Trade talks for first TA with surging ‘Nam on the cards

Asian Tribune - 08/08/2014

As YoY bilateral trade jumped by a huge 88%, possibility of a first ever official trade agreement with one of the most discerning Asian suppliers to Sri Lanka has edged closer to reality on 07 August. “Our record exports today at $130 Bn was strongly supported by the seven FTAs that we entered into. An FTA with Sri Lanka can boost bilateral trade specially for Sri Lankan exporters. We should consider at least a Preferential Trade Agreement (PTA)” said an upbeat (HE) Ton Sinh Thanh (the outgoing Ambassador Plenipotentiary & Extraordinary of Viet Nam to Sri Lanka) on 07 June in Colombo.

Ambassador Thanh was addressing Rishad Bathiudeen (Minister of industry and Commerce of Sri Lanka) on 07 August in Colombo during his farewell courtesy call on Minister Bathiudeen. Ambassador Thanh, who served a successful three year stint in Colombo is scheduled for New Delhi next. Joining Minister Bathiudeen on 07 August were RDS Kumararatne (DG-Department of Commerce) and Bandula Egodage (Chairman/CEO-EDB).

Ton Sinh Thanh (the outgoing Ambassador Plenipotentiary & Extraordinary of Viet Nam to Sri Lanka- left) in discussions with Rishad Bathiudeen (Minister of Industry and Commerce of Sri Lanka-right) on 07 August in Colombo.

“Seen from our end, bilateral trade in 2014 first half (1H) already is at $ 109 Mn and therefore end of this year, we can expect a very strong bilateral trade performance. Also, 2014 1H Sri Lanka exports to Vietnam already equalled 2103 full year exports and therefore, this will be a record year for Lankan exports to Viet Nam” said Ambassador Thanh, and added: “We have been expecting this trend for a long time and now we see it at last! Vietnam wants more of Sri Lanka’s black tea, gems and leisure boats while we also want to send more of our products here. This is the reason we set up the Sri Lanka –Vietnam Business Centre here. Since there is almost no information in Vietnam on Sri Lanka products, it’s time you too set up a similar Centre in Vietnam to promote your exports to our country, which will no doubt be very useful to businesses at both sides. Our record exports today at $130 Bn was strongly supported by the seven FTAs that we entered into. An FTA with Sri Lanka can boost bilateral trade specially for Sri Lankan exporters. We should consider at least a Preferential Trade Agreement (PTA). Your tariff for incoming Vietnamese products are still high but under a trade agreement, tariff on your products at our end too could be adjusted. Sri Lanka’s ITC/BPO as well as rubber products too are lines that you can try in Vietnam. The issue with Sri Lanka’s exports in not marketing but production capacities and you need to increase investments and identify products with advantage for you in this regard. Looking through our own experience, I observe that Sri Lanka, with its diverse fisheries, is lagging in its export of seafood and fisheries and I see very vast potentials in it for you. Vietnamese drink green tea but our youth market is turning to black tea and Sri Lankan black tea is now in demand and our youth love it-specially flavoured teas. It is time that more than one Lankan tea brand enters Vietnam. In the forthcoming Sri Lanka – Vietnam trade talks in Viet Nam on 21 August, Sri Lanka can impress on Viet Nam of the FTA’s importance for trade, while focusing on setting up sub committees on trade and amidst discussions on PTA. I also strongly suggest you to make proposals to Viet Nam to set up exclusive Sri Lankan export promotion zone in Viet Nam to be operated by Lankan manufacturers similar to the ‘Vietnam-Singapore Industrial Park.’

“We congratulate Your Excellency’s new appointment to yet another important trade partner of Sri Lanka, wish you great success in your new assignment and thank you for your strong contribution in enhancing our bilateral cooperation during your stay here’ said Minister Bathiudeen responding to Ambassador Thanh, and added: “According to the Department of Commerce of Sri Lanka, total Lanka – Vietnam trade in 2013 rose to $ 224.39 Mn, a surge of 88% from 2012’s $119 M. This was supported by increased exports of aeroplanes, footwear, pepper, and seafood (fresh and frozen). Total exports to Vietnam alone rose by a huge 107% in 2013 to $ 43 M from 2012’s $21 Mn. These promising trends enable us towards the need for more formal trade ties such as Trade Agreements so that mutual benefits could be greatly enhanced. We too look forward to productive discussions during our Vietnam trade talks starting on 21 August and we are positive of expectations. I also invite Vietnamese investors to Sri Lanka. As for development of fisheries exports, we too understand that it is underutilised and we shall be making an integrated effort involving our fisheries sectors. We will discuss with our manufacturers on creating a Lankan Free Trade Zone in Vietnam.”

