Lanka’s top global FDI partner in yet another $ 1 b rollout

Daily FT - 28/10/2014

• Malaysia places Lankan SMEs as top priority
• Going up to $ 1 b: – Delegation Lead Abdullah
• Great news for our SMEs: Rishad
• We are moving to SA via Lanka: SME Factors’ Al Qudsy
• Lanka-Malaysia trade at $ 577 m

Sri Lanka’s largest global FDI partner Malaysia is mulling a new wave of incremental FDI totalling $ 1 b with an emphasis on SMEs.
It will become one of the largest-ever Private Public Partnership (PPP) ventures in Sri Lankan SMEs and the entry of biggest SME financier in Malaysia to Sri Lanka is the first step in their South Asian leap.
“We are thinking of another $ 1 billion portfolio in Sri Lanka in addition to the current investment portfolio here by EXIM Bank of Malaysia. SMEs are the priority sector in this new $ 1 b rollout while other sectors are also being mapped,” said Syed Zed Al Qudsy, President of SME Factors, Jalan, Malaysia on 15 October, addressing Minister of Industry and Commerce Rishad Bathiudeen at the EDB Building in Colombo.

Al Qudsy was a member of the visiting Malaysian business delegation that made a courtesy call on Bathiudeen. The delegation was led by Dato’ Latt Shariman Abdullah (Special Functions Officer to Malaysian Prime Minister and the Finance Minister).

“This is the first time that we have been invited to Sri Lanka and this invitation is by Senior Minister for International Monetary Co-operation Dr. Sarath Amunugama. I will be reporting back to Malaysian Prime Minister Najib Razak of our successful tour to Sri Lanka,” said Abdullah.

He added: “The Malaysian business delegation I am leading now is of mostly financial sector consisting of Government as well as private sector firms. We are looking to partner with the financial sector, especially SME financing, and also mulling a new FDI incremental investment wave running up to $ 1 b in addition to what is here.”

Bathiudeen responded: “We warmly welcome your decision to enhance current FDIs to new levels. The National Enterprise Development Agency (NEDA) has been working to uplift the SME sector. This sector’s importance is recognised even by the vision of President Mahinda Rajapaksa.  SMEs are vital in many ways; they contributing more than 50% of our GDP. NEDA too reported that financing is a very critical issue. Your visit can help boost our bilateral trade too.”

In 2013, Sri Lanka-Malaysia bilateral trade totalled $ 577.66 m. The balance of trade has been heavily in favour of Malaysia due to high volume of imports of petroleum, palm oil and cement from Malaysia.
“We are a leader in SME financing in Malaysia, and the number one in SME receivable financing specifically. We have a proven track record in Malaysia. We intend to work with local partners in Sri Lanka and develop capacity with the objective of building the SME industry here. The sectors for the new $ 1 b rollout have to be mapped out in detail, since it’s still preliminary, but SMEs are priority. We need time to create the investment stories when we go into new territories. Operations-wise, we are in Malaysia but we have also gone to Thailand and Indonesia as well. SME Factors is also looking to expand with regional offices to South Asia and South East Asia, one important reason we are partnering here,” said Al Qudsy.
He added: “Such an expansion will boost business. We are coming to Sri Lanka with the hope and aspiration to partner and increase our presence. We have been supporting SMEs here already. In this next wave, we want to have an incremental investment running up to $ 1 b in addition to what has already been invested here. SME sector is the priority sector in this next $ 1 b new rollout and other sectors are being mapped. EXIM Bank of Malaysia is already partnering with SME Factors of Malaysia.”

Bathiudeen stated: “When it comes to Sri Lanka’s SMEs, it is the most neglected sector with regard to financing. As a result of lack of collaterals, they are continuously hampered and Lankan financial institutions too avoid them. In such a background, entry of firms such as yours can help our SME cash flows.”
Once the $ 1 b new investment from Malaysia comes in, it would become one of the largest-ever Private Public Partnership (PPP) ventures in the Lankan SME sector, which contributes more than 50% of Lankan GDP.

