‘FTA the biggest leap since ‘52 Rubber Rice pact’- Jianhua, China’s powerful int’l trade Minister

Asian Tribune - 19/10/2013

Rishad Bathiudeen (Minister of Industry and Commerce of Sri Lanka) and Yu Jianhua, the powerful Deputy International Trade Representative of the Ministry of Commerce of China view Minister Jianhua’s gift to Minister Bathiudeen (silk painting of the Forbidden City) on 17 October in Colombo.

The forthcoming China-Sri Lanka FTA is the biggest development in Sino-Lanka cooperation history since the 1952 Rubber-Rice Pact. And China is keen to see the groundwork on this FTA completed by December this year.

“My mission is to start the China-Sri Lanka FTA process. The forthcoming FTA is the biggest development in China-Sri Lanka bilateral cooperation since the historic 1952 Rubber Rice Pact between the two countries. We expect that the preparatory process of the forthcoming FTA to be completed by December this year. Then we can go to the next stage in 2014, ” said a confident Yu Jianhua, the powerful Deputy International Trade Representative of the Ministry of Commerce of China on 17 October in Colombo.

Jianhua was addressing Rishad Bathiudeen (Minister of Industry and Commerce of Sri Lanka) during his present on the occasion with Minister Bathiudeen were Anura Siriwardena (Secretary, Ministry of Industry and Commerce) and officials of the Department of Commerce.

Jianhua’s powerful portfolio covers the Chinese Department of International Trade & Economic Affairs, the Department of WTO Affairs (China WTO Notification and Inquiry Center), the Department of Asian Affairs, China International Center for Economic and Technical Exchanges, China Association of International Trade, and China Society for World Trade Organization Studies.

According to the Department of Commerce of Sri Lanka, the total trade turnover between Sri Lanka and China which stood at US $ 658.94 Mn in 2005 has increased by a massive 306% to $ 2676.13 Mn by 2012.

In the corresponding period, exports to China increased by 286% to $108 Mn. This is an achievement considering the fact that of the 50 Asian Countries only 8 -including Sri Lanka - were able to maintain a positive Export growth to China since 2008.

Latest statistics show that China has also entered the first 25 export destinations for Sri Lankan products.

“Sri Lanka is a priority country for my MOFCOM (China Ministry of Commerce). The FTA will not only upgrade trade levels between Sri Lanka and China but will also enhance trade skills of both countries as well. We will work diligently in our joint efforts. Before coming to Sri Lanka I looked at our trade with Sri Lanka very carefully in aspects such as tariffs, market access in China, diversifying of Sri Lanka’s exports, and overall enhancement of Sri Lanka’s export potentials to China. The FTA is not only for the sake of trade but something beyond-to materialize and institutionalize our strategic cooperation partnership as mandated by leaders of both countries. We are also encouraging Chinese firms to come and involve in Sri Lanka’s economic development. And my MOFCOM is thankful to Sri Lanka’s Ministry of Industry and Commerce for its ongoing support. I am also honoured to Chair this morning’s meeting with your Treasury which was a successful meeting with frank and friendly exchanges” Jianhua said.

Minister Bathiudeen, responding to Minister Jianhua, said: “This FTA is the most promising development in China-Sri Lanka trade relations, thanks to the initiative of the President Mahinda Rajapaksa. It will be stepping stone in our ongoing trade with China and we are very hopeful that with the implementation of the FTA, our trade with China will grow to a significant level. I am also pleased to hear that your meetings with Treasury have resulted in successful outcomes which are good news for our export and business communities. I invite Chinese investors for Joint Venture partnerships in textiles, mineral sands, graphite and mining as well as tourism sectors and access the huge South Asian market using our FTAs with India and Pakistan where more than 8000 export product lines are open for them upon 30% or more value addition.”

Secretary Siriwardena, apprising Minister Jianhua, said: “Our Treasury has also given the go-ahead for our FTA technical team on the FTA Tech teams of both sides has identified aspects and sectors of cooperation.”

During the in-depth discussions on 17 October noon, both Ministers also focused on such additional aspects of cooperation as Lankan rural sector /SME development and tourism with Chinese assistance.

