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Sri Lanka’s confectioners, bakers facing raw material shortages

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Industry’s exports to 55 countries at massive risk

by Sanath Nanayakkare

Christmas and New Year shoppers are likely to face disappointment as shops and supermarkets across the country won’t be able to stockpile bakery and confectionery products for the festive season due to a looming raw materials shortage in the supply-chain.

Although concerns about the Covid-19 pandemic have begun to recede, the mounting fallout on the supply chain has emerged as a new risk to the confectionery industry affecting not only manufacturers and consumers but thousands of employees making a living from the industry.

Wheat flour supply is already down by 25% on top of the scarcity of sugar, major fats and oils used in the industry as well as LP gas, The Island learnt.

“Confectioners face difficulty in sourcing the wheat flour, sugar and fats required to make their products. This has severely affected our manufacturing and distribution schedules. The ongoing shortage disruption is the biggest risk we see to the sustainability of our businesses both in the domestic market and our significant export market as we export our products to 55 countries including the European countries, the U.K., Canada, Australia, New Zealand, Ghana, Myanmar etc. Lanka Confectionery Manufacturers Association (LCMA) Chairman S.M.D. Suriyakumara told The Island yesterday.

“This predicament has been triggered by a lack of quality flour, sugar and fats caused by the impact of foreign currency shortage on relevant imports and global commodity price hikes. If this trend continues, consumers may not be able to find the products they like in supermarkets in the festive season as we won’t be able to work constructively with our retailers,” he warned,

“At a time the small and medium scale enterprises (SMEs) in the sector are striving to emerge from the pandemic more resiliently, major suppliers of the industry may raise their prices in the run up to the festive season due to rising inflation and foreign exchange shortage that negatively impact their imports. Like all industries, we are managing a number of challenges at the moment, but an impact on the availability of raw materials will be particularly hard to deal with, therefore, we urge the authorities to make effective intervention in order to mitigate the fallout,” Suriyakumar said.

“The confectionery industry consists of companies producing biscuits, cookies, cakes, wafers, toffees, chocolates, desserts, snacks, ice cream and even noodles. This industry was built on many decades of hard work and we produce over 85,000 tons of confectionery per year. Hence supply disruptions and increased costs will cause significant stress and impose additional burdens to both the manufactures and the consumers of these products,” he noted.

“The Sri Lankan confectionery industry has flourished over the years against foreign competition and has successfully retained 100% Sri Lankan ownership. It provides local consumers with products that equate with international brands or perhaps even better,” he said.

“Prima Ceylon (Pvt) Ltd and Serendib Flour Mills provide the industry with good quality wheat flour and they increase prices whenever they deem it necessary. Six months ago, they jacked up the price of wheat flour by 45%.”

“However, right now, we have to be more concerned about the supply and availability of raw materials than the cost because we have to retain our export market which is in constant, stiff competition with other competing global manufacturers in countries such as India and Malaysia among many others.”

” Another issue is the logistics obstacle related to our export business. Finding freight containers to dispatch our exports and then having to load them with enough products amid this raw materials shortage adds insult to injury. However, we have not given up hope. We are determined to keep on doing business even within lower profit margins and the challenging operating environment because we have to try and retain our export market share.”

“Here in Sri Lanka, it’s likely that this supply disruption and resultant shortage of confectionery products could add one more to the list of existing queues for milk powder, LP gas, Kerosene oil, cement etc.” he said.

“The industry employs over 50,000 people directly. As a result of the shortages, we have had to cut down production by about 25% which in turn has led to layoffs of employees. It’s needless to say how a layoff would affect employees and their families. Hence we urge the authorities to ensure that the confectionery industry won’t be in for long-running supply shortages,” Suriyakumara said.

Meanwhile. the representatives of the Lanka Confectionery Manufacturers Association (LCMA) and All Ceylon Bakery Owners’ Association (ACBOA) told the media last week that suppliers of wheat flour are unable to cater to the requirements of the industry as the lack of US dollars has made imports a challenge.

“Prima Ceylon and Serendib Flour Mills are only able to cater to 75 percent of the wheat flour requirement at present and it is feared the supply would further contract in the coming months. Even if we procure wheat flour at higher prices, the two suppliers are unable to meet our demand. The explanation we received was that they did not have enough US dollars to import the required quantities of wheat flour. This puts us in a very difficult situation,” they said.The LCMA cautioned that in addition to the likelihood of smaller manufacturers shutting down businesses which would result in job losses, the export market too would suffer a negative impact as production would have to be limited. It is becoming impossible to operate in the current context as there are shortages of rice, sugar and gas also.” they said.According to media reports, the ACBOA and LCMA have informed all relevant authorities about the issue. Anyhow a solution is yet to be found.

LCMA Chairman S.M.D. Suriyakumara concluded by saying that if the industry faced severe levels of shortages, it would affect not only confectioners and bakers but also employees, consumers and our export earnings.”