According to the Department of Commerce, the cumulative realised investment from Malaysia has surpassed $ 1.4 billion. Malaysia has become the number one investor in Sri Lanka and Dialog Axiata is the largest investor in Sri Lanka with over $ 1 billion realised investments.

In addition to Dialog, Maxis Berhard, Naratha Agro Industries, Wincon Development Ceylon Ltd., APPIT College and Merbok are among other Malaysian investment projects in Sri Lanka.

Jaffna IT Week to take IT/BPM sector north

Daily FT - 25/10/2014
By David Stephens

SLASSCOM Vice Chairman and Jaffna IT Week Convener Mano Sekaram addressing the media last evening. Also present from left: SLASSCOM Executive Director Dharshan Cooray, Emeritus Chairman Madu Ratnayake, SLEDB Chairman/CEO Bandula Egodage, ICTA CEO Reshan Dewapura and University of Jaffna Senior Lecturer Dr. A. Ramanan

The National IT/BPM Chamber, Sri Lanka Association for Software and Services Companies (SLASSCOM), in an effort to promote inclusive growth and reconciliation, will stage the Jaffna IT Week from 3-6 December at a number of venues across the region.

The Jaffna IT Week will comprise the Future Careers Program on 3 and 4 December at the Vembadi Girls’ High School, an IT/BPM Export Forum staged at the Tilko City Hotel on 5 December and the Jaffna IT Conference, which will be held at the Kailasapathy Auditorium of the University of Jaffna on 6 December.

Partnering SLASSCOM in this initiative are the Export Development Board (EDB), the Information and Communications Technology Agency of Sri Lanka (ICTA), the Ministry of Education, the University of Jaffna and the Yarl IT Hub.

The event’s organisers seek to use it as a vehicle to transport the IT/BPM sector to the north of the country.
“It’s very important that we get access to the talent base and capabilities of the entire country. Even today, a large part of the IT workforce, although they are in Colombo, comes from all over the country. It is not simply concentrated in one part of the city. Our vision is to take business to other parts of the country and I think Jaffna is a very promising destination,” asserted Virtusa General Manage and SLASSCOM Chairman Madu Ratnayake.

“Some of the early entrepreneurs and technologies came from Jaffna University and that part of the country. So I’m very excited to go there and raise awareness and bring on board other partners,” he added.
99x Technology CEO and SLASSCOM Vice Chairman Mano Sekaram echoed these sentiments before going on to highlight the finer details and objectives of the individual programs within the entire project.
“Within the next five years, we want to see 50% of our IT/BPO companies moving out of Colombo. Inclusiveness is imperative because 95% of the IT/BPO companies are in Colombo but 80% of the workforce is from other regions,” he told the Daily FT.

Towards this end, Sekaram said three locations had been identified – Jaffna, Kandy and Hambantota. “Our industry can operate from anywhere as long as there is infrastructure. We need to be close to universities, have good infrastructure in relation to transport and telecom, and the living standards of our workforce must also be high. We are trying to promote this during Jaffna IT Week,” he added.

The Future Careers exhibition will be organised by SLASSCOM, ICTA and the Ministry of Education, while the IT/BPM Export Forum will be sponsored by EDB and ICTA. Proceedings will be brought to a close with the Jaffna IT Conference, an event which will bring together a number of preeminent personalities from the IT/BPM sector.

Sri Lanka represented at the largest SME Fair in the Asia Pacific region in Guangzhou

news.lk - 21/10/2014

Sri Lanka participated for the first time at the 11th edition of the China International SME Fair (CISMEF) in Guangzhou from 11 to 14 October 2014. The Sri Lanka Pavilion was jointly organized by the Consulate General of Sri Lanka in Guangzhou and the Sri Lanka Export Development Board and had strong representation from business leaders of the SME sector, showcasing premium products from thrust export sectors such as gems and jewellery, tea and spices, handicrafts, handlooms and ayurvedic products.
Mrs. Sujatha Weerakoon, Director General of the Sri Lanka Export Development Board, speaking at the opening of the Sri Lanka Pavilion pointed out that the Government’s numerous trade facilitation initiatives and President Xi Jinping’s recent State Visit to Sri Lanka have created new opportunities for even closer cooperation between Sri Lanka and China, particularly in trade and urged Sri Lanka companies present to maximize the opportunity to enter the attractive Chinese market.