EDB promotes design driven exports to key global buyers and retailers at SLDF 2013

Daily Mirror - 14/10/2013

The Sri Lanka Design Festival (SLDF) 2013, backed by local industries and the Sri Lankan Government, kicked off yesterday. The main objective of the festival, which is to promote design driven exports, is supported by Sri Lanka’s apex institute for driving exports, the Sri Lanka Export Development Board (EDB).
Together with EDB, SLDF 2013 is held under the theme of South Asia’s Creative Hub, encompassing Sri Lanka moving towards the regional hub status in design. Under this, SLDF will join hands with the EDB to highlight and draw international attention to the major export industries like fashion/apparel manufacturing as well as emerging sectors like contemporary craft.

EDB Chairman and Chief Executive Bandula Egodage stated that the SLDF aligns closely with EDB’s mission; “The EDB is keen to promote the Sri Lankan creative export industries such as apparel and upcoming sectors including contemporary craft, design and associated industries. We find it crucial for our exports to meet the needs of the global market and also to promote their ground-breaking initiatives to the world. We’re proud to recognise our design led industries and be part of establishing Sri Lanka as the South Asia’s Creative hub with SLDF 2013.”
This national design event supported by the EDB will include many industrial forums, sustainable summits, exhibitions and fashion shows. The event will bring global retailers, buyers and sourcing specialists from Europe, North America, Japan etc. visiting as special delegates.
The sustainable fashion summit held yesterday was attended by many international delegates hosted by the EDB who became an active part of discussing sustainability issues pertaining to the South Asian region and will become global ambassadors of Sri Lanka’s leadership towards regional commitment aimed at sustainability, which results in Sri Lanka positioning itself as a hub for sustainable trade and export.
The massive apparel agenda of the festival is also supported by EDB and includes the prestigious South Asian Apparel Leadership Forum, where over 200 local and international apparel big names and decision makers will discuss the future of South Asian apparel. With Sri Lanka earning its position as the fashion and apparel hub of the South Asian region and standing strong in its commitment to sustainability, value and invention, the South Asian Apparel Leadership Forum (SAALF) will play the pivotal role in deciding the future of this industry.
The SAALF aims to synthesise the global discourse with the intent of proposing solutions to the most demanding issues faced by the industry. This makes it a unique gathering where obstacles and doubts are discussed alongside strategies, plans and answers by supply chain partners, retailers, brand owners and the services sector engaging on equal terms to find solutions for a common purpose.
The EDB will actively be involved with the event and play a key role in enhancing Sri Lanka’s design led exports while contributing to the SLDF’s mission in creating more business opportunities for local designers. In addition to EDB, the Key stakeholder of SLDF 2013 along with the Government and Sri Lanka Apparel is also supported by many others. SLDF 2013’s principal partner is MAS holdings.

SLDF was founded by AOD International Design Campus. SLDF 2013 is also supported by Coats Thread (Official Thread Partner), GT Nexus (Official Software Partner), Textured Jersey (Contributing Partner), Standard Chartered Bank (Sustainable Fashion Summit Partner), British Council (Knowledge Partner), Mount Lavinia Hotel (Official Host), Cheryl Gooneratne (Official Hair & Makeup), WGSN (International Media Partner), JustStyle, Drapers as well as the partners Goethe Institut, Vista Advertising and Sunshine Travels and tours.

Lankan biz throng to EDB ‘Reflections’ expo at CHOGM

The Island - 10/10/2013

Lankan businesses of both SME and large scales are enthusiastically enlisting for the CHOGM event of EDB. "42 exhibitor firms from ornamental and handicraft sector, 40 from gem and jewelleries, and 19 from apparel sector are among them," said Ms Sujata Weerakoone, Director General of EDB on 08 October in Colombo.

Director General Weerakoone was addressing the special briefing session held at EDB auditorium on 08 October for exhibitors of forthcoming EDBs CHOGM exposition titled "Reflections of Sri Lanka-Exploring the Wonder of Asia". More than 250 reps from 184 Lankan businesses of SME and large scales from across the country were in attendance at EDB’s briefing session.

