30 November 2010

NY Times Highlights Sri Lanka’s Contribution to Global Outsourcing - Accountants & Accounting Services BPO

29th November 2010, www.nytimes.com

Southern China has its assembly plants. India has customer support centers, research laboratories and low-cost lawyers.

And Sri Lanka’s contribution to global outsourcing? Accountants — thousands of them, standing ready to crunch the world’s numbers.

As this tiny island nation staggers back from a bloody, decades-long civil war, one of its brightest business prospects was born from a surprising side effect of that conflict. Many Sri Lankans, for various reasons, studied accounting in such numbers during the war that this nation of about 20 million people now has an estimated 10,000 certified accountants.

An additional 30,000 students are currently enrolled in accounting programs, according to the Sri Lankan Institute of Chartered Accountants. While that ratio is lower than in developed economies like the United States, it is much greater than in Sri Lanka’s neighboring outsourcing giant, India.

Offices in Sri Lanka are doing financial work for some of the world’s biggest companies, including the international bank HSBC and the insurer Aviva. And it is not simply payroll and ookkeeping. The outsourced work includes derivatives pricing and risk management for money managers and hedge funds, stock research for investment banks and underwriting for insurance companies.

Many developing countries have “one particular competency that they do better than anyone else,” said Duminda Ariyasinghe, an executive director at Sri Lanka’s Board of Investment. “Financial accounting is that door opener for us.”

With widespread use of English and a literacy rate of over 90 percent, along with rock-bottom wages, Sri Lanka hopes to transform its postwar economy from a sleepy tea and textiles island into a tiny, high-end outsourcing powerhouse.

Already there are thousands of other Sri Lankans working in more common outsourcing fields, like information technology and software development. About 50,000 people in Sri Lanka are now employed in one form of outsourcing or another, according to Slasscom, an outsourcing trade group, and that figure is growing by 20 percent a year.

But accounting is Sri Lanka’s specialty.

During the war, Sri Lankan certified accountants would often use their skills as a springboard out of the country. That is why there are now Sri Lankans sprinkled among executive suites around the world, including the vice president of global business services at American Express and a financial controller at Standard Chartered Bank in the United Arab Emirates.

Now, though, the government and business community hope the country’s young financial whizzes will have reason to stay home instead.

Sri Lanka’s government, headed by President Mahinda Rajapaksa, expects revenue from so-called knowledge-based outsourcing — which includes accounting — to triple to $1 billion in revenue by 2015.

The stark wage differences between Sri Lanka and America, or even Sri Lanka and India, are a big part of the country’s drawing card.

In the United States, the median annual wage for accountants and auditors in May 2008 was $59,430, according to the Bureau of Labor Statistics. Sri Lankan workers in the accounting profession receive an average annual pay package of $5,900, according to a 2010 survey by the Chartered Institute of Management Accountants.

Wages in Sri Lanka for financial outsourcing are about one-third less than in neighboring India, and hiring educated employees is easier in Sri Lanka, according to executives who do business in both countries.

“Skilled talent is accessible,” said Dushan Soza, managing director of the Sri Lanka office of WNS Global Services, an outsourcing company with about 350 people in the country. Because Sri Lanka’s accountants are still a relatively untapped asset on the global market, Mr. Soza said, hiring is easy and turnover is minimal.

In the Indian city Mumbai, companies like his would have to go far out of the city to hire because of the level of competition, he said, but here in Colombo “two miles from my office is my hiring range.”

Many international executives also quietly admit that Colombo’s colonial architecture, excellent seafood restaurants and proximity to miles of sandy beaches make it a more alluring business travel destination than India’s outsourcing centers.

Sri Lanka’s accounting specialty is rooted in the country’s history of colonialism and conflict.

State-financed universities here have traditionally not had enough places for qualified students, and they were often closed intermittently during the war. So students who could afford to attended private schools instead — in many cases accounting schools with British origins that date to Sri Lanka’s independence from Britain in 1948.

Over time, becoming a qualified accountant has become something well-educated, business-minded people in Sri Lanka do in addition to getting a degree in, say, physics or business management.

Now, though, many students choose accounting over another degree. When Nilushika Gunasekera, secured a coveted spot at a public university, she turned it down to go to a privately run accounting school. University students do not get any exposure to a real business environment, she said, and they have several years to “take things easy.”

“I didn’t think going to the university would add value,” she said.

