Business
French financial institution steps into assist Sri Lanka's SMEs
A French financial institution has stepped into financing Sri Lanka's small and medium-scale enterprises via the commercial Bank of Ceylon.
Proparco, a subsidiary of Agence Française de Développement (AFD) Group dedicated to private sector financing, signed an agreement with the Commercial Bank of Ceylon for the funding arrangement recently.
Through this agreement, Proparco will be supporting a major player in financing Sri Lankan small and medium-sized enterprises through a USD 25m loan allocated to Commercial Bank of Ceylon (CBC),AFD official said.
By allocating a USD 25m loan to CBC, Proparco is reasserting its support to SMEs in the country after many other credit lines targeted towards this key segment of the economy.
This new long-term financing is expected to create or support over 5,000 jobs in Sri Lanka.
This operation is in line with Proparco’s commitment to support access to finance for SMEs in developing countries and emerging economies.
Over the last ten years, Proparco’s parent company, the French Development Agency, has committed 600 million EUR to sustainable projects in Sri Lanka in key development sectorsincluding water and sanitation, urban development, energy, and irrigation.
With this project, the AFD Group's investments in the country will cross 850 million euro.
Small and medium-sized enterprises (SMEs) are the backbone of Sri Lanka’s economy.
They make up about 75% of the total number of companies in the country and account for almost half of employment and GDP in the country.
Despite the key role they play in the national economy, Sri Lankan SMEs experience major difficulties in obtaining credit, which has a significant impact on their capacity to invest, recruit and grow.
Ceylon tea demand in European countries drops due to quality issues
The demand for Ceylon tea in several European countries recorded a drop following the cancellation of quality certification given to local tea, industry sources said.
Tea exporting neighboring country and several NGOs are carrying out a conspiratorial campaign to undermine Ceylon tea at time where its demand gathering momentum, a group of plantation sector executives claimed.
A world wide publicity campaign and social media campaign are now being carried out that the island nation has failed to improve the living standard of tea plantation works there by violating good worker practices.
Further, the US embargo imposed on Iran has greatly affected the Sri Lanka tea exports to that country, they said.
30 present of Sri Lanka upcountry and low country has been rejected in tea auctions due to drop in sales to Iran, tea sector executives said adding that several plantation companies are on the verge of closing down due this reason.
In order to export tea, companies have to comply with local and foreign standards and regulations pertaining to food quality and safety.
These are usually mandatory, product standards. In this regard, tea has to comply with ISO3720 product standard for black tea.
In addition to ISO3720, the Sri Lanka Tea Board requires tea exports to comply with other product standards, including foreign matter, micro-biological contamination, heavy metal and pesticide residue limits, which are specified and monitored by the Tea Board.
International food assurance standards such as Hazard Analysis and Critical Control Point (HACCP) and ISO22000 (Food Safety Management System) are also increasingly becoming important in the tea trade.
Business registration from home
He was moving regulations in parliament under the Public Contract Act and accordingly, fees payable (VAT excluded) on four types of contracts have been amended.
In that, the new fee of Rs 2000 is applicable for application for registration as an agent, sub-agent, representative or nominee for or on behalf of a tenderer, the new fee of Rs 10,000 for application for registration of a public contract, the new fee of Rs 2000 for application for renewal of a registration and the new fee of Rs 10,000 for application for re-registration of a public contract.
The Department of Registrar of Companies earned a revenue of about Rs 600 million and Rs. 664 million in 2017 and 2018 respectively.
The “Starting a Business Indicator” of Ease of Doing Business rankings for Sri Lanka (at 87.87 out of 100) showed the country ranked at second in South Asia just after Maldives (at 89.17).
The South Asian regional average for Starting a Business Indicator is 85.44.
Central Bank to cancel Sinhaputhra Finance license
Monetary Board of the Central Bank of Sri Lanka, has decided to cancel the license issued to Sinhaputhra Finance PLC under the Finance Business Act No. 42 of 2011 (FBA)FBA.
The Company in a stock exchange filing informed that it has received a notice of cancellation of license granted By the Central Bank to carry out finance business under the FBA as the company was facing liquidity crisis.
Further, the Director of the Department of Supervision of Non- Bank Financial Institutions of the Central Bank has decided to cancel the Certificate of Registration of Sinhaputhra Finance as a Registered Finance Leasing Establishment under the provisions of the Finance Leasing Act No. 56 of 2000 (FLA).
However, Sinhaputhra Finance says that it has submitted an objection against the cancellation of license and a comprehensive capital plan backed by an investor who has demonstrated financial credulity of meeting the regulatory capital requirement has been submitted to the monetary board.
Sinhaputhra Finance PLC is awaiting the response of the monetary board towards this end.
