Sri Lankan Manufacturers Fight Back Against Imports
The Sri Lanka Transport Board (SLTB) has announced it will establish two new tyre manufacturing facilities to provide the 14,000 tyres needed for its buses every month while its Ampara tyre factory is being refurbished. The new plants will be located in Matale and Ekala, and SLTB expects to manufacture between 10,000 and 12,000 tyres annually when the first stage of work is complete.
The SLTB’s decision to produce its own tyres rather than import them is perhaps best understood by looking at Sri Lanka’s customs regulations. The SLTB spends Rs 65 million (£308,000) per year on tyre purchases, and each tyre brought into Sri Lanka from overseas is now subject to a tax of Rs 80 (£0.37) per kilogram or 28 per cent of the tyre’s invoiced value, whichever is higher. Assuming a weight of 70 kilograms per tyre, tyre tax, were all tyres to be sourced from overseas, would amount to £62,000. This equates to 20 per cent of total cost.