After accounting school, Ms. Gunasekera joined an outsourcing company doing work in cash management and banking. She now works for the Chartered Institute of Management Accountants in Colombo, a trade group.

If the rest of the world discovers Sri Lanka’s pool of low-cost accountants, as the government hopes, the country could lose some of its competitive edge because wages will go up and there may not be enough workers to meet the demand.

But the government is offering various other incentives — including tax breaks, subsidized telecommunications and streamlined procedures for setting up new businesses — meant to encourage international companies to come here instead of India, Eastern Europe or the Philippines.

As foreign companies ramp up their presence here, local developers are building to accommodate them. In a neighborhood thick with tea warehouses and crossed by rail tracks, Jeevan Gnanam is turning the textile mills his grandfather built into a high-tech outsourcing center.

Orion City, as the development is called, is miles from Colombo’s slick World Trade Center skyscrapers, near a canal fringed with rundown buildings and palm trees. But it has already drawn big-name clients, including a division of the publishing giant Pearson and MphasiS, a technology company partly owned by Hewlett-Packard, which has said it will hire 2,000 people here in the next three years.

“Sri Lanka offers us a rich talent base that will allow us to serve our global clients,” said Dinesh Venugopal, chief corporate development officer for MphasiS.

Ultimately, Orion City will have three million square feet of office and retail space, including a 19-story building, said Mr. Gnanam, 28, who is the chief executive of the consortium that manages the development. It was difficult to convince his father and uncle that technology, not textiles, were Sri Lanka’s future, he said, but they have come around recently. Building the industry and attracting foreign investment is crucial, he believes.

“Economic development has to take place,” he said, “for people to put the war in the past.”

Related Info:
Lanka BPO Academy to Train 25,000 Professionals Annually in Sri Lanka

Foreign Currency Accounts for Sri Lankan Overseas Service Providers and Their Employees

High Potential for Wind Power in Sri Lanka. Five New Plants to be Built. 300MW of Power to be Added

30th November 2010, www.dailynews.lk, By Indunil Hewage

The private sector is optimistic of the wind power industry in Sri Lanka owing to its active participation and investments in the industry.

The potential for growth in the industry is enormous with expectation of at least 300 megawatts of wind power being added to the national system within the next three years.

Seguwantivu Wind Power and Vidatamunai Wind Power Chief Executive Officer Manjula Perera said more investments are on to build wind power plants in the country.

Five new wind power plants are to be built with an estimated cost of over US $ 60 million.

D L R Energy and Senok Wind Power plan to built two new wind power plants of 10 megawatts each. The 4.8 megawatts wind power plant by Naladhanavi (Pvt) Ltd, three megawatts wind power plant by Ace Power and 1.1 megawatts wind power plant by Vidullanka are scheduled to be built in the coming months.

In addition to that, three wind power plants of 10 megawatts each developed by Senok Wind Power, Seguwantivu Wind Power and Vidatamunai Wind Power are in successful operation since June 2010.

These plants are located in the Puttalam District. These plants have already added over 40 gigawatts of energy to the national grid during the last six months. Three more wind power plants of 10 megawatts each in the Kalpitiya region is now under construction. These power plants are being built by Pavandhanavi, Powergen Lanka and Nirmalapura Wind Power.

All these plants are to be connected to the national grid of the Ceylon Electricity Board (CEB) by mid 2011. “Public Utilities Commission of Sri Lanka has announced the Non-Conventional Renewable Energy Tariff for 2010 and 2011 on November 25. The tariff has encouraged accommodation of more and more renewable energy power plants to the national grid. With the release of new tariff SPPA’s to be signed by CEB with few more companies for wind power projects totalling to around 30 megawatts,” Perera said.

Potential for wind power generation in Sri Lanka has been identified at various stages in the early nineties. This has been verified by the wind atlas released by National Renewable Energy laboratory of USA after detailed studies in Sri Lanka.

Related Info:
Four Wind Power Plants Add 33MW to Sri Lankan National Grid

India Invests $ 18.2mn in Sri Lanka Wind Power Project

Two Wind Power Plants in Puttalam, Sri Lanka

Senok Opens Sri Lanka's First Commercial Wind Energy Plant in Kalpitiya

Sustainable Energy Authority (SEA) - Wind Projects

Pakistan to Extend $250mn Export Credit Line to Sri Lanka. Pakistan-Sri Lanka Trade to Reach $0.5bn in Five Years

30th November 2010, www.dailynews.lk, By Anjana Samarasinghe and Charumini de Silva

The Trade between Sri Lanka and Pakistan is to reach US $ 0.5 billion within the next five years. Pakistan President Asif Ali Zardari addressing the Sri Lanka - Pakistan Business Forum 2010 yesterday said the two countries have had a good relationship as good friends and partners in the region.