CISMEF, the largest SME Fair in the Asia Pacific region is both a window for Chinese SMEs to learn about the world, and a bridge for the products and services of international SMEs to enter the Chinese market. This year Mexico was the co-host country; there were 560 overseas participants from 21 countries; 2714 Chinese booths and around 200,000 visitors.

Mrs. Weerakoon, addressing the International SME Development Seminar & Roundtable Conference held on 12 October highlighted the attractive business environment in Sri Lanka; the significant increase of Sri Lanka’s exports from US$ 6,000 million in 2005 to US$ 11,000 million in 2013 and SME Development initiatives by the Sri Lankan Government, noting that many large well known Sri Lankan companies started off as SMEs.

The Sri Lanka trade delegation also participated in the Sri Lanka- China Jewellery Forum organized on 13 October by the Consulate General of Sri Lanka in Guangzhou; the Guangdong Institute of Diamonds, Jade & Jewellery and the Chamber of Commerce of Coloured Gemstones & Jewellery of Guangdong as well as in the Guangdong- Sri Lanka Enterprises Business meeting organized on 14 October by the Consulate General and the Guangdong Committee of the China Council for the Promotion of International Trade (CCPIT). Successful B2B meetings were held as a key part of both these events.

Mrs. Weerakoon met key officials of the Guangdong Commerce Department and the Guangdong CCPIT to explore further partnership opportunities in trade development.

Sri Lanka’s participation in the CISMEF Trade Fair is a landmark in establishing the presence of Sri Lanka’s premium trade products in Guangdong – China’s richest province.

First-ever on-water Boat Show a success

Daily FT - 18/10/2014

• 2013 boat exports surge by 46%
• Buyers and exhibitors from Korea, Maldives, Seychelles
• Improved standards: Minister Senaratne
• Value-added business: EDB’s Egodage

Economic Development Minister Basil Rajapaksa (second from left), Minister of Fisheries and Aquatic Resources Development Rajitha Senaratne (third from left) and EDB Chairman/CEO Bandula Egodage at Boatshow 2014 on 10 October at Dickowita Harbour, Wattala

Colombo’s latest international boat show, which featured an on-water boat display for the first time, concluded successfully after a three-day run on 12 October.

“We have been talking about five hubs. Today there are two major milestones taking place at this event – the promotion of the maritime hub as well as our tourism,” said EDB Chairman and CEO Bandula Egodage, addressing the inauguration event of Boatshow 2014 on 10 October at Dickowita Harbour, Wattala.

Economic Development Minister Basil Rajapaksa visits Boatshow 2014 on 10 October at Dickowita Harbour, Wattala

Taking part in the opening session were Minister of Fisheries and Aquatic Resources Development Rajitha Senaratne, EDB ED Dr. Yousuf Maraikkar, Boat Building Technology Improvement Institute Chairman Neil Fernando, Boat Building Technology Improvement Institute Managing Director Gamini B. Herath, local and international delegates of International Council of Marine Industry Associations, ICOMIA Marinas Group Chairman Roberto Perochchio, ICOMIA Marinas Group Secretary Peter Jansen, local and international exhibitors at Boatshow2014 and buyers and boat experts from S. Korea, Bangladesh, Maldives, and Seychelles.

Minister of Economic Development Basil Rajapaksa toured the Boatshow ’14 on 10 October. The one-day ‘Industry Conference on Marina Development and Marine Tourism in Sri Lanka’ was held on 12 October and that too concluded successfully.

“We have been talking about five hubs. Today there are two major milestones taking place at this event-promotion of the maritime hub as well as our tourism” said Bandula Egodage (Chairman & CEO of EDB), addressing the event, and added:
Egodage added: “Fishery contains tourism. This is the link between the Boatshow and ICOMIA effort. Non-traditional exports are the future. By doing this event, we hope to increase exports. Not just imports or exports but an increase in bilateral trade. Boat building is a value-added business, bilaterally. You are the experts and we need your help.”

