Employees of Lumala City Cycle Industries Manufacturing Pvt Ltd, one of South Asia’s leading bicycle manufacturers, are urgently calling for government intervention to prevent the company’s collapse, said a release.It said: Located in Panadura, Lumala has been a cornerstone of Sri Lanka’s industrial sector for over 50 years. However, rising costs and unfair market practices now threaten its survival.

The company has already begun a phased shutdown, closing its steel rim department and one of the country’s few chromium plating plants. Further closures, including fork and mudguard production, alloy rim manufacturing, and the paint department, are imminent unless immediate action is taken. Ranjith Siriwardana, Lumala’s factory general manager, expressed concerns over the livelihoods of employees, many of whom have dedicated over two decades to the company.

Employees cite several challenges, including the influx of cheap imported bicycles and electric bicycles that bypass regulatory checks. Some trading companies are allegedly exploiting tax loopholes by misdeclaring imported parts as raw materials, evading customs duties and VAT, and selling substandard products at low prices. Additionally, heavy taxes on raw materials for local production have increased manufacturing costs, making domestic businesses less competitive.

The potential shutdown of Lumala would have far-reaching consequences, affecting hundreds of employees, local suppliers, and related industries such as motorcycles and motor vehicles. Despite achieving 50% to 70% local value addition, as verified by the Ministry of Industries, Lumala’s concerns remain unaddressed.

Employees are urging the government to implement fair tax policies, prevent unethical market practices, and conduct a comprehensive investigation involving the Ministry of Industries, Industrial Development Board, Sri Lanka Customs, and the Inland Revenue Department. They emphasize the need for a level playing field, not special privileges, to ensure the survival of ethical manufacturers like Lumala.