COMPILED BY Yamini Sequeira

TYEAB AKBARALLY

Managing Director
Akbar Brothers

INNOVATION IS THE KEY TO SUCCESS

Sri Lanka needs to accelerate its technology and innovation quotient in order to be competitive in the global market. At a time when the nation is mired in an economic crisis, product innovation can play a key role in the urgent need to bolster the nation’s foreign exchange reserves.

The Managing Director of Akbar Brothers Tyeab Akbarally explains: “Being ahead of the innovation curve is very important for any exporter looking to make a mark on the global stage. Continuous innovation is imperative to remain relevant and expand our customer base. It doesn’t need to be on a mass scale; even small enhancements can bring tangible benefits.”

He elaborates: “Listening to customers and even distributors in export markets enables us to alter products slightly to meet current and future trends. We recently set up a tea extraction business to cater to the demand from multinationals – Akbar Brothers was the first to set up a tea bag machine in Sri Lanka 45 years ago when it was relatively unknown.

“Although the company retains traditional products, we also enhance our product range with new flavours, improved packaging and so on to meet different target segments,” he adds.

However, exports are also price sensitive due to greater competition from other emerging markets, which means that exports from Sri Lanka need to be competitively priced. Customers are now shopping around against a backdrop of global inflation.

Moreover, the rising cost of manufacturing is pushing companies to do more with less to manage these expenses.

Successive governments have supported the export sector on the whole; but presently, one of the main roadblocks to export sector growth is the high cost of manufacturing. To this end, Akbarally asserts: “Sri Lankan products need to break into more developed markets if they want to command higher prices for sustainable, organic and other niche pro­ducts.”

He cautions that as Sri Lankans, “we need to guard against having ‘short memo­ries,’ given that fuel and gas queues are a thing of the past.” And the core problem of the fiscal deficit remains.

Commenting on the viability of breaking out of traditional exports, Akbarally says: “Even smaller traditional exports of spices, condiments and coconut are yet to be fully maximised. By infusing these segments with innovation, they can become value added exports.”

He adds: “In terms of services, Sri Lanka can be an outsourcing hub for many multinationals. This will not only provide local employees with an opportunity to earn forex but also create employment and help prevent the brightest minds from leaving the country for better job prospects.”

The Port City should be opened up for large banks to establish their regional head offices. This will bring it in line with other prominent financial centres such as Dubai and Singapore.

On Akbarally’s wish list for promoting product innovation are consistency in policies and taxation: “The exporter community has been largely resilient and supported the economy. Unfortunately, the higher corporate taxes this year will impact R&D and product innovation as these higher costs will have to be managed in parallel with inflation.”

And he warns that “the profitability of exporters will definitely be im­pacted in the coming months.”

How the government manages the fiscal deficit and capital expenditure will determine Sri Lanka’s economic performance in 2023. Traditional forex sources such as tourism and worker remittances need to be augmented with new foreign exchange generating sources.

Akbarally adds: “The IMF’s Extended Fund Facility (EFF) will hopefully trigger more bilateral loans to help the economy get back on track and help cash flows. But we must eventually reduce our dependence on borrowings.”

“Moreover, it is important that exporters display loyalty to Sri Lanka and not move their operations overseas,” he urges.

Sri Lankan products need to break into more developed markets if they want to command higher prices for sustainable, organic and other niche products