Sri Lanka’s boat exports that stood at $ 56 m in 2012 increased by a strong 46% in 2013 to $ 82 m. In 2013, a market diversification study by the EDB identified that ships and boat exports were a “winning export category” in a growing global market. In this analysis “boat exports” also achieved the top slot among several such other promising exports of Sri Lanka.

“This event would facilitate manufacturers and fisheries suppliers to promote their products and services to a target audience in the international market,” said Minister of Fisheries Senaratne.

He added: “This would undoubtedly help to promote Sri Lanka as a main boating hub in South Asia while helping to develop this market by showcasing the latest products, technology, and services in this industry. Following Boatshow 2008, 2010 and 2102, I believe this show has further improved its standards with the participation of Bangladesh, Maldives, Seychelles, South Korea, Belgium, Netherlands and Norway.

Suppliers of leisure, pleasure, commercial and industrial and fishing vessels, materials, repairs, training and other service provision. A trend is evolving in the Western market to turn towards developing Fibre Enforced Plastic (FEP), especially for hull construction, which is mainly due to cost saving factor. I hope this Boatshow will be very helpful to meet this challenge.”

In Sri Lanka, more than 100 establishments are engaged in boat manufacturing; 15 of them are large scale, while 35 are medium to large scale companies. This sector also provides around 12,000 direct and indirect employment opportunities to Sri Lankans. More importantly, global ship and boat manufacturing is a promising exports sector.

Sri Lankan ICT companies at GITEX 2014 in Dubai

Daily FT/ 16/10/2014

Six Sri Lankan ICT companies, Brandix I3 Ltd., hSenid Software International, Microimage Ltd., Negete Ltd., Pyxle Ltd. and AP Lanka Ltd. are exhibiting their software products and services at ‘GITEX Technology Week’ from 12 to 16 October at the Dubai World Trade Centre.

The Sri Lanka Export Development Board (EDB) organised the country pavilion in coordination with the Sri Lanka Consulate General in Dubai.

The Sri Lankan ICT sector is aggressively looking for business opportunities on a global scale. Sri Lankan ICT companies are exporting software products and services to regions such as North America, the EU, Australia, East Asia, Middle East and Africa. Their core competencies include automated application testing, infrastructure outsourcing, high-end R&D, Enterprise Resource Planning (ERP), cloud technology, mobile applications and many other business solutions.

This year, there are 3,700 companies from 61 countries exhibiting under the show’s four knowledge themes: smart, cloud, big data and mobility.

The Gitex Technology Week 2014 sees the debut of a series of conferences catering to more than 100,000 information and communication technology professionals and 150 speakers. These conferences include Cloud Confex, Big Data Conference and Digital Strategies Forum.

Consul General of Sri Lanka in Dubai, Abdul Raheem, met Sri Lankan participants at the Sri Lanka pavilion and also hosted a welcome dinner along with members of the Sri Lankan business community in Dubai. Sri Lanka Business Council Chairman Farook Kassim and other senior members attended the event.
Raheem said that Sri Lanka’s continuous participation at the GITEX exhibition will help Sri Lankan ICT companies to penetrate the Middle East and North Africa (MENA) region as Dubai is the gateway to this growing market.

US-SL trade talks conclude in Colombo

Daily FT - 16/10/2014

• GSP, labour, trade promotion among discussed items
• SL-US biz relationship at $ 3 b: Trade Rep Delaney
• US Ex-Im Bank renewing ties with Lanka: Rishad
• US biz team also in town, US-SL Biz Forum today
• YoY SL-US trade up by 21% to $2.8b

Minister of Industry and Commerce Rishad Bathiudeen (third from left) addresses the 11th Joint Council Meeting under the US-Sri Lanka Trade and Investment Framework Agreement joined by SL Embassy in Washington DC Minister Counsellor Bandula Somasiri (far right), Sri Lanka’s Ambassador to the US Prasad Kariyawasam (second from right), Ministry of Industry and Commerce Secretary Anura Siriwardena (fourth from right), DoC DG R.D.S. Kumararatne (fifth from right) and MoIC Additional Secretary Sheita Senaratne (sixth from right) and Minister (Commercial) at Lanka Embassy in US Bandula Somasiri (right)

Talks under the Sri Lanka and US Trade and Investment Framework Agreement (TIFA) concluded yesterday in Colombo, reiterating the commitment to foster greater bilateral economic engagement.
“The US-Sri Lanka Trade and Investment Framework Agreement (TIFA) is the premier dialogue for managing bilateral trade and investment relationship between both countries. This relationship amounts to $ 3 b” said Michael Delaney, the visiting Assistant United States Trade Representative for Central and South Asia yesterday in Colombo.