EDBs "Reflections of Sri Lanka- Exploring the Wonder of Asia" is scheduled to be held from 13 to 17 November at Janakala Kendraya, Battaramulla.

Director General Weerakoone briefed them in detail, on facilities provided to exhibitors, their duties and responsibilities as stallholders of CHOGM EDB "Reflections of Sri Lanka-Exploring the Wonder of Asia", criteria and expected standards of professionalism, expected levels of knowledge on their own products and services, display stall details and EDB contact points for each sector.

Tea Exports Hit Rs. 123 Bn

The Sunday Leader - 06/10/2013

Tea export earnings in the first eight months of the year increased by Rs. 10.6 billion year on year (YoY) to Rs. 123.1 billion, Forbes & Walker (F&W) in a report said.

Export volumes in the review period increased by 1.7 million kilos YoY to 205.7 million kg.
Kenya, one of Sri Lanka’s competitors, in the first seven months of the year increased its export volumes by 52 million kg. YoY to 293 million kg., F&W said.

In the same period Kenya’s tea export earnings increased by Rs. 18 billion* to Rs. 109.7 billion.
Meanwhile Sri Lanka’s tea export earnings in August increased by Rs. 6.2 billion to Rs. 18.8 billion YoY.
Likewise tea export volumes increased appreciably by 9.5 million kg. YoY to 31.4 million kg.

The average tea price in the first eight months of the year increased by Rs. 47.10 to Rs. 599.45 per kg. in FOB terms, it said.

The highest price fetched was for green tea exports, which export quantity in the eight month review period comprised a mere 3.3 million kg. The average price fetched for green tea exports was Rs. 1,336.46 per kg. (FOB).

The next highest export price was for tea exports in bags. That comprised a total of 16.6 million kg. “Tea in bags” fetched an average export price of Rs. 1,070.28 per kg. FOB. It was followed by “instant tea” with a price of Rs. 999.42 per kg. (FOB) and a quantity of a mere 1.1 million kg. exported in the review period.
Those were followed by “tea in packets” and “tea in bulk” which in price terms comprised the fourth and fifth highest prices fetched for the five categories of teas exported from Sri Lanka, while in volume terms they comprised the first and second highest respectively.

“Tea in packets” fetched an average FOB export price of Rs. 549.93 a kg., while “tea in bulk” an average FOB price of Rs. 531.65 per kg. Their export volumes were: “Tea in packets” (101.7 million kg.) and “tea in bulk” (83 million kg.).

Bulk
The average price of tea in August increased by Rs. 22.83 to Rs. 598.76 per kg. in FOB terms.
“Tea in bulk”, the lowest export earner, led the pack in August with 10.1 million kg. and an average export price of Rs. 493.68 per kg. FOB. It was followed by “tea in packets” with 9.5 million kg. and a price of Rs. 524.83 per kg. FOB.

The highest value added earner was “green tea” with an average export price of Rs. 1,211.94 a kg. FOB. But its export volumes in August comprised a mere 350,321 kg. It was followed by “tea in bags” with a price of Rs. 1,134.40 per kg. FOB and an export volume of 1.9 million kg., while the third highest was “instant tea” with a price of Rs. 933.14 per kg. FOB, but with an export volume of an insignificant 28,833 kg.

Tea production, excluding CTCs in the first eight months of the year increased by 8.41 million kg. YoY to 215.1 million kg., F&W further said.

All elevations showed a YoY growth, with Low Growns showing the biggest gain, it said.
Low Grown production increased by 5.79 million kg. (4.44%) YoY to 136.3 million kg.
Meanwhile tea production in August was up by 0.71 million kg. YoY to 26.5 million kg.
While High and Medium Growns had shown a marginal decline YoY, Low Growns had shown an increase, the report said.

In related developments, CTC production in the first eight months of the year marginally declined by 0.2 million kg. YoY to 14.6 million kg., F&W said. While High and Medium Growns had shown a marginal gain, Low Growns had shown a decline, it said.

