Sri Lanka's Jaffna peninsula seeks more trade and investment

Lanka Business Online - 18/08/2013
By Anushika Kamburugamuwa

Sri Lanka’s northern Jaffna peninsula, which has emerged from a 30-year civil war, has untapped potential for greater investment and trade officials said.

"We welcome all the new businesses and investments," K Pooranachandran, president of the Jaffna chamber of commerce and industry said.
"We are here to help them. The place is very conducive for businesses and new developments."

The Jaffna peninsula, which has a population of about 600,000 population, is now looking up businesses in the area linking with other areas in the island.

"Trade links have developed strongly," Pooranachandran said. "There is a very good link with Colombo and Jaffna.

"If you come to Jaffna you can buy anything you want. Anything is available in Jaffna."

He said Jaffna has seen strong economic growth helped by major infrastructure projects in the area. Tourism has also developed fast.

However officials say the war affected area can also export out of the country.

"The area remains a virtually untapped market for exports," Sujatha Weerakoon, director general of Sri Lanka's Export Development Board said.

"Jaffna is good for agro related business, so lot of value addition can be done in food processing in order to cater to the increase demand for agro goods in the island and world."

She was speaking at the launch of Jaffna international trade fair (JITF) 2014 to be held for the fifth consecutive year.

The fair is to be held at the Duraiappah Stadium in Jaffna on from January 17 to 19, next year.

The exhibition will features the construction industry, hospitality industry, food, beverages and packaging, automobiles, ICT industry, financial services, apparel, agricultural, consumer goods.

Organizers say they expect over 250 local and international businesses to participate in fair. Last year over 50,000 people had visited the fair.

There will be several business forums, an investment forum and an education exhibition. Visiting business leaders are expected to form links with local enterprises. They also expect the participation from the diaspora.

"The area has a high cash flow where at least one member of the family or relations is living in overseas," Aasim Mukthar , general manager of Lanka Exhibition and Conference Services which is running the event said.
"The mobile penetration is also high due to lack of fixed connection in the area. So Jaffna is an ideal place to explore new businesses."

FACETS expects record SMEs

FACETS 2013 to attract larger crowds this year

Over 50 Small and Medium Eenterprises (SMESs) will take part in FACETS Sri Lanka 2013, the international gem and jewelry exhibition, according to the organizing committee. Organized by the Sri Lanka Gem and Jewelery Association (SLGJA), this year’s event held for its 23rd year, will be held from August 29 to September 1 at the Sirimavo Bandaranaike Memorial Exhibition Center.

FACETS 2013 not only provides ample opportunity for local businesses to showcase their capabilities to participating delegation from around the world, but also creates strong networking, knowledge sharing and skill enhancing opportunities for the SME sector enterprises. Local manufacturers will be able to acquire knowledge on technology, process, best practices and the importance of maintaining industry quality standards right throughout the event.

Juzar Adamaly, Chairman FACETS 2013 said, “The SME sector plays a vital role within the entire gem and jewelry industry. It is also a major component to the entire industry with targets to achieve US$ one billion export revenue by 2016. The government has also introduced a loan scheme to the SME sector further understanding the importance of nurturing quality businesses and products”.

The organizers have planned to display precious and semiprecious gems as well as an exclusive hall dedicated to jewelry, lapidary and machinery items. Knowledge sharing sessions include a series of seminars conducted by international and local panelists this year. Organizers will be providing shuttle services from most of the hotels and travel desks to arrange tours for visiting delegation, customs on site, National Gem and Jewellery Authority Gem testing and assaying facilities and services like clearing and forwarding facilities for exports and individual security to booths through our official security surveillance providers Securo Dynamics.

In the 2003 Budget, the Government of Sri Lanka declared Sri Lanka Gem and Jewellery Association (SLGJA) as the Apex industry body and charged it with a leadership role to formulate industry-level strategies to increase productivity and competitiveness. Since then, the Association works closely with the government’s National Gem and Jewellery Authority and the Sri Lanka Export Development Board to advocate national policy and give input for the industry’s regulatory framework. Currently, SLGJA has over 350 members who together account for over 75 percent of the country’s gem and jewelry exports.