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President signals priority for domestic economic policy autonomy

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Govt. in ‘Consideration Mode’ over next IMF programme:

By Sanath Nanayakkare

President Anura Kumara Dissanayake revealed that the government remains in “consideration mode” regarding whether Sri Lanka will enter into a follow-up Extended Fund Facility (EFF) programme with the International Monetary Fund (IMF) once the active facility concludes in March 2027.

Participating in an engaging Fireside Chat at the inauguration of the Sri Lanka Economic and Investment Summit 2026, organised by the Ceylon Chamber of Commerce at the Shangri-La Colombo on October 12, the President emphasised that any future engagement with the IMF must afford adequate policy space for his administration to execute its own sovereign economic vision.

The session, moderated by Bingumal Thewarathanthri, Vice Chairperson of the Ceylon Chamber of Commerce and CEO of Standard Chartered Bank Sri Lanka, saw the Head of State outline a comprehensive roadmap spanning macro-fiscal discipline, port infrastructure expansion, energy sector restructuring, fuel pricing dynamics, and technology training.

Addressing a packed hall of top-tier business leaders, diplomats, and international investors, President Dissanayake noted that while the current IMF arrangement has proceeded without impeding the government’s core economic strategy, a prospective post-March program will undergo rigorous evaluation.

“Our foreign reserve levels are satisfactory for paying our way through the world. However, there is global uncertainty amid the current geopolitical situation. No indicators can say when the war will end or what weather-related disasters could happen,” the President remarked, referencing external vulnerabilities such as Middle Eastern tensions and local climate disruptions like Cyclone Ditwah.

He stressed that while macro-fiscal parameters – including progressive revenue targets and debt-ceiling management – remain fundamental to national stability, the government is acutely conscious of the tax burdens and social costs borne by citizens. Therefore, any future framework proposed by the IMF will be examined through the lens of domestic policy autonomy and social protection.

Turning to critical national assets, President Dissanayake announced bold restructuring plans for the Port of Colombo aimed at elevating Sri Lanka’s position as a dominant regional maritime hub.

East Container Terminal (ECT): The government intends to grant management and operating rights of the ECT to a private sector partner while retaining 100% state ownership. Operating under the Sri Lanka Ports Authority (SLPA), the terminal currently handles approximately 500,000 TEUs against a potential capacity of 3.2 million TEUs. Five to six major global shipping lines have already expressed preliminary interest.

West Container Terminal II (WCT II): A funding requirement of approximately $1.4 billion for breakwater infrastructure is being sought from multilateral development institutions. Preliminary design work, assisted by the Asian Development Bank (ADB), is slated for completion by April 2027, adding another 3.2 million TEUs in annual throughput capacity upon full buildout.

Logistics Hub & Custom Clearance: The SLPA will call fresh tenders for a dedicated logistics center within the Port of Colombo following the resolution of land disputes. Additionally, Cabinet approval has been granted for a Public-Private Partnership (PPP) to establish a 150-container examination facility in Kerawalapitiya to streamline Customs clearance.

Addressing energy security and domestic distribution, the President indicated that existing petroleum agreements with private market participants – including Lanka IOC and Sinopec – would undergo formal review involving the Attorney General.

Expressing concern over distribution bottlenecks in outstation areas where private outlets dominate, President Dissanayake called on private players to balance profit margins with social responsibility during times of price volatility. To guarantee uninterrupted national supply, the Ceylon Petroleum Corporation (CPC) plans to add 75 new filling stations across the island.

Furthermore, to enhance maritime competitiveness, the government is considering lowering the 2.5% tax/levy on bunkering services in Budget 2027 and exploring CPC-private partnerships for bunker fuel storage expansion at the JCT Oil Bank.

In renewable energy, the government will open four major grid transmission lines for private-sector participation and transition away from fixed feed-in tariffs set by the Public Utilities Commission of Sri Lanka (PUCSL) toward competitive bidding to drive down generation costs. Floating solar projects, such as the Ibbankatuwa model, will be prioritised to overcome land availability constraints.

In a bid to address structural workforce shortages in high-tech sectors, the President revealed that Sri Lanka will sign an agreement with Singapore next week to establish a specialized training institute on Wijerama Mawatha in Colombo. The center will focus on rapidly expanding local capacity in Information Communications Technology (ICT) and Artificial Intelligence (AI).

He also highlighted plans to restructure public sector remuneration for highly skilled professionals and proposed an outcome-based procurement model for international promotional campaigns, such as global tourism marketing, where agencies are compensated based on verified growth in tourist arrivals.

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‘SL, a top market in region for quality powder coatings’

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Franck Derouen (L) and Nazru Nizar at the product launch.

