Lanka Tiles partners China firm to export tiles to the US amid trade war
ECONOMYNEXT- Sri Lanka based Lanka Tiles Plc, said setting up a joint venture with a China’s Foshan Shiwan Yulong Ceramic Co. Ltd and a US national to export mosaic tiles after US slapped anti-dumping duties on Chinese firms.
Lanka Tiles, with the technical assistance of Yulong, will convert 2,000 square metres per day of idling capacity to manufacture porcelain mosaic tiles for exports, with an investment of 200 million rupees.
“This agreement was entered into in light of USA imposing anti-dumping duty on ceramic and porcelain products of Chinese origin reaching USA market,” Lanka Tiles said in a statement.
“This new tariff regime has created opportunities for other manufacturers of similar products to increase exports to USA.”
“It is envisaged that approximately 1 billion rupees of sales revenue will accrue to Lanka Tiles Plc within the next two to three years from the sale of porcelain mosaic tiles in both export and local markets.”
The firm said shipping from the revamped facility will start by April 2020.
The agreement is based on standard commercial terms which apply to similar arrangements where technical and sales support is provided by a third party, Lanka Tiles said.
Lanka Tiles stock was up 1.30 rupees at 77.30 rupees in mid morning trade.
The US-China trade war has benefited Sri Lanka’s apparel industry as well, with more orders being given to Sri Lankan exporters.
The trade war has been ongoing for 19 months, with the US dissatisfied with its trade deficit with China, and imposing tariff and non-tariff barriers on Chinese goods, which faced retaliation from the East Asian economy.
On Sunday, the US and China agreed on the first phase of a trade pact that would ease tensions between the two economies, but analysts have said that much progress needs to be made. (Colombo/Dec16/2019)
Jehan Perera - Executive Director National Peace Council