Responding to Minister Bathiudeen, Ambassador Thanh said: “Vietnamese investors now have entered into global investments such as oil and gas projects (in Venezuela), as well as telecoms, hotels in many other countries. These are the sectors of interest for them at this moment.”

Responding to Ambassador Thanh, Minister Bathiudeen said: “We welcome Vietnamese investors to our tourism infrastructure, rubber production, boat building, urban development and in infrastructure construction. One hundred percent of participation-ownership-is allowed by our government for the foreign investor on their valuable investments especially when they enter priority sectors such as tourism development. Foreign investments are given constitutional guarantees of safety with 100% profit repatriation.”

Both Minister Bathiudeen and Ambassador Thanh also discussed of the progress of other areas of bilateral cooperation on 07 August.

“FACETS Sri Lanka” To Sparkle For The 24th Year

FACETS Sri Lanka 2014, the prestigious International Gem and Jewellery Show that showcases hundreds of local and foreign exhibitors, will be held from 4th - 7th September at the Sirimavo Bandaranaike Memorial Exhibition Centre.

This year’s exhibition will comprise over 150 booths with a variety of Gem and Jewellery that include precious and semiprecious gems.


Organized by the Sri Lanka Gem and Jewellery Association (SLGJA), FACETS Sri Lanka enables all Gem & Jewellery Traders to display market collections and also help create awareness about the importance of the Gem and Jewellery industry in Sri Lanka. Additionally, the event will consist a seminar on “Gem and Jewellery in Sri Lanka” conducted by an expert panel of local and International panelists.

FACETS Sri Lanka 2014 encompasses individual exhibitor pavilions from Myanmar, The National Gem and Jewellery Authority (NGJA) and an SME pavilion from the Sri Lanka Export Development Board (EDB). In addition, buyer delegations from USA, China, Russia and India will also be arriving. Stall holders from Singapore, Dubai, Myanmar and India will be participating at the event.

Speaking about the event, Juzar Adamaly, Chairman of FACETS Sri Lanka 2014 stated, “Over the past 23 years, this exhibition has steadily grown to become a world-renowned show with active participation by Gem & Jewellery importers, wholesalers, manufacturers, retailers and collectors worldwide.” He added that buyers looked forward to purchasing some of the world’s finest gems and jewellery directly from the source at this event. “This year we are expecting a record number of exhibitors and visitors as well,” Adamaly added. “With the industry looking at reaching US$ 1 Billion by the year 2015, this exhibition will continue to boost local sales and improve the brand of Sri Lankan Gem and Jewellery globally,” he further stated.

Established in 1984 as the Sri Lanka Gem Traders Association, and changed its name to Sri Lanka Gem & Jewellery Association in 2002, the Sri Lanka Gem and Jewellery Association (SLGJA) is the apex private sector organisation representing the interests of all industry sub-sectors from mining to manufacturing, wholesale and retail. SLGJA was amalgamated with three of the industry's top trade associations: Sri Lanka Jewellery Manufacturing Exporters Association, Sri Lanka Lapidarists and Exporters Association and Sri Lanka Jewellers and Gem Merchants Federation.

In the 2003 Budget, the Government of Sri Lanka declared 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 & 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 jewellery exports.

SL, Vietnam two way trade grown by 100 percent

Daily News - 07/08/2014
By Rasika Somarathna

Relations between Vietnam and Sri Lanka are fast developing, and two way trade between the countries has grown by nearly 100 per cent during the last three years, Vietnamese Ambassador to Colombo Ton Sinh Thanh said.

