premises in Kollupitiya for a total consideration of Rs 2.7 billion, with the transaction completed on June 25, 2026.

Lee Hedges shares were trading up 2.52 percent, at Rs.325.75, while Amana Bank was up 1.13 percent at Rs.26.80.

Yesterday the rupee was quoted at Rs 336.90/337.00 to the US dollar in the spot market, from Rs 337.25/35 the previous day, while bond yields were quoted slightly higher, dealers said.

The telegraphic transfer rate for Sri Lanka’s rupee against the US dollar was 332.3416 buying, 342.0372 selling; the euro was 376.2315 selling, 389.9580 buying; and the pound was 436.5994 buying, 451.8110 selling.

By Hiran H Senewiratne