By Hiran H. Senewiratne

‘Sri Lanka is a top market in the South Asian region for quality powder coatings, Franck Derouen, Business Director, Industrial MEA – West & Central Asia, Axalta Coating Systems (ME) LLC, said.

‘We see significant long-term potential for powder coatings in Sri Lanka and look forward to working closely with Richardson Holdings to offer Axalta’s technology, expertise and global standards for all customers, Derouen said at a launch of the products in Sri Lanka together with Richardson Holdings recently. The event was held at the ITC Ratnadipa, Colombo.

Derouen added: ‘More than a brand transition, this appointment comes as project volumes and material demand continue to rise across Sri Lanka’s construction and property development sectors, giving developers and specifiers greater access to premium performance powder coatings at a time of renewed industry activity.

‘For architects, engineers, extruders and applicators, Axalta’s powder coatings combine UV resistance, gloss retention and corrosion protection with the technical performance expected for long-term architectural projects.’

Group Managing Director, Richardson Holdings, Nazri Nizar said, ‘A strong global brand might open the door. However long-term customer trust is built locally through dedicated support and reliable delivery. The true measure of a distributor lies in the service, care, and operational execution which follows after the product arrives.

‘Combining Axalta’s 150 years of global coating expertise with Richardson’s two decades of deep local relationships and technical know-how, we are bringing customers the best of both worlds.

‘Bridging global standards with local expertise, Richardson Projects will serve as Axalta’s trusted local powder coatings partner, combining global technology with two decades of on-the-ground experience serving Sri Lanka’s construction ecosystem.’

Pradeep Kahawalage, Chief Executive Officer, Richardson Projects, said, ‘After two decades building trust in Sri Lanka’s powder coatings industry, this marks an important new chapter for Richardson. Axalta gives us a global technology partner that matches the standards we have already built our reputation on. We are excited to bring that expertise to Sri Lanka’s construction and aluminium industries in the years ahead.

‘With a focus on sustainability, technical excellence and long-term partnership, Richardson looks forward to supporting architects, developers, fabricators and applicators throughout Sri Lanka with Axalta powder coating as the industry continues to grow.’

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99X Sri Lanka takes lead in product engineering and tech solutions

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From left: Chrishan de Mel, Chief Marketing and Corporate Affairs Officer, 99x Product Engineering; Odd-Sverre Østlie, Group CEO, 99x Norway; Shehani Seneviratne, Chief Operating Officer, 99x Product Engineering; Kalana Wijesekara, Chief Developer Experience Officer, 99x Product Engineering.

By Steve A. Morrell

Headquartered in Norway, Sri Lanka’s 99x office is emerging as a global leader in digital product engineering and tech solutions.

The above products and their development are prioritized in even local university level digital technology centered courses of study. Priority is increasingly attached to them in the context of career development.

Shehani Seneviratne, Chief Operating Officer of 99x Product Engineering, while reiterating the importance of these subject areas at a recent event stressed their continued centrality in degree level courses of study.

The event brought together members of the 99x leadership team including Odd-Sverre Østlie, Group CEO of 99x, Kalana Wijesekara, Chief Developer Experience Officer, Shehani Seneviratne, Chief Operating Officer, 99x Product Engineering, and Chrishan de Mel, ChiefMarketing and Corporate Affairs Officer of 99x Product Engineering.

Opening the event, Chrishan de Mel shared how 99x’s Agent Control Plane xians.ai was awarded the “Best Agentic AI Solution” at the recently concluded National AI Awards. The platform was also awarded national recognition at the SLASSCOM National Ingenuity Awards as the “Best Innovation in Internal Processes, Technology or Framework” category. Earlier this year, the 99x AI-first initiatives won the overall gold award at the Best Management Practices awards.

As 99x expands its use of AI tools and agents across engineering, support and other functions, the company recognised the need for greater visibility into how these AI-assisted workflows perform. As AI continues to reshape traditional engineering workflows, it also creates new opportunities to improve productivity, quality and speed. This need led to the development of AI Hub, 99x’s new platform for observing and measuring AI assisted workflows.

Speaking at the AI Hub launch, Kalana Wijesekere said, AI adoption is happening at a remarkable pace but adopting more tools does not automatically mean achieving better outcomes. AI Hub gives teams the visibility to understand what is happening within their AI assisted workflows and enables them to make informed decisions about how these workflows should evolve.

Sharing an update on the 99x group’s global journey and market outlook, Odd-Sverre Østlie highlighted the company’s continued expansion across Europe, the Americas and Asia, alongside growing demand from customers seeking to integrate AI into their products and operations. He stated, ‘AI is fundamentally changing the expectations our customers have from their technology partners. They want to move faster, experiment more quickly and increasingly understand how AI can create measurable business value. Our ambition is to be a long-term engineering partner that can help customers navigate this transformation. The launch of AI hub advances 99x’s AI-first strategy moving beyond the adoption of AI tools.’

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