He added, the two-way trade over the past three years has been increasing by around 30 per cent per year, the highest rate among Vietnam trade with other South Asian countries. He made thise revelation at the opening of the first ever Sri Lanka Vietnam business centre in Kelaniya, a venture promoted by the APL Group of Companies. Ambassador Thanh identified the new centre as an important landmark in the economic relations between the two countries. Highlighting the rapid growth of economic relations between the two countries the Ambassador said ; "in the first half of this year our bilateral trade volume reached US $109 million, almost equal to the volume of the whole year 2011. The Ambassador predicted that the total trade volume between the two countries this year will surpass US $200 million.

Sri Lankan exports to Vietnam too had grown considerably to reach US $43 million in the first half of this year, more than total exports from Sri Lanka to Vietnam last year.

"In line the product lines traded between the two countries have also been expanding. In 2012 there were only 39 product lines and in 2013 the number increased to 76," he added.

While suggesting there was ample scope for more improvement Ambassador Thanh noted that a Preferential trading agreement or free trade agreement and exchange of trade delegations and participation in trade fairs between the two countries would further elevate the economic cooperation.

He also commended Aruna Lekamge, Chairman of the APL group for promoting the venture tirelessly until it became a reality.

Central Bank Governor Ajith Nivard Cabraal who participated as the chief guest noted that it was important for Asian countries to build closer trade links as Asia was slated to take over the driving seat of the world economy in the next few years, Quoting a ADB research he said in the first 1,800 years since the beginning of ADB, Asia was the leader of the world economy. Only in the last 200 years the West has surpassed Asia. According to ADB Asia's contribution to world economy by 2030 will exceed 50 per cent, putting it in the driving seat once again.

Sri Lanka Bureau of Foreign Employment Chairman Amal Senalankadikara also spoke.

Kumarasiri Hettige, Secretary Parliamentary Affairs to the President, Members of the business community, staff of the Vietnamese embassy and APL group were present.

IT/BPM export projections at $850 mln for 2014 – report

The Sunday Times - 03/08/2014

• IT workforce to reach 82,850 by end 2014
•  IT exports set at $850 million by end 2014; 2022 target – $5 billion
•  63 per cent of the workforce has graduate or post-graduate level qualifications. Bachelor’s    degree standard entry level qualification for recruitment in many job categories
•  Approx. 2.5 million square feet of Grade A leasable office space currently being offered as  commercial office space
•  Additional 765,000 square feet of office space under construction; ready by end 2015
• 6 million square feet of office space in the construction pipeline
•  IT park being built on 17 acres of land at Katunayake

Local IT and business process management (BPM) exports have grown “significantly” from US$213 million in 2007 to an estimated $720 million in 2013 and a projected $850 million in 2014; according to the recently issued “Sri Lankan IT-BPM Industry Review 2014″ report, which was commissioned by private sector body SLASSCOM, and prepared by PriceWaterhouseCoopers Sri Lanka.
Further, the report also added that “(total) employment grew from 33,700 in 2007 to an estimated 75,100 employees in 2013, and the number of companies in the industry grew from 170 in 2007 to over 220 in 2013″. At the same time, the report also projects employment for 2014 as reaching 82,850.

Introducing the sector, the report signalled, “Sri Lanka’s competitive advantage in IT/BPM is built around agility, cost, a niche talent base, ethics, cultural adoptability and superior quality of life as a destination for doing business… Our focus is to drive on two fronts for the next wave of growth. On the BPM front, we continue to build on finance and accounting as our primary global niche. On the IT front, our competitive position on product engineering is now becoming a formidable advantage with many global and local companies building or outsourcing product engineering work in Sri Lanka”.

Offering up a global view of the IT-BPM sector, the report sourced SLASSCOM’s Indian counterpart NASSCOM, to reveal, “(with) improved economic conditions, global demand for IT-BPM software and services has been on the rise at $1.2 trillion in 2013 , a 4.5 per cent growth over 2012. This increase is reflected across all segments when compared with 2012… Of the total spend, the total outsourced component is $140 billion (a growth of 8 per cent over the previous year) with IT accounting for 13 per cent and BPM 33 per cent”.

