Employees of Lumala City Cycle Industries Manufacturing Pvt Ltd are calling for urgent government intervention as their company faces an unprecedented crisis that threatens to shut down one of South Asia’s leading bicycle manufacturers.
Located at Panadura, Lumala has played a pivotal role in Sri Lanka’s industrial sector for over five decades, yet escalating costs and unfair market practices are now putting its survival at risk, a statement from the company’s employees said.
‘‘The management has already begun a phased shutdown, closing the steel rim department and one of Sri Lanka’s few chromium plating plants. Further closures, including fork and mudguard production, alloy rim production, frame manufacturing, and the paint department, are imminent unless immediate action is taken. Employees, many of whom have worked at Lumala for over two decades, now fear for their livelihoods,’’ said Ranjith Siriwardana, its factory general manager.
Employees highlight several key challenges that have contributed to this crisis. The local market is being flooded with imported bicycles and electric bicycles, many of which bypass regulatory checks. Additionally, some trading companies are allegedly exploiting tax loopholes by mis-declaring imported parts as raw materials, allowing them to evade customs duties and VAT while selling substandard products at artificially low prices. The absence of protective tariff policies has left domestic manufacturers struggling to compete against these unfair practices.
Furthermore, while finished products are imported cheaply, the raw materials necessary for local production are heavily taxed, increasing manufacturing costs and making local businesses less competitive. These challenges not only threaten the survival of ethical manufacturers like Lumala but also deprive the government of significant tax revenues.
If Lumala continues its shutdown process, the impact will extend beyond its workforce. Hundreds of employees risk losing their jobs, with many having dedicated decades of service to the company. The shutdown will also disrupt renowned local suppliers who depend on Lumala’s operations. Related industries, including motorcycles and motor vehicles, which rely on Lumala’s facilities for raw materials, may also suffer setbacks. Despite achieving a local value addition of 50% to 70%, as verified by the Ministry of Industries, employees feel that their concerns have gone unaddressed.
In a collective plea, Lumala’s employees urge the government to intervene and implement fair tax policies that prevent unethical market practices while ensuring proper tax revenues. They are also calling for a comprehensive investigation through a collaborative effort involving the Ministry of Industries, the Industrial Development Board (IDB), Sri Lanka Customs, and the Inland Revenue Department to address the systemic challenges affecting the industry.
Employees stress that they are not seeking special privileges or tax cuts, but rather fair and consistent enforcement of policies to create a level playing field for all manufacturers.
Government officials have previously expressed their commitment to supporting local industries, and Lumala’s workforce said it remains hopeful that timely intervention will prevent further job losses and industrial decline. (Newswire)