CTC production in August at 1.8 million kg. too showed a 0.3 million kg. YoY decline, the report said. August 2013 production in respect of all elevations showed a YoY decline, it added.
*On the basis that one Kenyan shilling was equivalent to Rs. 1.52 as at October 2, according to the internet.

Hub is Sri Lanka’s USP!’ – Powerful Swiss Investment Arm

Asian Tribune - 05/10/2013

Wolfgang Schanzenbach (Regional Director Asia Pacific of Switzerland Global Enterprise (SGE) meets Rishad Bathiudeen (Minister of Industry and Commerce of Sri Lanka-centre) on 03 October in Colombo.

Sri Lanka’s international Unique Selling Proposition (USP) is none other than its hub positioning. “At this moment, many countries in Latin America, Africa and Asia including Sri Lanka have great investment opportunities.

Sri Lanka will have to compete with these countries to leverage foreign investment streams from Switzerland” revealed a very confident Wolfgang Schanzenbach, Regional Director Asia Pacific of Switzerland Global Enterprise (SGE) on 03 October in Colombo.

Director Schanzenbach was addressing Rishad Bathiudeen, Minister of Industry and Commerce of Sri Lanka on 03 October during his courtesy call on Minister Bathiudeen. Also present along with Director Schanzenbach was (HE) Thomas Litscher (Ambassador of Switzerland to Sri Lanka.

According to the Department of Commerce, bilateral trade between Sri Lanka and Switzerland stood at $ 325.76 Mn in 2012. Sri Lanka`s exports to Switzerland have shown a slight growth during the past years except in 2009. Sri Lanka’s total exports to Switzerland recorded the highest level of US $ 91.75 million in 2012. Parts of electrical apparatus for switching or protecting electrical circuits has been the main item of exports (32.42% of total) followed by printed circuits (14.44%), Gold, other semi-manufactured forms (9.02%), Precious stones; gem (8.06%), Apparel (6.5%) etc.

Sri Lanka received Foreign Direct Investment (FDI) from Switzerland totalling $ 14.46 Mn in 2012.

Director Schanzenbach’s SGE brand, the powerful entity operating under the Swiss government, is Switzerland’s center of excellence for internationalisation and it is involved in exports, imports and investments (to Switzerland) and works very closely with Swiss SMEs to achieve these objectives. Director Schanzenbach, currently in Sri Lanka on a fact finding mission, will explore emerging and other investment opportunities here, for Swiss investors.

“Except for Swiss multinationals such as Nestle, Holcim etc, almost 99% of Swiss GDP is driven by the SMEs, which also is the driver of the country’s global growth. We at SGE are a strong and trusted partner for our clients, the cantons and the Swiss government, with a global network of experienced advisers and experts. Swiss government initiated investments are very limited. It is the private sector of Switzerland that is leading overseas investments, with the support of Swiss government. Representing the private sector, I am here to discover new opportunities and whether we can place Sri Lanka firmly on Swiss investors’ map. At this moment, many countries in Latin America, Africa and Asia including Sri Lanka have great investment opportunities. Sri Lanka will have to compete with these countries to leverage foreign investment streams” said SGE Director Schanzenbach. “I need to identify Sri Lanka’s USP after which I can make some initiatives so that Sri Lanka can enter Swiss investment map. But remember, you compete against many others.”

Minister Bathiudeen, addressing SGE Director Schanzenbach explained of Sri Lanka’s hub positioning and five hub concept in depth. “Our ports and services sectors are rapidly developing. Sri Lanka government’s policy is one of encouraging foreign investments. Sri Lanka’s labour force is literate and skilled with a strong professional presence. In that, they are highly trainable. These are apart from GSP entitlements we have” Minister Bathiudeen said and added. “Our hub positioning not an isolated structure but is strengthened through the strong Free Trade Agreements we have with the huge Indian Sub continental markets, Pakistan and India. For example, we can export over 4000 items to India under FTA with advantages.”