Elaborating further, the report indicated that, (in) 2013 , the global Finance and Accounting Outsourcing sub-sector grew at the second fastest pace at 6.9 per cent over the previous year, an increase from $12.5 to 13.5 billion… In terms of the growth outlook, the global BPM market alone, a critical sector for Sri Lanka, is expected to touch $209 billion by 2017, (expected CAGR over 2012-17 at 5.7 per cent). Traditionally, verticals such as BFSI, Manufacturing, Communication and Media held around 50 per cent of the market share. However, emerging verticals such as Healthcare and Retail are expected to grow 1.5 times faster than the more mature traditional verticals owing to changing landscape in regulations and adoption of newer services”.

Drilling down once again to the local context, the report was of the opinion that “Sri Lanka is a highly cost competitive destination and was ranked as 6th in terms of financial attractiveness by AT Kearney’s Global Service Location Index in 2011… In spite of Sri Lanka’s well-educated labour force, the average wages in Sri Lanka at around $1,500 per year are in the same range as Bangladesh ($1,400), the Philippines ($1,500) and India ($1,600)… The average Associate cost can be as much as 30 per cent lower than other offshore destinations, especially for BPM roles. The country’s investment laws permit total foreign ownership with no restriction on repatriation of profits”. It also noted “(nearly) 50 per cent of the students who have finished their higher education are trained in technical and business disciplines. English is widely spoken in urban cities and is commonly used for education, business and commercial purposes.Having cultivated distinctive capabilities in technical and professional services in particular, Sri Lanka boasts more people with UK-recognised accounting qualifications than any country outside the UK. With similar emphasis on other professional qualifications (medicine, law, engineering, architecture, etc.), the country has the potential to develop distinctive remote service offerings in these areas. Other niche capabilities include open source, cloud apps and mobile technologies… Sri Lanka’s IT/BPM industry attrition levels are consistently below 20 per cent and low compared to most other Asian destinations… Country’s size advantage also offers a unique opportunity for SMEs to enjoy a premium access to this high quality talent pool as well”.
Going back to revenues, the report also opined that, “(with) estimated revenue of $720 million for 2013, the sector is showing an impressive growth trend – 238 per cent growth since 2007 of the total revenue, IT claimed 77.5 per cent of the total and BPM accounted for 22.5 per cent… According to the ICT export survey 2010, large companies contributed to over 70 per cent of the export earnings whilst medium- and small-scale companies contributed the balance. In the BPM sector, over 90 per cent of the contribution was by the larger players… The top three markets have been Europe (UK and Ireland), US and South Asia. Moreover, the Asia-Pacific region has shown faster growth than mature markets whilst the industry makes significant market presence in Australia / New Zealand, Asia Mature Markets and the Middle East”.

Commenting once again on the IT/BPM sector workforce, the report reiterated that the “overall workforce has grown to 75,107 in 2013 with a projection of 82,850 for 2014″, also further revealing that only 40.8 per cent of IT personnel worked at ICT companies, while 47.1 per cent were employed at non-ICT private sector jobs with 7.8 per cent at government organisations and just 4.2 per cent at BPM companies, according to data sourced from the National ICT Workforce Survey 2013.

However, it also added “female participation of the workforce has improved from 21 per cent in 2009 to 29 per cent in 2013. BPM companies have significantly contributed to improve the gender balance in the ICT workforce”. It also emerged that, in 2013, “63 per cent of the workforce held graduate or post-graduate level qualifications. Bachelor’s degree has become the standard entry level qualification for recruitment in many job categories”.

On the other hand, it also forecast demand for a number of graduates in 2014 to be 6,246, a projection it said was “based on the required number of recruits given by respondents in the sample for the year 2014″, breaking this number down even further by stating 2,595 would be required for ICT companies, 2,404 for non-ICT private sector jobs, 755 for government organisations and 492 for BPM companies. Additionally, it once again sourced the National ICT Workforce Survey 2013, showcasing the survey’s observation that the “(total) number of graduates supplied from training organisations steadily increased annually. The total projected for 2014 is 7,010″.
In terms of the IT/BPM sector’s future outlook, the report also once again highlighted the oft-repeated SLASSCOM goal of “$5 billion in exports by 2022 while generating 200,000 jobs and creating 1,000 start-ups in this process. The country’s overall strategic vision is backed by its focused approach to differentiation and target markets with planned initiatives for skills development and talent management. The industry’s e-development agenda supports this strategy by building an innovative and continuous collaborative environment conducive for growth”.

