Sri Lanka - Your Investment Destination
Transcript of Sri Lanka - Your Investment Destination
Content
• Location
• Target sectors for Japanese Investment
• Why Sri Lanka
• Market access
• Market Potential
• Location
• Labour
• Infrastructure
• Factor cost
• Business environment
• Natural resources
• Japanese Investments in Sri Lanka
• HSBC report
• Opportunities
• Key sectors in the economy
• Top 10 Investments in Sri Lanka
• Board of Investment of Sri Lanka
• A Little Story
• Island Nation of 65000 sq. Kilometers
• Population of 20 Million
• Literacy Rate – 92%
• System of Government
Democracy
Executive Presidency
Parliament consists of 225 members
Elections every 06 years
• The Law is based on British Law
• Never defaulted on international debt obligations
• The War with the Terrorists is over.
Sri Lanka
Target sectors for Japanese Investment
• Electrical and Electronics
• Rubber based products
• Auto parts
• ICT
Special Tariff Preferences for Sri Lankan products
• Indo-Lanka FTA - 4,232 products (zero duty)
• Pakistan-Sri Lanka FTA - 4,686 products (zero duty)
• EU GSP + - 7,200 products (zero duty)
Why Sri Lanka?
MARKET ACCESS
Why Sri Lanka?
MARKET ACCESS Contd…
Products
Exporting from Japan
Indo-LankaFTA
Pak-LankaFTA
EU GSP +India Pakistan EU
Rubber based products 10%
5%,10%,20%,35% 8% Nil Nil Nil
Electronic and Electrical
7.5%5%,10%,20%,35%
Nil Nil Nil
Automobile & Motor Spare Parts
10% 35%Nil Nil Nil
Why Sri Lanka?
MARKET POTENTIAL (USD Bn.)
India Pakistan EU
Rubber Based Products
1.82 0.37 66
Electrical & Electronic
Equipment
22.45 3.78 570
Parts & Accessories of Motor Vehicles
2.33 0.16 144
LABOUR FORCE
• 49.8. % of the population - Men 67.8%, Women 33.4%
• Steep learning curve
• 2nd highest pool of members of the Chartered Institute of Management Accountants (CIMA) of the UK
• World class reputation in the production of the high end garments and lingerie markets.
Why Sri Lanka?
INFRASTRUCTURE- Colombo AirportPassenger movement
5 Mn / Annum
Cargo movement250,000 tons / Annum
Highest number of flights to India from any country
New Airport inthe Southern Region
Why Sri Lanka?
• Gateway to the Indian subcontinent
• Port expansion - 9 Mn. TEU’s
- 12 new berths
- US$ 1.6 Bn. project
• New port being constructed at the South Eastern tip of Sri Lanka.
World Port Ranking
• No. 1 in South Asia
• Total container throughput 4 Mn. TEUs
• Transshipment cargo 70%
• 33 major shipping lines
• 14 feeder services
Why Sri Lanka?
INFRASTRUCTURE - Colombo Port
INFRASTRUCTURE Location - Colombo Port Contd…
Sea Routes
Centrepoint on the
East/West sea routes
Gateway to the Indian
subcontinent
Why Sri Lanka?
Chennai - 2 Days
Kolkatta - 2 Days
Cochin - 15 Hrs
Mumbai - 4 Days
Tuticorin - 8 Hrs
Karachi - 3 Days
Indian Sub Continent
Japan
Yokohama - 9 Days
Australia
Sydney - 11 Days
Europe
Amsterdam - 18 Days
Middle-East
Bahrain/UAE - 5 Days
USA
New York - 21 Days
Dubai
New York - 5 Days
Singapore - 3 Days
U.K.
Southampton - 14 Days
Felixstowe - 14 Days
Thames - 14 Days
Port Transit Time
Port Transit Time
Port Transit Time
INFRASTRUCTURE Transit Time - Colombo Port Contd…
Why Sri Lanka?
INFRASTRUCTURE - Telecommunications
International Operators
Maxis Telekom Telekom Malaysia Bharti Airtel - India Telia AB Sweden Hutchison Whampoa HK VSNL/ Tata Millicom Singapore Telecom
• Most advanced in South Asia
• 3.5 G Mobile Service launched
Why Sri Lanka?
• Fiber Optic Cables with – SEA-ME-WE III – SEA-ME-WE IV
(Connectivity Bandwidth - 1.32 terabits per second)
SEA-ME-WE IV
fiber cable network
Why Sri Lanka?