“This is a very strong point for Sri Lanka” responded SGE Director Schanzenbach, who is in charge of SGE’s Asia Pacific region, and added: “I see that Sri Lanka’s own market is very small but when looking at the hub aspect, I can clearly see that Sri Lanka is usable as an import value addition point from where we can re-export to the huge Indian Sub-Continent. That’s really an investment advantage and a USP. Definitely, Sri Lanka’s hub positioning is a great advantage in resourcing investment Dollars here!”
Minister Bathiudeen revealed: “For Swiss investors, immediately available opportunities in Sri Lanka based on hub positioning are in mineral sands such as silica and graphite as well as rubber production for which we invest eager Swiss investors.”

Also present during the session were advisers to Minister Bathiudeen and officials of NEDA, EDB and Department of Commerce operating under him.

Japanese apparel market craving for more Lankan made supplies

Daily Mirror - 01/10/2013

Apparel exports must be expanded to cater to the growing demand for Sri Lankan made products in the Japanese market, according to Japan’s House of Councillors Member Yamatani Eriko.

“Sri Lankan apparels are of high quality but unfortunately, the supply of Sri Lankan apparels to the demand of the Japanese market is not sufficient at the moment. Therefore, we request steps be taken to expand exports of Sri Lankan apparels to Japan.

Bilateral trade between Sri Lanka and Japan has a very long history and trade is one of the most important aspects of our bilateral relations. Ceylon tea and other Sri Lankan products such as apparels and ceramics are already popular in Japan,” Eriko stated.

Leading a six-member delegation from the upper House of Japan’s legislature, the National Diet, Eriko made the comments during a meeting with Industry and Commerce Minister Rishad Bathiudeen.

The Japanese apparel market is currently estimated to be as large as US $ 122 billion. Total exports of Sri Lankan apparels reached US $ 2.77 billion in 2012. However, Japan is only the 14th largest buyer of Sri Lankan apparels, accounting for less than 1 percent of export revenues.

Responding to Eriko’s comments, Bathiudeen expressed confidence in the potential for expansion of Sri Lankan apparel exports to Japan, while also welcoming Japanese investment into the Sri Lankan apparel sector.

Bathiudeen added that the potential for exploration of investment opportunities in Sri Lanka by Japanese businesses was particularly suitable in the backdrop of Sri Lanka hosting the Commonwealth Heads of Government Meeting (CHOGAM) in November this year.

Also participating in the discussions were Japanese Ambassador to Sri Lanka Nobuhito Hobo, Export Development Board Director General Sujata Weerakoone, Industry and Commerce Ministry Advisor Himali Jinadasa, Acting Director General of Commerce R.D.S. Kumararatne and Deputy Director of Commerce D.W. Jinadasa.

Total trade between Sri Lankan and Japan crossed US $ 770.11 million in 2012 as compared with US $ 493 million in 2002. The trade balance is skewed in favour of Japan largely due to motor vehicle imports.

Govt: Lanka companies bullish at EDB’s first ever China-Lanka direct B2B

The Island - 29/09/2013

"Eager Sri Lankan biz has experienced a sudden boost and witnessed new doors of opportunities on 26 September with a surge of inquiries from the powerful Chinese businesses now scouring Sri Lanka," the Ministry of Industry and Commerce said in a statement.

On 26 September, one hundred (100) Lankan firms of small, medium and large scales met reps from 23 powerful Chinese firms that arrived in Sri Lanka on 25 September as part of the Chinese Trade Promotion delegation to Colombo.

This is the largest Chinese private sector delegation to visit Sri Lanka. The Chinese delegation is led by Jia Guoyong, the Vice Director General of Chinese Trade Development Bureau (TDB). This is one of the strongest such Chinese delegations to arrive in recent Lankan trade history. The 36 member strong Chinese delegation consists of unprecedented Chinese private sector representation with 23 companies taking part in glass manufacture, mining/minerals, agriculture, polymer/petroleum bi-products, chemicals, and real estate. Three of the firms are in Fortune 500 list- Sinochem Group ($49.5 Bn revenue), China Minmetals ($ 37.5Bn) and Sinosteel ($27.2Bn). Among other visiting firms are Anhui Light Industries International Co., Ltd. (ALIC), Zibo Top Arts, Zibo Honghan Trading, Shandong Hanbang Household Glassware, Zibo Unishine, XinHe Commerce and trade Refco Group, Hebel Kaifa Glassware, AVIC International Holding, CITIC International, Chinatex, China National Township, Sinosteel Raw Materials, Sinochem Guangdong, and Sinochem Plastics.