Fruit and vegetable exports record 21% growth

Sunday Observer - 18/08/2013
By Lalin Fernandopulle

Fresh fruit and vegetable exports recorded a 21.8% growth in the first six months of this year, said International Foodstuff Group of Companies, Chairman and a member of the Advisory Committee of the Export Development Board, Sarath de Silva.

He said that the fresh fruit and vegetable sector recorded this growth despite a slump in exports of other commodities. Export revenue has been declining since last year with a revenue drop of 6.8 percent in April this year according to the Central Bank. Export decline has been attributed to the low global demand for commodities.

De Silva said that fresh fruits and vegetables is one sector that has grown when other sectors have recorded a decline in exports. Credit should go to the Fruit and Vegetable Exporters Association which is targeting an export revenue of Rs. 4,000 million by the end of this year.

The exporter is confident that they could achieve that target.

Sri Lanka exports fresh fruits and vegetables to the Middle East, Europe and the Maldives. Export of fruits and vegetables has grown from 10-12 varieties to around 135 varieties.

More than 17 varieties of salads are exported.Sri Lanka produces more than 800,000 metric tons of fruits and vegetables annually and exports fresh and processed varieties to many countries.

Around 90 per cent of fresh products are exported to the Middle East and the Maldives and around 75 percent of the processed products to the European market.

“Sri Lanka's target should be to get into orchard cultivation of perennial crops. We should aim at cultivating mangoes, avocado, and tropical fruits such as soursop, rambuttan and mangosteen,” de Silva said.

Fruits and vegetables are primarily grown by the semi commercialised small farmers whose individual extent of land does not exceed a hectare. The government has encouraged private sector involvement in commercial cultivation.

Sri Lanka will commence seed paddy production and supply the local market as import substitution for Thai Basmathi rice by 2015. We will commence exports to India under the FTA and also to Africa.

Harvesting of big onions has commenced in Dambulla, North Western region and Matale which will help reduce imports by around 30 percent. Sri Lanka imports Rs. 750 million worth of big onions annually. The next stage is to get into cultivation of white onions. Currently field tests are being conducted, de Silva said.

He said that 1,000 commercial farmers will be recruited with the help of the University of Wayamba, Ruhuna, Uva Wellasa to help them become commercial farmers and agri-entrepreneurs.

Paddy production in Sri Lanka recorded an all time high of 4.869 million metric tons in 2012/13.

Agriculture is the most common livelihood of Sri Lankans, and about 100 varieties of fruits and vegetables are grown in Sri Lanka’s varied agro-climatic areas.

The cool and salubrious condition in the hill country are ideal for crops such as carrot, leeks, cabbage, cauliflower, salad leaves, beet, bean, bell pepper, salad cucumber while dry and wet areas of the low country are suitable for tropical fruits and vegetables ranging from green chilli, red onion, pumpkin, bitter gourd, melon, sweet and sour banana types, queen pineapple, papaya, mango, lemon and gherkin.

The increase in paddy production is attributed to the end of the battle against terrorism which helped bring vast acreages of land in the North and the East under the plough. The government's fertiliser subsidy has encouraged farmers to increase rice production. Sri Lanka is currently self-sufficent in rice and maize which will be exported next year.

Sri Lanka has been exporting rice to the Middle East and Europe where Sri Lankan and Indian expatriates consume Sri Lankan varieties of rice.

Rice is the staple food in Asia and Africa which is looking for white long grained rice similar to rice in Thailand and Malaysia. Since rice eating is a traditional habit to make people to consume a new variety is a difficult task but if we persist and promote the health benefits of Sri Lankan rice which is produced using pesticides and weedicides with minimum chemicals, the world will buy our rice.

De Silva said that this is why the government has decided to expand cultivation of better tasting, white long grained rice varieties for a vibrant export market.