Sinhaputhra Finance gets chance to raise capital
This action was taken further to the regulatory actions taken against the Company, the Monetary Board of the Central Bank.
In view of the proposed capital augmentation plan submitted by the Sinhaputhra Finance PLC and in the interest of depositors, the Monetary Board decided to provide it with an opportunity to implement the proposed capital augmentation plan within the time frame stipulated.
Beleaguered finance company, Sinhaputhra Finance PLC’s licence was given notice of cancellation by the industry regulator, the Central Bank with the company objecting to the move.
In an announcement to the Colombo Stock Exchange (CSE)last month the CB said that owing to the critical financial condition, and due to non compliance to the Finance Business Act directions issued by CB, this decision was taken. Sinhaputra has the right to object within 30 days, it said.
The company announced to the CSE that the company has submitted an objection and that a comprehensive capital plan backed by an investor who has demonstrated financial credibility of meeting the regulatory capital requirement was submitted to the Monetary Board of the CB and the company's awaiting their response.
Last year the company said that it was talking to prospective investors to infuse much-needed capital.
The company in a stock market filing last November said that the Board of Directors was negotiating with a few potential investors through a professional investment bank.
Currently, the company’s focus is to find an investor who can actually move beyond the Rs. 2.5 billion capital requirement based on the deadline given,” it said, adding that it will be able to resolve this matter before January 31, 2019.
The CSE put the company on a 'Watch List' due to an emphasis of matter on going concern in the audit report for the year ended March 31, 2018.
Indo-Lanka auto giants begin production of SUVs
Sri Lanka begins its first ever assembly manufacturing compact sports utility vehicle (SUV) KUV100 in partnership with an Indian giant unleashing the potential of adding local value in the production process.
India’s Global Diversified Conglomerate Mahindra & Mahindra partnered with Sri Lanka Ideal Motors opened vehicle assembly manufacturing plant in Welipenna, Mathugam on Saturday.
Prime Minister Ranil Wickremasinghe and High Commissioner of India Taranjit Singh Sandhu cordially joined hands in launching assembly manufacturing process of (SUV) KUV100 at a glittering ceremony.
The new Rs3. billion vehicle plant will have an installed annual capacity of up to 5,000 units and will provide direct and indirect employment to about 200 people over the next two years.
The CKD (completely knocked down) unit plant, which has a clear operational strategy for the next three years, will produce several vehicles starting from M&M's compact sports utility vehicle (SUV) KUV100.
The first vehicle was rolled out today. The local assembly operations include localisation of four components such as tyres, batteries, exhausts and seating systems.
While tyres will be supplied by Ceat tyres, the automotive batteries will come from the battery maker Exide, both Indian companies with footprints in Sri Lanka.
Sri Lanka implements a free trade agreement with India but the country is not exporting automotive components to India, so here is a chance to actually accomplish that," Nalin Welgama, Chairman of Ideal Motors, said
Adhering to government policy for electric vehicles in Sri Lanka, Mahendra has already planned two EVs for local market, Dr. Pavan Goenka, Managing Director, Mahindra & Mahindra Ltd said
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The Sri Lanka passenger car market's size is in the range of 32,000-35,000 units per annum, of which new car sales account for only 25%.
Prime Minister Ranil Wickremesinghe in his address mentioned the substantial opportunities that exist for industrial collaboration between Indian and Sri Lankan companies given the complementarities.
Indian High Commissioner Taranjit Singh Sandhu said that the plant symbolises the promotion of ‘Make in Sri Lanka’ alongside ‘Make in India.’
High Commissioner pointed out that it also demonstrated the commitment of Indian companies to stand with Sri Lanka during difficult times.
Indian industrialists vie multi million projects in SL
This was conveyed when Director Praful Kumar along with his delegation met with the Minister of Industry and Commerce, Rishad Bathiudeen in Colombo.
The Industry-led and industry-managed CII is India's second largest industry chamber with more than 9100 direct and over 300000 indirect membership of firms from 291 various national and regional bodies (private and public sectors, SMEs to multi nationals). CII is no stranger to Sri Lanka and its previous teams visiting Colombo met Minister Rishad Bathiudeen on several occasions.
"We are interested in securing large scale projects in Sri Lanka such as refineries, IT parks, desalinisation plants, pharmaceutical zones, container terminals and vocational training facilities. Many mechanisms are available in India for funding of such large projects overseas. We at CII can be a facilitator for such project funding in Sri Lanka as well. We can move in with funding from Indian Exim Bank. The Buyers’ Credit (BC) project funding mechanism of Indian Exim Bank is one such way,” Director Praful Kumar said.
In Buyers’ Credit, project execution is done by an Indian firm called the project exporter. Even though the fund recipient is an Indian company, the firms in the target country too benefit immensely. 75% of the material for the project needs to come from the Indian firm, but Sri Lankan contractors can supply the labour -and also the 25% materials in the BC project.