Delaney, who is leading a 10-member official delegation to Sri Lanka, was addressing the 11th Joint Council Meeting (JCM) under the US-Sri Lanka Trade and Investment Framework Agreement (TIFA) at the Taj Samudra, Colombo.

Visiting Assistant United States Trade Representative for Central and South Asia Michael Delaney addresses the 11th Joint Council Meeting under the US-Sri Lanka Trade and Investment Framework Agreement held at the Taj Samudra yesterday

Joining Trade Representative Delaney in his team were Andrew Mann (Chargé d’Affaires of the Embassy of US in Sri Lanka), Ann Zollner (Division Chief, Trade Policy and Negotiations, Bureau of International Labor Affairs/United States Department of Labour), Matthew Beh (South Asia Trade Officer/United States Department of State), Ryan Essman (Sri Lanka and Maldives Desk Officer/United States Department of State), John Michael Fleming (Commercial Consul/US Consulate General Chennai), Manimala Venkatram (Senior Commercial Specialist/US Consulate General Chennai), Jessica Slattery (Foreign Affairs Officer/US Department of State Office of International Labour Affairs), Kalpana Reddy (South Asia Intellectual Property Attaché/US Embassy New Delhi, India) and Allison V. Areias (Economic and Commercial Counsellor/Embassy of USA, Sri Lanka).

Joining the opening session were Minister of Industry and Commerce Rishad Bathiudeen, Sri Lanka’s Ambassador in USA Prasad Kariyawasam, DoC DG R.D.S. Kumararatne and EDB Chairman/CEO Bandula Egodage.

The 15 October technical session was co-chaired by Trade Representative Delaney and Ministry of Industry and Commerce Secretary Anura Siriwardena). Twenty-seven delegates from the Sri Lankan side, including reps from the Ministries of Industry and Commerce, Agriculture, Economic Development, Labour Relations, Civil Aviation, Petroleum Industries, Investment Promotion, Highways, Ports and Shipping, External Affairs and Finance and Planning, as well as Sri Lanka Customs, Ports Authority, Sri Lanka Tea Board, BoI and EDB were in attendance.

After the conclusion of the session, a joint message by both Sri Lanka and the US on the 11th United States and Sri Lanka TIFA Joint Council Meeting was issued, which stated:
“Senior officials from the Governments of the United States and Sri Lanka met today to continue their trade dialogue and evaluate progress under the United States-Sri Lanka Trade and Investment Framework Agreement (TIFA). The officials discussed a wide range of trade and investment issues including market access, the US Generalised System of Preferences (GSP), labour, trade promotion efforts, intellectual property rights, agriculture, and sector-specific investment challenges. Progress on all of these trade and investment issues fosters economic growth, thus providing a strong foundation for inclusive economic development.

“The meeting marks the 11th session of the US-Sri Lanka TIFA Council. The US-Sri Lanka TIFA, signed in 2002, has been the primary forum for bilateral trade and investment discussions between the two countries. The TIFA process has been the focal point of a sustained and multi-faceted high-level engagement between the United States and Sri Lanka on trade and investment issues, including addressing impediments to greater trade and investment flows between the two countries.

“During the TIFA Council Meeting, both parties took note of progress made in the subcommittee working group on labour. The TIFA process encourages public and private sector dialogue and facilitates private-public partnership conferences, business opportunities, events and investment fora on the sidelines of TIFA official meetings. Following this tradition, the US-Sri Lanka Business Forum will be held at the Ceylon Chamber of Commerce at 10 a.m. on Thursday, 16 October.”