INFRASTRUCTURE – Telecommunications Contd…
INFRASTRUCTURE - Power
Pipeline Projects
• Trincomalee Coal Fired Project (500 MW)
• LNG Power & LNG Terminal
Main Power Sources
• Hydro - 45%
• Thermal - 55%
Under Construction• Norochcholai Coal Fired Project (300 MW - 2010, Additional 600 MW – 2013)
• Upper Kothmale Hydro Power Project (150 MW - 2012)
Why Sri Lanka?
Factor costsJapan Sri Lanka India Thailand Vietnam China
Labour – Shop floor Managers
3061-3542 112 - 170 135 - 312 232 - 361 79 - 126 192 - 290
4466-6580 309 - 768 520 - 1020 1234 - 2050 391 - 736 995 - 1655
Power – Business (per Kwh)
0.109 0.15 - 0.20 0.10 - 0.11 0.08 0.049 - 0.056 0.08 - 0.09
Water - Business (per cbm) 0.40 0.45 1.54 0.29-0.48 0.28 0.30
Office rent (per sqm)22.0 – 39.6 9.82 21 - 28 19.6 55 34
Housing 2782 - 4637 1500 2048 - 3200 1962 4168 2570 - 3420
Telephone - Local (per min.)International (per min.)
24.35 0.0053 - 0.030 0.03 0.10 0.002 - 007 0.03
5.4 0.64 0.92 1.80 1.21 - 1.44 2.2
Internet (Broad band monthly charges)
41.97 71.76 76.79 27.00 186.3 34.5
Why Sri Lanka?
(USD)
Source : JETRO survey
Our Business Environment
Total Foreign Ownership
No restrictions on the Repatriation of Earnings
Safety of Foreign Investments Guaranteed by the Constitution
Commercial Law is based on British Law
Strong Interlectual Property law in line with IPO regulations
National Treatment is guaranteed
Signatory to the Multilateral Investment Guarantee Agency (MIGA) of the World Bank.
Why Sri Lanka?
Our Business Environment (contd….)
Investment Protection (over 20 Countries)
• Australia
• Belgium
• Canada
• China
• France
• Germany
• India
• Indonesia
• Japan
• Korea
• Luxembourg
• Malaysia
• Netherlands
• Pakistan
• Singapore
• Thailand
• UK
• USA
Why Sri Lanka?
Double Taxation Relief (over 30 countries)
• Belgium
• Canada
• China
• France
• Germany
• India
• Japan
• Jordan
• Korea
• Malaysia
• Netherlands
• Pakistan
• Saudi Arabia
• Singapore
• Thailand
• UAE
• UK
• USA
Why Sri Lanka?
Our Business Environment (contd….)
Natural Resources
• Tea, Rubber, Coconut
• Spices
• Mineral sands
• Phosphate
• Fishing grounds
• Gems
• Oil and Gas deposits
Why Sri Lanka?
Japanese Investments in Sri Lanka
• Cumulative Investment - US$ 350 Mn
• Number of projects
(In operation) - 60
• Employment - more than 12,000
Major Japanese Investors
Company Activity
Noritake Lanka Porcelain (Pvt) Ltd Porcelain table ware and fine casual ware
Colombo Dockyard (Pvt) Ltd Ship building and repairing
Colombo Power Power plant
FDK Lanka (Pvt) Ltd Magnetic heads for floppy disk drives
Tos Lanka (Pvt) Ltd Electronic components
Tropical Findings (Pvt) Ltd Costume jewellery
Okaya (Pvt) Ltd Electronic components
Hong Kong Bank (HSBC) Report
• The Civil war is finally over, boosting confidence and leading a rush to invest in Sri Lanka.
• We think there are great untapped opportunities, however many challenges remain.
• The end of the war has brightened the country’s growth prospects ; we look for GDP to average 4% (up from 3.2%), accelerating to 6% in 2010.
• In our mind, the country has great potential to develop Tourism and BPO, not to mention, to attract FDI in to the manufacturing sector.
Highlights from HSBC Global Research dated 25th May 2009
Other Opportunities
Roads
• Colombo –Kandy Expressway 100Km - US$ 500 M
Power
• Development and Improvement of Transmission Systems - US$ 250 M
• Medium and Low Voltage Network Development - US$ 100 M
• Rural electrification - US$ 130 M
Railways
• Upgrading of Colombo –Matara Railway line - US$ 150 M
• Matara – Kataragama Rail extension - US$ 250 M
• Kundasale /Dambulla/ Habarana new railway line - US$ 200 M
• Eastern Railway Lline Rehabilitation - US$ 35 M
Other Opportunities Contd…
Special Economic Zones
• Trincomalee Export Processing Zone - US$ 80M
Tourism
• Kalpitiya Tourist Resort - US$ 300M
• Nilaveli , Passikuda, Arugambay Tourist Resorts - US$ 100M
Township Development
• Greater Trincomalee Development Phase 1 - US$ 150M
• Panchikawatte Triangle Development - US$ 180M
Public Private Partnership (PPP) projects
Other Opportunities
• Refinery
• Investments in the North & East in the sectors of Agriculture. Vocational Training schools, Fisheries, Dairy Development & Tourism
PPP Projects
Projects
within B.O.I.