New regulations likely to boost Sri Lankan apparel exports

Fibre2fashion.com - 08/08/2013

Sri Lanka’s apparel sector is likely to benefit from the new regulations issued by the Finance Ministry of the country.

The regulations cited as the Finance Act - Commercial Hub Regulation (CHR) No. 1 of 2013, will be applicable on all new established enterprises in the country.

Under the regulation, any new enterprise which is established or incorporated in Sri Lanka, where at least 65 percent of its total investment has been from foreign sources, shall be exempted from the application of Provisions of the Customs Ordinance (Chapter 235), the Exchange Control Act (Chapter 423), the Imports and Exports (Control) Act, No. 1 of 1969, and acts referred to in schedule of the Principle Act as amended by the Finance Act, No.12 of 2013.


The enterprises must be engaged in business activities such as off-shore business where goods can be procured from one country or manufactured in one country and shipped to another without bringing the same to Sri Lanka, which includes enterprises in the apparel sector as well.

The regulation was released by President Mahinda Rajapaksa, who is also the Minister of Finance and Planning, under PART IV of the Finance Act, No. 12 of 2012, as amended by Finance Act, No. 12 of 2013.

The regulation also declared the island’s main port in Colombo and second international harbor in the southern city of Hambantota as free ports.

In addition, two trade zones and Sri Lanka’s second international airport, Mattala Rajapaksa Airport, which is funded by China, have been included in the bonded areas.

The latest announcement is expected to increase investment and promote economic growth in the country.

The Joint Apparel Association Forum, the apex body representing the Sri Lankan apparel industry, actively participated in the consultative process of the formulation of the new regulation by the Government where inputs from all stakeholders were considered before the introduction of the CHR.

Post implementation of the new regulations, Sri Lanka’s apparel exports are likely to get a boost, and may rise by around 20-25 percent over the next few years, according to industry analysts.

In 2012, Sri Lanka exported US$ 4 billion worth of textiles and apparel, with around 90 percent of it destined to the US and the EU.

Third global Potash power switches Lanka’s agro-automotive ignition!

Asian Tribune - 08/08/2013

Rishad Baathiudeen (Minister of Industry and Commerce-second from right) greets the visiting Vitaly Prima (New Delhi based Ambassador of Belarus to Sri Lanka-left) during bilateral trade discussions on 06 August at the Ministry of Industry and Commerce, Colombo.

Belarus, world’s third largest potash power and an industry driven economy with a GDP equal to Sri Lanka, is bullish on Sri Lanka’s trade, B2B and more importantly, in its industries. And Belarus is gearing towards partnering in the kick-start of Sri Lanka’s crucial agro-automotive industry.

“46% of our GDP is industries! We have carefully studied about Sri Lanka’s economic and industrial zones and please tell us more about your 26 industrial zones that aroused our interest!” declared an eager (HE) Vitaly Prima (the New Delhi based Ambassador of Belarus to Sri Lanka) on 06 August in Colombo.

Prima, who is currently leading a 14 member trade and business delegation to Sri Lanka, was addressing Rishad Bathiudeen (Minister of Industry and Commerce of Sri Lanka) at Minister Bathiudeen’s Industry and Commerce Ministry on 06 August during his delegation’s meeting with Minister Bathiudeen.

Also present with Minister Bathiudeen were Anura Siriwardena (Secretary, Ministry of Industry and Commerce), PD Fernando (Director General, Department of Commerce), Bandula Egodage (Chairman, EDB), Sujata Weerakoone (Director General, EDB) and top officials of the Department of Commerce, among others. The 14 member Belarus trade and business delegation, is the first such high level team here in recent times. Among the Belarus team are representatives of Belarus’ famous OJSC Minsk Automobile Plant ($ 8.5 Mn annual gross revenue) which is known for its heavy duty agro-sector vehicles among others, sells in 50 countries, and reportedly has vehicle production joint ventures in Europe and even Latin America. Also among the reps were from the Belarus higher education sector (University). According to the Department of Commerce, Bilateral trade between both countries stood at $ 15 Mn in 2012 and bilateral trade volumes between Sri Lanka and Belarus show an increasing trend.

