The C&T sector in Sri Lanka has recorded a gradual growth in the past few years, with help from the government boosting local manufacturers. While being a small sector in comparison to the country’s heavy industries, there are almost 4,000 cosmetics and beauty care products sold on the local market, according to the Cosmetics, Devices & Drugs Regulatory Authority (CDDA), a government agency regulating the sector, operating under the health ministry. The country has approximately 120 local cosmetics and beauty care product manufacturers and more than 100 importers of such products. There are currently more than 2,500 beauty care, approximately 1,800 skin care, 1,200 hair care and over 175 baby care products in the local market. In addition, there are close to 50 skin whitening products in the market, which are produced both locally as well as overseas.
CDDA Chairman Dr Hemantha Beneragama said that an increase in the number of approvals granted by the authority in recent years for cosmetic products indicates growth in the sector. Sri Lankan manufacturers and importers provide almost equal numbers of personal care products to consumers. However, some cosmetics industry executives think there is room for local manufacturers and importers to expand – and that increased competition would be likely to prompt innovation that increases demand still further.
While Sri Lanka based Nature’s Beauty Creations’ Director and General Manager Nalaka Gunawardena argued that an increase in the number of local manufacturers has been eating away at the market share commanded by international brands, he also said they “face a significant challenge from importers” in a limited number of sub-sectors such as skin care and hair care. Some importers have also decided to set up manufacturing bases in Sri Lanka. For example, CavinKare, based in Chennai, India, used to export its Nyle products to Sri Lanka, but now manufactures them on the island, under licence.
Meanwhile, Gunawardena thinks local cosmetics and beauty care product manufacturers need to get more help from the government in cracking down on cheap imports, possibly by imposing additional duties. A key target would be combating imports of cosmetics designed for use by consumers when travelling, known as ‘baggage cosmetics’. In its 2014 budget, passed in December 2013, the government proposed to increase the taxes imposed on imported cosmetics and beauty care products by an average of 10%. The Sri Lankan government also considered the idea of banning foreign investment in beauty care products. However, officials did not draft regulations, despite backing for the idea by local manufacturers.
Despite this lobbying, imports to the country have remained the same this financial year (2013-2014) so far, compared with year-on-year figures for the 2012-2013 financial year.
Munza Mushtaq, Colombo
