v2025 (2)

v2025

Business

 Indian industrialists vie multi million projects in SL

Indian industrial investors are preparing for major investment moves in Sri Lankan projects-not only on mega-infrastructure ventures but even on smaller outlays. India’s powerful Confederation of Indian Industry (CII) has, for the first time, expressed its new investment and funding push on Sri Lankan infrastructure projects r3cently .
“Sri Lanka is becoming a preferred destination for Indian investors due to its similar climate and close proximity to India. We are also keen on showcasing Indian expertise in Sri Lanka through large scale projects,” said Praful Kumar Mutha (Director-Mohan Mutha Exports Ltd, Chennai) who was leading a Confederation of Indian Industry's (CII) 10 member business delegation to Sri Lanka.

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).

80 countries have been graded in this list. Sri Lanka earned a place in the “Second positive group” (called A2) out of seven grades (other grades are A1, B1, B2, C1, C2 and D). The A2 ranking (out of all the seven) is an attractive positioning for Indian investors eager to enter Sri Lanka.
India is one of 28 countries that Sri Lanka has signed a Bilateral Investment Promotion and Protection Treaty with. According to Sri Lanka Board of Investment, India is the fourth largest FDI provider to Sri Lanka in 2005-2017 followed by China, Malaysia and Hon Kong. The cumulative Indian investment in Sri Lanka in 2005-2017 totalled US$ 1.16 billion.

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).

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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.

 

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Casino mogul Ravi Wijeratne takes over MTD Walkers PLC

In a major development in the Colombo Stock Exchange, (CSE) the ownership of MTD Walkers PLC., one of the oldest and largest construction companies in Sri Lanka changed hands for the third time within a period of less than one half years.
One of Sri Lanka’s two casino moguls, Ravi Wijeratne, chairman/owner of conglomerate Rank Holdings has entered in to the construction industry through buying Malaysia’s MTD Capital Bhd owned MTD Walkers PLC, a CSE disclosure said.

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.

They are Commercial Bank of Ceylon PLC, Selyan Bank PLC, DFCC Bank PLC, National Development Bank PLC, Bank of Ceylon, People’s Bank, Sampath Bank PLC and Nations Trust Bank PLC.
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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.

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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.

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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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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.

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French ambassador chooses a Peugeot SUV at Carmart

The French ambassador to Sri Lanka and the Maldives, Mr. Eric Lavertu was ceremonially handed over the keys to the latest Peugeot 5008 SUV by Carmart (Pvt) Ltd recently.

Carmart (Pvt) Ltd is the sole manufacturer and authorized importer/distributor in Sri Lanka for the world-renowned European vehicle brand Peugeot.

Speaking at the event Mr. Lavertu said, "Peugeot is a very successful brand in France and across the globe. It is well known for its versatility, design and durability. It has also won many awards and car races in Europe and all around the continents."

The Peugeot 5008 is an award-winning vehicle globally and has enjoyed great success locally as well. Carmart has seen exponential growth in sales numbers of the top-selling European SUV in its range with the company recording close to 300 registrations in 2018 alone. This makes the Peugeot SUV range the most popular European brand-new SUV range in Sri Lanka.

Speaking at the ceremony, Director/CEO of Carmart Yasendra Amerasinghe said, “the 5008 continues to flourish in the SUV market globally, winning many awards for its engine, durability, practicality, and styling."

"Peugeot SUVs have created a great deal of interest in the market as these vehicles represent outstanding value for money," he added.

The Peugeot SUV range can be experienced at the Peugeot Blue Box showroom at 424 Union Place, Colombo 2, which is open seven days a week.

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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.

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Dentsu Grant Group launches operations in Sri Lanka

Dentsu Grant Group has announced the launch of Amnet, the programmatic expert from Dentsu Aegis Network, in Sri Lanka. Amnet is a trusted source for programmatic buying and audience management solutions. Amnet comprises a team of programmatic experts from the Dentsu Aegis Network, who specialize in programmatic buying, programmatic media planning, data analytics and audience data. Amnet’s mission is to build and leverage data, in order to deliver more meaningfuland personalized messaging insights.

With the launch of Amnet, Denstu Grant Group is once again set to disrupt the status quo of digital advertising through expanding local media inventory and offering more sophisticated, customized campaigns to clients. Among othermarkets, Amnet has a presence in India, USA, UK, France, China and Hong Kong. For the record, Dentsu Grant Group is the oldest serving advertising group in Sri Lanka that was acquired by Dentsu Aegis Network, the global media and marketing communications conglomerate, in 2017.

Speaking on the launch, Shamsuddin Jasani, Group MD, Isobar South Asia and Executive Sponsor AMNET South Asia states, “Sri Lanka’s advertising trends have considerably shifted from traditional to digital advertising behaviour within a short span of time. As a leading global player in digital, we wanted our clients to get the best of global standards in this important area; hence, the decision to bring Amnet to Sri Lanka.”

"It's been an incredible year for Dentsu Aegis Network in Sri Lanka...constantly innovating and disrupting the local advertising industry. After successfully becoming the fastest growing digital agency in the country this year, we asked ourselves, what could we do next? Embracing data is in the DNA of our network and what we have been spearheading here in Sri Lanka as a business. So, we are thrilled to announce the launch of Amnet, one of the premier programmatic platforms available in the world to-date. This is the next wave in media planning and buying in this country and is yet another achievement we can add to our long history of establishing industry firsts," commented Neela Marikkar, Chairperson and Managing Director, Dentsu Grant Group.

"With client needs evolving for quicker turnarounds and data-driven marketing at scale, we needed to get the best of global standards in this important area; hence, the decision to bring Amnet to Sri Lanka. This is head-and-shoulders above anyone else in the market on Programmatic media buying," said Chamith Buthgumwa, Director Isobar, Sri Lanka & Response at Dentsu Aegis Network.

Nisal De Silva, Associate Director from Isobar Sri Lanka, will lead the digital programmatic operations for Amnet in Sri Lanka.

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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.

Mahindra 2

Mahindra 3

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Banking sector maintains its vibrancy in spite of terror attack fallout

Sri Lanka’s banking sector maintains its vibrancy even amidst economic slowdown following Easter terror attacks.

The banking sector in Sri Lanka constitutes 33 banks and maintains assets totaling LKR 11.8 trillion as at end 2018.

The financial system is dominated by the banking sector accounting for nearly 60 per cent of the total assets of the financial system.

At present, the banking sector is mainly funded by deposits accounting for more than 70 per cent of the total assets, whilst shareholders contribute to approximately 8.7 per cent of total assets.

Disagreeing with negative reporting on the bank performances, Prime Minister Ranil Wickremesinghe argued that the Sri Lankan economy has expanded over the last four years, with growth of total public savings increasing by over 80% as reflected in bank holdings.

Speaking at the 80th anniversary of the Bank of Ceylon (BOC), he emphasised that the current economic situation, when compared to that of 2015, was vastly improved.

Presently, four banks of Sri Lanka are ranked among the top 1000 banks in the world, according to the Banker Magazine, UK. Considering the important role played by the banking sector in the financial system and the economy of the country.

The Central Bank continues to introduce prudential policy measures and regulations based on internationally adopted regulations and best practices, to further strengthen the stability and sustainability of the banking sector, as any stress in the banking sector can adversely impact the economy.

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