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Find out information on industrial sector in Sri Lanka.
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Industry in Sri Lanka

Sri Lanka has traditionally been an agro-based economy. But over a period of time the government in Sri Lanka realized the need to have an industrialization strategy for the development of the economy.
The role of governments, over the years, especially in developing nations like Sri Lanka has changed radically because the world itself saw rapid changes – especially over the last few decades. In Sri Lanka there was a period when the state sector led industrial growth. This gradually gave way to the semi-government sector and corporations.
The three main strengths that Sri Lanka offers are:
  • Cheap Labor that was easily available and accessible
  • Conducive conditions, including infrastructure and tax relief
  • Literate Workforce, both in terms of skill and literacy 
Free Trade Zones and Export Processing Zones were set up offering many concessions to foreign (and local) investors. Sri Lanka’s traditional exports have been tea, rubber, coconuts, gems and jewellery, in the recent past the apparel industry has gained prominence.
According to the Central Bank annual report in Sri Lanka the industrial sector comprises of four main categories. Those are: 
  • Mining and Quarrying
  • Manufacturing (i.e. processing of agricultural products, Factory industry, Cottage Industry)
  • Electricity, Gas & Water
  • Construction 
The mining and quarrying, which has the highest growth of the industry sector has been growing with increasing rates in the last few years, while the growth of the electricity, gas and water has been reducing drastically since 2006.
Further, the production of the manufacturing sector in 2007 was Rs.394, 233 million. However, when considering the growth rate, the manufacturing sector was the lowest growing sector under the industrial sector.
Industry account for 28% of Gross Domestic Product (GDP) in 2009. Manufacturing is the largest industrial subsector, accounting for 18% of GDP. The construction sector account for 7% of GDP. Mining and quarrying account for 1.5% of GDP. Electricity, gas, and water account for 2% of GDP.
Within the manufacturing sector, food, beverage, and tobacco are the largest subsector in terms of value addition, accounting for 44%. Textiles, apparel, and leather are the second-largest sector with 20% of value addition. The third-largest sector in value added terms is chemical, petroleum, rubber, and plastic products.

Last Updated on: 17-05-2010

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