At the morning’s opening session, Trade Representative Delaney said: “Being the premier dialogue channel, we attach considerable importance to the TIFA and in our view, over the years TIFA has proven that it has been successful in deepening our economic relationship. The US greatly values our trade and investment relationship with Sri Lanka. That relationship is responsible for a lot of beneficial things and is hundreds of years old. Today we in this room have been entrusted to manage this relationship and take the necessary measures that will enable it to continue to grow. Our economic relationship is about creating employment and prosperity for both our countries. We have accomplished much and we can do so much more. Today we have a diverse agenda of issues to work through and let address ourselves to this task, and grow our economic relationship.”

Bathiudeen, delivering his inaugural address at the morning session, said: “We are pleased that this is the fourth occasion Delaney is visiting Sri Lanka. It is with satisfaction that recall as to how you generated support of the US Government for Sri Lanka’s Conflict Affected Widows Project and facilitated a significant monetary contribution for project commencement, thereby uplifting their lives. I am happy to note that a US business and investment team is now in Colombo on the sidelines of TIFA talks. My Ministry will be hosting the US-Sri Lanka Business Forum in association with the Ceylon Chamber of Commerce and AMCHAM Colombo, followed by B2B meetings.

“Today’s senior officials’ meeting will cover many important aspects, thereby opening the door to jointly explore new opportunities in trade and investment. TIFA has become a very effective mechanism for the two governments to advance trade and investment interests, since it began in 2002. As Sri Lanka takes on a journey to become the economic hub of South Asia, it is clear that TIFA’s importance will continue to grow.
“Thanks to the visionary leadership of President Mahinda Rajapaksa, Sri Lanka is now on a journey to become an upper middle income country in the near future. Sri Lanka is reporting stronger GDP growth and modern infrastructure facilities, as well as a better positioning to become the economic hub of South Asia. Due to our strategic location, the proposed five hubs plus tourism strategy, the new port and airport infrastructures, and our connectivity, our international trade is improving.

“As for bilateral trade, the US is the single largest buyer of our exports since 1979. Seen from our side, bilateral trade between both countries increased by a strong 21% to 2.8 billion dollars in 2013, compared to 2012; the US absorbs 23% of Sri Lanka’s annual total exports, of which 73% comes from high-end apparels. Sri Lanka also has the most liberal investment climate in South Asia. According to the Washington-based Heritage Foundation’s Index of Economic Freedom of this year also, Sri Lanka has maintained its commanding position as the most economically-free nation in South Asia.

“The US is an important source of Foreign Direct Investments to Sri Lanka. So far there have been more than 220 US investment projects to the value of around $ 400 million. Speaking of investments, I understand that the US Export Import Bank has renewed its partnership with Sri Lanka after almost a decade. Through its facilitation, a US company has invested $ 65 million in a water supply project in Badulla District. I invite other US investors to make use of Export Import Bank’s benchmark initiative for infrastructure development projects in Sri Lanka.”

Sri Lanka Pavilion at Gardex / IFEX 2014 on Oct. 15-17 in Japan

news.lk - 15/10/2014

The Sri Lanka Export Development Board (EDB) with the assistance of the Sri Lanka Embassy in Tokyo, Japan, has organized a Sri Lanka Pavilion at the Gardex / IFEX 2014 International Garden Exhibition from October 15 to 17 in Japan.

Eight (08) leading Sri Lankan exporting companies from Coconut Based Substrate and a leading Foliage and Live Plants exporter exhibits at this event.

The Sri Lanka Country Pavilion showcases the following range of products during the event:

Coco peat grow bags
Coco peat planter bags
Coco peat bales, disks and briquette
Coir mattings
Coir pots and decorative Coconut shell pots
Cut foliage and potted plants
Japan is one of the main destinations for Coconut based substrate other than the EU countries and it shows a huge potential for further expansion through the demand created with their intensive farming systems.

Sri Lanka Export Development Board has organized Sri Lanka's participation at Gardex 2014 targeting Coconut based substrate, Cut foliage and potted plants.  This exhibition is targeting entire Gardening industry including Gardening Equipment, Floriculture and Gardening inputs.

Since this show is very popular in all other Asian countries such as Korea and China which are the other main target markets for Sri Lankan products, the participants could establish business linkages with these countries by participating at this event.