However, it also elaborated on the abovementioned goal by signalling that 2013′s estimated $720 million for IT/BPM export revenues, broken down into $558 million for IT and $162 million for BPM, needed to grow, ideally, to $3.08 billion and $1.92 billion, respectively, to reach the sector’s 2022 target of $5 billion.

Further, the report also opined that, “(outside) of the Fortune 500 companies, a massive opportunity lies in the huge untapped markets of SMEs, public sector and family run entities which will require a different and more innovative service model. With cloud solutions becoming increasingly more stable and cheaper, opportunity exists to leap frog into next generation services such as demand based and online big data services”. Going into greater depth, it also gave its priorities as follows, “SMEs, Indian Ocean region (including Asia Pacific especially Japan, Middle East, Africa), markets with cultural/professional links to Sri Lanka (UK, Australia, New Zealand, Canada, etc.)”.

In conclusion, the report also observed “Colombo is on fast track to be transformed into one of the most developed cities in Asia. Entire neighbourhoods are being transformed with high-rise real estate space with modern design and technology for mixed use and entertainment purposes offering convenient, central and luxurious living and workspace… Within this space, approximately 2.5 million square feet of Grade A leasable office space is currently being offered as commercial office space while an additional 765,000 square feet of office space is under construction to be completed by the end of 2015 whilst an additional 6 million square feet of office space in the construction pipeline… An IT park is being built over 17 acres of land at Katunayake, just 18 miles north of Colombo and the Hambantota IT/BPM Park opened recently to provide 100,000 employment opportunities including over 40,000 seats in direct IT/BPM related jobs in the Southern Province. An additional 110 acres have been earmarked for IT campuses at Biyagama”.

And that, “(to) support the industry’s aggressive growth targets, the government has proposed a 5- year half tax holiday for new partnerships or firms engaging in international services in the field of Accountancy, Commerce, Finance, Law, IT, Engineering and Architecture… Capping of the personal income tax rate to a maximum of 16 per cent for IT and enabling services personnel in order to create brain gain in the industry… Telecommunication levy has been reduced from 20 per cent to 10 per cent while strictly regulating the implementation of minimum broadband speeds”.

Geographical Indication for Ceylon cinnamon soon

Daily Mirror - 04/08/2014

In response to a longstanding cry by the spices and allied exporters, action is now underway to obtain the Geographical Indication (GI) for Ceylon cinnamon and other allied products of which the geographical origin and its possessed qualities will be identified with a unique sign in the international market place.

Among other local authorities, the World Trade Organization (WTO), one of the protectors of GIs at international level has already agreed to assist Sri Lanka in providing technical support and a common front for commodities has expressed its willingness to fund the project. “The ministry and the National Intellectual Property office of Sri Lanka are directly involved with this operation with the Export Development Board (EDB) with the assistance of Spices and Allied Products Producers’ and Traders’ Association (SAPPTA),” said the Industry and Commerce Ministry Secretary Anura Siriwardena addressing SAPPTA’s 30th annual general meeting.

SAPPTA, the apex industry body initially expects to obtain GI for Ceylon cinnamon and later extend the registration to other spices and allied products as well.

In 2013, export earnings from spices and allied products increased by 40 percent to US $ 355.4 million with cinnamon, pepper, cloves and essential oils doing extremely well.

Meanwhile the outgoing chairman of SAPPTA Sarada de Silva told the GI registration will not only help them to market and promote Sri Lankan spices and allied products but also to safeguard them against the violators of the law in the international market.

“For instance, we can have higher protection from the countries like Vietnam, Indonesia which export cashew and cinnamon violating laws of origins. So, if we have the GI registration we can make a complain against them to the WTO,” he said.

However Silva is uncertain as to how soon GI registration could be made a reality as current legislation on intellectual property protection is not clear on GIs.

Therefore currently the national intellectual property law is being amended. According to Silva at present Sri Lanka does not have a single product with GI registration but the neighboring India owns more than 260 products with GIs out of which 174 are handicrafts. Sri Lanka’s export promoting agency EDB holds the sole ownership of the trade mark for ‘Pure Ceylon Cinnamon’, the second national brand for an agricultural produce after ‘Pure Ceylon Tea’.