During the four hour long Sri Lanka-China Business Meeting –the B2B matchmaking sessions facilitated by EDB- held at Cinnamon Lake Hotel on 26 September, the 23 Chinese firms met 100 Lankan firms for potential partnership on diverse sectors of interest.

Among the potential partnership avenues discussed were overall trading (both import/export), importing from Sri Lanka, exporting to Sri Lanka and business joint ventures.

EDB, on 27 September, said that the majority of Sri Lankan businesses that took part in the EDB facilitated B2B session, reporting ‘it was a very effective session’ with many potential partnership leads being generated for them.

Among the business sectors at play at the B2B session were chemicals, petroleum and fuel refining, activated carbon, metals (including non-ferrous), agriculture, financials, rubber and rubber products, plastics, activated carbon, glass and real estate.

On the eve of 26 September after the B2B sessions were over, many reps from the Chinese business side confirmed successes with eager Lankan firms, but insisted that it is premature for them to reveal the identities or Lankan partnership details since ‘they have to process paperwork back home on nature of partnerships and determine exact Lankan (product) HS codes first.’

"We had very good, very successful meetings today. We also identified one Lankan partner firm for trading in Activated Carbon" said Anqi Fu, the Business Manager of CITIC International (Fortune 500 ‘CITIC Group’ s annual revenue at $ 43 Bn, subsidy CITIC International annual revenue at $ 500 Mn). "The next step is to identify the exact product categories. We will start buying through the Lankan partner firm as soon as possible once the agreements finalised. We are also thinking of increasing purchase volumes in future but in step by step process" Qi Fu added.

"We had discussions with no less than 45 Lankan companies today" said a somewhat exhausted Ms Wang Zhi Jie (Assistant Manager-Strategic Planning) of Beijing’s SINOCHEM Group (Fortune 500 firm, with $49.5 Bn revenue). "There was a strong demand from many Lankan firms to partner with us. We are focusing on chemical products and fuel refining. We listed several Lankan firms for partnership possibilities demanding refining services from us. We have an annual refining capacity of 1200 tonnes. We also have positive negotiation outcome for partnership with one Lankan rubber supplier for SINOCHEM’s rubber plant in China. We are ready to start buying as soon as Sri Lankan firm’s quotation is approved by our SINOCHEM offices. We are also looking for both import as well as export trading" added Ms Jie.

Han Ven Han (Manager Operations -Beijing’s SINOSTEEL Metals) said: "We had many rounds of discussions with seven Lankan firms. And our cooperation prospects are looking good. We are looking for mineral sourcing from Sri Lanka as well as partnering in logistics and services. Within logistics, we are looking specifically for transport, warehousing and in the general value chain of logistics. We are still at fact finding stage and in discussion with the seven companies and we will make our decision back home based on what we learn here. We will also look into the possibility of investing in Sri Lanka on logistics. Sri Lanka’s geographic and marine location is very strategic for logistics, which is the reason we are interested. We also want to source metals from Sri Lanka."

Gua Honghai [Administrative Officer of China Minmetals Non-Ferrous Metals Co Ltd, one of 800 subsidy firms of Fortune 500 ranked China Minmetals which has $ 37.5Bn revenue)], is keenly scouring for non-ferrous metal supplies from Sri Lanka-in large volumes. "We are looking to buy non-ferrous metals in large quantities. We are in need of 100,000 tonnes of copper, 100,000 tonnes of zinc and 400,000 tonnes of aluminium annually" said Honghai, and revealed: "But today, I could not locate any Sri Lankan suppliers who can give me these volumes even after speaking to ten companies. We are realising that Sri Lanka has no non-ferrous resources that we can make use of. But that is not the only option we have for Sri Lanka-there are still other avenues of business for us here, specially in logistics which we are now looking at. I also think Sri Lanka should learn from Singapore as to how to use your very distinct, strategic geographic location advantage to make it a maritime transport hub."