The benefit of this is that there is no limit for the dollar value of the project-it could be a low US $ one million or high US $ 500 million-or much more. The US $398 Mn project commenced in Ghana recently under BC by the Indian Exim bank and the project on a new road in Maldives at US $20 Mn are examples. Average project length is three years and it takes about three to six months for initial background work. High-value projects such as ports, bridges, highways, and IT parks are a good match for BC projects.
"Even though revenue generating projects are preferred for most BC projects, even social non-profit projects without revenues, too are possible. We can facilitate top Indian multinationals such as Reliance, Wipro, Tata, Aditya Birla etc to Sri Lanka in this if the projects are large scale," he said.
Meanwhile, since March 2018, Sri Lanka has been placed in the Positive List of Countries for Buyer’s Credit under India’s National Export Insurance Account (NEIA) by India’s Export Credit Guarantee Corporation (ECGC).
The main investment sectors that Indian FDIs in are tourism & hotels, petroleum-retail, manufacturing, real estate, telecommunication, banking and financial services. Among investments by Sri Lankan companies in India are apparel (Brandix, MAS holdings), furniture (Damro), energy (LTL Holdings), and in freight servicing and logistics (DRH Logistics and Freight Links International).
Sri Lanka embarks on an ambitous drive to attract FDIs
Sri Lanka has embarked on an ambitious endeavor in attracting more foreign investors to enter into partnerships and make investments in a big way following the set back caused by Easter terror attacks.
With a view of supporting this initiative, The Ceylon Chamber of Commerce will be organizing the Sri Lanka Investment and Business Conclave 2019, under the theme “Explore: Network: Capitalise”, on 16th September 2019, for the fourth consecutive year at the Shangri-La Colombo.
It will be supported by Ministries of Development Strategies and International Trade, Ministry of Foreign Affairs, Finance, Industry and Commerce, Board of Investment of Sri Lanka, the Department of Commerce and the Sri Lanka Export Development Board.
The event is also supported by the International Finance Corporation a member of the World Bank Group, as the Knowledge Partner.
The Sri Lanka Investment & Business Conclave 2019 offers the perfect blend of opportunities aimed at enriching institutional, corporate and individual investors and business houses with a comprehensive set of guidelines for their investment decisions.
It will act as a networking opportunity for introductions to potential overseas business partners with a view of establishing partnerships/investments in Sri Lanka.
New urbanization initiative with new opportunities for investment has open doors for potential investors to set up joint ventures in Sri Lanka.
It boasts for being one of the lowest corporate tax rates in the region including strong policies in place for protecting international investors and business partners ensuring high quality of Life for foreign investors.
The Sri Lankan government offers many attractive facilities to investors to setup joint ventures in Sri Lanka.
Focus sectors for investment includes Agriculture, Apparel, Education, Export Manufacturing, Export Services, Infrastructure, Knowledge Services, Tourism and Leisure, Power & Energy, Telecommunications and Related Services, Ports Development, Distribution of Petroleum related products such as LPG & LNG and Recycling of Waste etc.
Casino mogul Ravi Wijeratne takes over MTD Walkers PLC
Accordingly, in a filing to the CSE released today, MTD Walkers PLC said that they received a letter dated 6th September 2019 on Monday (9th September) from Ravindranath Wijeratne which stated that he had agreed with MTD Capital Bhd to purchase a majority stake amounting to 152,183,583 ordinary voting shares of the company constituting 90.78% through a voluntary offer to be made to all the shareholders of the company, in terms of the Takeovers and Mergers Code of 1995 as amended.
In March 2018, Anunine Holdings, led by Deshamanya Anurath Abeyratne and his family, has bought the entirety of its 91% controlling stake in MTD Walkers PLC for an amount between US$ 8-10 million.
Several local banks sought injunctions against MTD Walkers PLC on February 6th, 2019 over the recovery of loans.
Published accounts reveal liabilities in the region of Rs.18 billion clearly stating that the sale price of US$ 8 million is inadequate to settle all liabilities.
A renowned Indian and Japanese investor consortium has taken over the ownership of MTD Walkers from Malaysia’s MTD Capital Bhd shortly in a transparent share transaction in the CSE dispelling unwarranted rumors spread by interested parties, company sources said.
The deal was sealed following the infusion of US$ 25 million by the new investors, stock analysts said.
The Colombo Stock Exchange halted trading of MTD Walkers’ shares in January this year after calling for clarification—albeit belatedly—about recent events at the troubled conglomerate.
Separately, the Commercial High Court issued enjoining orders in favour of eight banks, restraining MTD Walkers PLC from transferring any of its shares in any of its subsidiaries to its Malaysian parent company until it settles billions of rupees in debt to the lenders.