PRISL Enterprising Fairs CEO Forum for plastics and rubber industry ends on high note

Daily FT - 04/08/2014

• SRI LANKA PLAST and RUBEXPO launches at CEO Forum

PRISL (The Plastics & Rubber Institute of Sri Lanka) together with Enterprising Fairs India Ltd (EFIPL) organised a CEO Forum on at The Kingsbury Hotel on 1 August, to encourage the plastics and rubber industries to take ‘exports’ as a growth strategy. Experts from the Government, EDB and India addressed this elite forum. The event saw over a 100 business leaders local and international, from the plastics and rubber industries, and they were able to gain valuable insights on industry best practices, through case studies from India and the present and future plans of the export market for Sri Lanka.

The eminent panel of speakers consisted of Export Development Board (EDB) Chairman and Chief Executive Bandula Egodage, Ministry of Finance and Planning Director General – Fiscal Policy Mahinda Siriwardane and Central Institute of Plastics and Engineering Technology (CIPET) Chief Manager S. Illangovan.

Egodage touched on the subject of ‘Building Brand Sri Lanka – Opportunities, Marketing and Support’, whilst Siriwardane elaborated on ‘Exports – the need of the hour’ and Illangovan discussed the topic ‘Standards, Skills, Training and Mentoring – The India Experience’.

As a follow up to the CEO Forum, the PRISL and Enterprising Fairs India will be organsing an International Seminar on Trends and Advancements in the fields of Plastics and Rubber on 5 August at The Kingsbury Colombo. Those who want to register for the seminar are encouraged to register through seminar@prisrilanka.com or by calling 0114545687.
On behalf of the organisers Enterprising Fairs India Ltd. Managing Director B. Swaminathan said, “As a catalyst that encourages trade, we are happy to launch two significant expos focussing on Plastics and Rubber, which play an integral part on local export earnings. As a developing nation Sri Lanka is opening up with its economy and infrastructural advantages, there is no better time than this to open up the country and inviting international businesses to experience its riches.”After the success of SRILANKAPLAST – an international exhibition on Plastics, in 2012,  Enterprising Fairs India Limited, a B2B Exhibition company from India, once again has collaborated with The Plastics and Rubber Institute of Sri Lanka (PRISL), to conduct their second edition of SRILANKA PLAST – a Plastics Expo (www.srilankaplast.com) and the first edition of RUBEXPO – a Rubber Expo (www.rubexpo.com) on 14, 15 and 16 August 2014 at BMICH, Colombo. To visit these expos you may pre-register at www.enterprisingfairs.in or send a mail to visitor@efipl.in.

Sri Lanka exports record highest first half earnings this year

Colombo Page - 02/08/2014

Sri Lanka's exports sector has recorded the highest first half earnings witnessed in five years for the January - June half of 2014.

Sri Lanka's January - June 2014 provisional exports has recorded the highest 1H earnings since 2010, registering US$ 5.41 billion. This is an increase of 45% from the 1H earnings of 2010 which stood at US$ 3.74 billion.

Exports earnings in in the first six months 2014 compared to the same period in 2010, within the five-year span manufacturing exports had surged almost 100%, followed by agro exports by 70%, industrial exports by 69%, fisheries exports by 65%, apparels by 57% and tea exports by 56%.

On a 1H YoY comparison of export regions, the highest exports growth is seen from the African region (41%), followed by EU (19%) and the Middle East (19%), US (17%), Central and Eastern Europe (15%), BRICS (14%), Latin America (12%), South Asia (11%) and CIS (6%). Leading five markets (countries) of exports on YoY in 1H 2014 are US, UK, Italy, India, and Germany.

Minister of Industry and Commerce Rishad Bathiyutheen has commended the country's apex export body, the Export Development Board (EDB) for the export earnings figures.

"Latest reports are good news for our US$20 billion goal, therefore we should commend our committed exporters for this achievement," Minister Bathiyutheen said when the EDB chairman Bandula Egodage briefed the Minister of the latest provisional export revenues.

The EDB is working towards achieving US$ 20 billion in exports earnings by 2020.