Estimated
Investment
( US$ )
1 Development of Knowledge City – Henegama 100 Mn
2 Augmentation of Water & Wastewater Facility – Seethawaka Industrial Park 8.5 Mn
3Development of Textile Manufacturing Zone/Industrial Park at Perth Estate,
Horana.30 Mn
Projects
facilitated for
other agencies
Estimated
Investment
( US$ )
2Development of Modern Bus Terminal at Bastian Mawatha (UDA / Sri Lanka
Railways)80 Mn
3 Transworks Towers at Pettah (UDA/Central Bank) 200 Mn
Apparel/ Textile
• Major contributor to economy • Apprx. 44% of the total exports• Pioneer in Green factories
World-class Sri Lankan companies include:
• MAS Holdings• Brandix• Hirdramani
Software Industry
• A highly literate workforce
• Easily trainable & strong analytical skills
• Low levels of attrition
• High linguistic adaptability
• Leading companies include Millennium Technologies, Virtusa, IFS, hSenid
BPOs
Our Success stories
• HSBC• WNS• OfficeTiger/ RR Donnelly• Amba Research
• World’s 2nd largest pool of UK-licensed Financial Accountants
• Connected to SEA-ME-WE 3 & 4 fiber optic network
Gems & Jewellery
One of the fastest developing gem cutting and finishing centers in the world
Main importers are USA, Switzerland, Thailand, Hong Kong, Japan, France, Germany, Singapore and Indonesia.
Key investors
• Blue Diamonds• Colandiam• Tropical Findings• Paradise International
Tourism
Focus on up market tourism Many opportunities for investors
• Tourism related infrastructure• Theme parks• Air, rail or water based transportation• Thematic tours and trails • Golf courses
Showcase hotels:
• Kandalama Hotel• Saman Villas Hotel• Elephant Coridor• The Fortress
Rubber Sector
• World’s largest manufacturer of solid rubber tyres
• A growing contributor to manufactured exports• Leading international glove supplier
Our Success stories
• Ansell - Australia• CEAT - India• Loadstar - Belgium• Trelleborg - Sweden
Top 10 Investors
Name of Enterprise Nature of Business Country
1 Dialog Telecom Cellular Telecom Network Malaysia
2 Srilankan Airlines Airline UAE/Sri Lanka
3 Tigo/ Celltel Lanka Cellular Telecom Services Luxembourg
4 South Asia Gateway Terminals Port Development UK, Netherlands, USA
5 Loadstar Solid Rubber Tyres Sweden
6 AES Kelanitissa Power Generation USA
7 Holcim Cement Switzerland
8 Prima Group Flour Bran & Pollard Singapore
9 Overseas Reality Property Development Singapore
10 Lanka IOC Petroleum (Retail) India
The Board of Investment of Sri Lanka
Functions
• The Principal Agency for Promoting, Approving , and Facilitating, Foreign Direct Investment (FDI)
• Created by an Act of Parliament.
• Significant Powers - To Grant Exemptions from :
» Corporate Tax
» Customs Duties
» Exchange Control
• Operates 12 Export Processing Zones
• Liaises between Investor and Ministries / Line Agencies / Other Approving Authorities
Incentives
• Granting of Tax Holidays from 3 - 15 years depending on the Investment category.
• Duty Free Imports : Capital Goods and Raw materials
(for Export Oriented Activities)
Capital Goods only
(for all other categories)
• Exemption from Exchange
Control : For Companies that export goods and
Services (Minimum 80%)
and / or
For companies receiving earnings in Foreign Currency (Minimum 80%)
The Board of Investment of Sri Lanka
Best Investment Promotion Agency in South Asia
- World Bank/IFC
• The Global Investment Promotion Benchmarking 2009 study conducted by World Bank/IFC has ranked the Board of Investment of Sri Lanka as the best in South Asia for investor promotion and facilitation.
• BOI received a score of 64 out of 100, increasing its score by 29 points mainly due to its improved website, www.investsrilanka.com
• In the latest issue of Global Investment Promotion Benchmarking 2009, the BOI Sri Lanka, has been described as the only “Good” performing Investment Promotion Intermediary (IPI) in South Asia.
FDI Trends and Projections (2001-2010)
82181 171 233
287
603734
888
601
1000
0
200
400
600
800
1000
1200
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
US$ Mn.
A Little Story !!!