Singer appointed as Dell Technologies commercial distributor
Singer, the country’s premier consumer product retailer has been appointed as the DELL Technologies commercial distributor in addition to the DELL Consumer distributor status which Singer currently holds.
As the DELL Technologies commercial distributor, Singer will distribute DELL commercial products to authorized resellers island wide empowering them to cater to both Government and Private sector through DELL’s latest technologies.
Through the past years, Singer has transformed in to a technological powerhouse with an impressive array of products enhancing its marketing capabilities in selling computers, tabs, mobile phones and so on.
Formerly, Singer partnered with DELL in 2014 as a Large format retailer and distributor for consumer products and embarked successfully which eventually crowned Singer as the most coveted Best Consumer Distributor for FY2018 and FY2019 at DELL Technologies Partner Awards.
Workspace transformation is taking place and trends are changing hence Singer is getting ready to cater to the needs of the government and private organizations for the future with this partnership to be able to cater any requirement/need in the industry.
Mahesh Wijewardene - Group CEO of Singer Sri Lanka PLC stated, that Singer is on a new journey to fetch world’s latest technology and be a part of the workforce transformation journey in the Sri Lanka.
LHI celebrates 35th anniversary establishing global footprint
Lanka Hydraulic Institute Ltd (LHI), a leading Sri Lankan engineering consultancy firm, has been extending its hydrology expertise for 35 years in the coastal and water sector with more than 400 consultancy projects completed worldwide, senior officials of the institute said.
LHI has completed 26 major projects including 2D physical modeling for coastal protection ventures worldwide during the fiscal year 2018/19, they said.
The institute has been in the frontier of consultancy services in the engineering sector providing solutions for complex coastal and environmental issues/ projects worldwide.
LHI was established in 1984 by the conversion of the Coastal Engineering Research Centre (CERC) of the Coast Conservation Department into a Public Limited Liability Company in accordance with a Cabinet decision, Chairman of the company Dr. Ranjith Galappatti revealed.
Mr Galapatti a distinguished old Royalist noted that hydrodynamic model testing is used extensively in hybrid and composite modeling, in which physical models work interactively or combined with numerical models and informatics systems.
“This provides customers with ground-breaking solutions. Accurate and up-to-date equipment are available in-house, and our equipment is tested by experts regularly,” he added.
LHI’s comprehensive model testing facilities serve customers and projects within port, coastal, hydraulic and offshore engineering.
Model testing has been conducted for the past two decades for different clients from all over the world, he pointed out adding that physical modeling covers a wide range of testing for most of the coastal engineering applications.
It includes Breakwater Stability Testing, Harbour Disturbance Modeling and Ship Movement Modelling, etc, he explained.
A significant feature is that all projects are handled inhouse using Sri Lanka expertise, LHI CEO Janaka Kurukulasuriya, a former Urban Development Authority (UDA) Chairman,said..
All its processes are streamlined, quality assured, and in accordance with ISO 9001:2008. LHI’s services are relied upon by a number of international clients in Algeria, Bangladesh, Belize, Bhutan, Brunei, Eritrea, France, India, Iran, the Maldives, Mauritius, Oman, Senegal, South Korea, and the UAE, he said.
Local companies get help to enter the Indian market
The government continues its initiative of assisting Sri Lankan companies to enter into the massive Indian market.
The Ministry of International Trade and Development Strategies has already launched the ‘Break into India’ strategy in which the request for proposals was published by the Export Development Board (EDB) this week.
A report titled ‘Entering the Indian market: Lessons from Sri Lankan firms that did it’ looks into the strategies used by about 30 companies to establish themselves, and is the first in a two-step process to encourage more Sri Lankan companies to tap into the Indian market.
An international expert will be recruited to conduct research that provides any current or prospective Sri Lankan exporter or investor into India with in-depth market entry knowledge, including mapping of entry requirements, regulatory frameworks, institutions and market potential to ease of doing business with India.
It has also been planned a business-to-business facilitation where market linkages will be forged for Sri Lankan businesses in priority sectors in India.
The Sri Lankan government will be urging Indian investors to form joint ventures with their counterparts from Sri Lanka's private sector for ventures in India with a view to facilitating the entry of Sri Lankan products, brands and companies into India.
During the past few years, Sri Lankan exports to India of some other products were also subjected, from time to time, to various forms of ‘administrative protection.'
These restrictions include stringent food safety regulations, delaying customs clearance and changes made in the list of ports demarcated for the entry of Sri Lanka goods.
There is also anecdotal evidence that some Sri Lanka exporters have begun to avoid the FTA and export under the 'most favoured nation' (MFN) tariffs because of the cumbersome and costly procedures involved in obtaining RoO certificates and delays in import clearance at the Indian ports.
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