Sri Lanka’s main export item to Belarus has been tea (90% of its total exports to Belarus in 2012). Other export items are new pneumatic tyres, used pneumatic tyres, articles for packing of goods. Fertilizers (Potassium Chloride) has been the major import item from Belarus contributing to 99% of total imports in from Belarus in 2012. Belarus is the world’s third largest potash supplier after Canada and Brazil, and also leads the Commonwealth of the Independent States (CIS) starting from January 2013. Belarus, whose GDP is around $ 58 Bn, packs the potential of a viable gateway to the surging Russian and Central Asian markets.

Prima was responding to the invitation by an upbeat Minister Bathiudeen to Belarus delegation, to partner in Sri Lanka’s surging industry and agriculture sectors when (HE) Prima declared Belarus’ keenness on entering Lanka’s industries.

“Sri Lanka has very attractive conditions for investment. 46% of our GDP is industries! We have carefully studied about Sri Lanka’s economic and industrial zones, and please tell us more about your 23 industrial zones that aroused our interest. We want your presentations and materials on your industrial zones!” ” said Prima and added: “We are keenly on establishing vehicle assembly lines here. Among our strong sectors of assembly are agro-automotives such as tractors, and other heavy duty automobiles. For example, our OJSC Minsk Automobile Plant produces 70000 tractors per year of 350 horsepower (each). We like to start assembling such ago-automotives in in Sri Lanka for the Asian markets. If there are any Lankan firms willing to partner with Belarus automotive sector and start here, we are open to them. As for your mineral sands, graphite and other rare earth mining, we are really interested in them too and we can offer you the latest extraction technologies developed by our many institutions specialising in such. Our extraction institutions have necessary design and delivery capacities and are already working with many other countries, at international level. Also, we are not only ready to partner with your private sector but also with your state sector industrial and technology firms. In fact, more than 300 top Belarus companies are state operated and they function under our Industry Ministry! We already met with the Lanka EDB on 05 August and during the meeting, many Sri Lankan representatives expressed their keenness to export and import with Belarus.”

“We are happy to share the opportunities for progress with Belarus” said Minister Bathiudeen addressing Prima. “We invite Belarus to partner in Sri Lanka’s industrial and agro-tech development as well as B2B cooperation. About 13% of our GDP is agro based and the main import from Belarus, Potassium Chloride, is used for our fertilisers. There are also investment opportunities for Belarus in our industries. 26 Industrial Zones are already operating in Sri Lanka under the Ministry of Industry and Commerce where Belarus industries can explore investment opportunities.

Also, Belarus industries has scope in our automotive, mineral sands, graphite and rare earth mining in which we invite you to invest, specially for value addition. If you commence agro-automotive assembly here, you can make use of the powerful Indo-Lanka Free Trade Agreement as well as the Pakistan-Lanka Free Trade Agreement to access to promising South Asian agro-vehicle markets! I am pleased to day that we are also planning to send high level trade and B2B delegations to Belarus in the due course so that we can strengthen the on-going cooperation between both countries” said Minister Bathiudeen.

Committee to boost trade, investment with France

Lanka Business Today - 06-08/2013

The Sri Lanka – France Business Council (SLFBC) which functions under the aegis of the Ceylon Chamber of Commerce held its 9th Annual General Meeting at the Ceylon Chamber of Commerce recently. The Council was inaugurated on February 4, 2004 with a primary objective of promoting trade, investment, tourism and services between Sri Lanka and France and to promote mutual understanding and strengthen the relationships between Sri Lanka and France.

Christine Robichon, Ambassador of France and Patron of SLFBC graced the occasion as the chief guest.  Congratulating the newly appointed Committee she underlined that activities such as visit to France early this year demonstrated the usefulness of exchanging business delegations both ways. It was also mentioned that the partnership between the Embassy and Business Council went deeper with the successfully organised Symposium on Urban Development recently and the Embassy will continue to closely work with the Council in the future.


Dilipan Tyagarajah, President, Alstom was re-elected as the President of SLFBC for the Year 2013-2014.  Addressing the members, Tyagarajah highlighted some of the significant activities undertaken by the Council which includes; the discussion on “Trade Policy of the EU – The Main Export Market of Sri Lanka” which was held in October 2012, Trade & Investment Promotion Mission to France and Belgium in February 2013 which was a joint collaboration of SLFBC and ECCSL, Meeting with the newly appointed Ambassador to France, Prof. Karunaratne Hangawatte in April 2013 and the successfully concluded Symposium on French Expertise in Urban Development in July 2013 which was organised in association with the Economic Service of the Embassy of France.

Mr. Tyagarajah ensured that the Council would continue to closely work with the Economic Service of the Embassy of France, Embassy of Sri Lanka in Paris, Board of Investments of Sri Lanka and Export Development Board in order to facilitate the promotion of bi-lateral trade relationship between Sri Lanka and France.

The two Vice Presidents elected Asanka Ratnayake, Director, Hayleys PLC and Senaka Amerasinghe, Managing Director, Carmart Ltd.

The Committee members for the Year 2013-2014 include Samantha Rajapaksa, Managing Director, Associated Motorways (Pvt) Ltd., Shano Sabar, Director, CMA-CGM Lanka (Pvt) Ltd., Navindra Abeysekera, Director, Delmege Forsyth & Co. Ltd., Anurag Kak, Managing Director, Lafarge Mahaweli Cement (Pvt) Ltd., Shiraz Karunaratne, Chief Executive Officer, Noyon Lanka (Pvt) Ltd., Denis Gruhier, General Manager, Cinnamon Lakeside Hotel.

Past President - Nirmali Samaratunga, Chairperson and Joint Managing Director, Mackwoods Ltd., Jean-Louis POLI, Economic Counsellor of the French Trade Commission, Nilupul De Silva, Director Promotions, Board of Investment, Jeevani Siriwardena, Director – Market Development, Sri Lanka Export Development Board, Mahesh Amalean, Chairman, MAS Holdings Ltd. would also serve the Committee by Invitation.

June exports record commendable growth

Sunday Observer - 04/08/2013

By Sanjeevi Jayasuriya

The country’s exports earnings for June recorded commendable growth. However, it is necessary to have the right balance between commodity and cost.

According to provisional Customs data, Sri Lanka is heading in the right direction despite challenges. Exports to our key markets the USA and EU, especially to USA have shown a satisfactory increase in June 2013, Sri Lanka Export Development Board (EDB) Chairman and Chief Executive, Bandula Egodage told Sunday Observer Business. The problems in our key markets indicate that we should focus on diversifying our markets to other regions. The Asian region comprising China and India has registered substantial economic growth, he said. 

“Accordingly, we are concentrating on diversifying our markets in these regions. The potential is high in the other member countries in the BRICS group. This will be done while sustaining our market share in existing markets,” Egodage said.

“We need to create a triple win situation benefiting the export community, the country and the facilitator. The export sector of Sri Lanka after showing strong growth in 2010 and 2011 experienced a setback in 2012. The turmoil in key markets lead to a drop in demand not only for our exports but also exports of other developing and emerging economies,” he said.

“We strongly believe that private-public partnership is essential for growth and development of the export sector. This partnership is important not only to formulate successful export development strategies but also in implementing it,” Egodage said. “We have already carried out promotional programs in India and China with many in the pipeline for better penetration. The strategic plan prepared by the EDB in consultation with the Advisory Committees has been updated to cover the period 2012 to 2016,” he said.

It contains several programs aimed at developing and adopting products and services to meet international market requirements, assisting exporters to identify new markets, facilitate supply chain efficiencies and promoting export-oriented SMEs, he said.

The EDB is also focusing on branding as a strategy to increase the popularity of our products and enhance export earnings. The government’s vision is to transform Sri Lanka into a strategically important economic centre.