“With the restoration of peace; the sky is the limit for Sri Lanka. This is a unique situation for Sri Lanka to recover. Sri Lanka will recover gradually and Pakistan will sincerely assist Sri Lanka,” he said.

He also called for a barter trade with Sri Lanka rather than depending on dollar-denominated trade.

There should be incentives for foreign investors that make them keep their profits here in Sri Lanka rather than taking out from the country. President also proposed that there should be discussions with high level financial teams from both countries in formulating strategies to support each other. Sri Lanka needs to develop many parts of the country and Pakistan is ready to assist in improving infrastructure of the country. Pakistani companies should visit Sri Lanka to seek investment opportunities and invest, he said.

Industry and Commerce Minister, Rishad Bathiudeen said the bilateral trade between the two countries has improved remarkably.

The total turnover of bilateral trade between Sri Lanka and Pakistan in 2005 recorded US $ 150 million, which grew up to US $ 252 million in 2009. This is a great indication of the strong trade between the two countries.

“It is time that Sri Lanka and Pakistan should further strengthen our bilateral trade agreements while increasing the volumes of trade,” he said.

Sri Lanka recorded an eight percent growth during the first six months of this year, while becoming one of the best performing capital markets in the world. The macro economic fundamentals are stronger and stabilized. The industries, trade and commerce are taking place in a rapid growth; with the investor friendly business environment the country offers great access to the market as well.

The trade ties between the two countries should be enhanced and promoted to have a constant impetus. There are immense potential opportunities in tourism, textile, IT, agriculture, fisheries, telecommunication, leather products, infrastructure, and sports products for the Pakistan investors to venture into. Sri Lanka is one of the most preferred countries for investments especially in the areas of garments, packaging, IT, telecommunication and rubber.

Sri Lankan investors have many opportunities in the power, gas and mining in Pakistan and Pakistan will offer similar incentives to those Sri Lanka offers for these investors Pakistan State Minister and Board of Investment Chairman Saleem Mandviwala said at the Business Forum.

He said that Pakistan will also extend an US $ 250 million export credit line to Sri Lanka to facilitate trade between the two countries.

“We will also bring down more projects to Sri Lanka,” he said.

Air links between two countries will be further strengthened with direct flights and visa procedures will be relaxed to have more access to Pakistan and facilitate more trade and investment among two countries, he said.

“We invite the Sri Lankan business community to explore the business opportunities available in Pakistan,” he said.

Pakistan is the second largest trading partner of Sri Lanka in the South Asian region and the Pakistan, Sri Lanka FTA covers over 4,000 products.

Bharti Airtel Unveils Its New Global Identity in Sri Lanka. First Indian Brand to Go Truly Global

29th Novmber 2010, www.dailymirror.lk

Bharti airtel Lanka, a subsidiary of Bharti airtel, a leading global telecommunications company with operations in 19 countries across Asia and Africa, today unveiled its new global identity in Sri Lanka, following the successful international campaign that commenced in India recently.

The youthful expression of airtel's new identity provides refreshing vitality to global audiences across 2 continents and over 200 million customers. In Sri Lanka, by re-inventing itself in line with the international brand, airtel continues to pioneer quality and reliability of service, breakthrough innovations and unparalleled affordability. Today airtel has emerged as Sri Lanka's fastest growing mobile service provider, delivering an islandwide network in less than 2 years since launch.

Sunil Bharti Mittal, Chairman and Managing Director, Bharti airtel, said "As we race to meet the emerging needs of customers, the unification of our new brand identity across Asia and Africa will enable us to optimize the benefits of a shared worldwide network. Additionally, the new brand identity also gives us the opportunity to present a single, powerful and unified face to our customers, stakeholders and partners around the world.

I believe that this combined scale of efficiencies will support our goal of bringing customers closer to what they truly love in terms of access, device or content".

Amali Nanayakkara, CEO & MD, Bharti airtel Lanka, said "Beyond its positioning as the fastest expanding network in the country, the new international stature of airtel provides unique opportunity to experience a truly global network in Sri Lanka. Coupled together with an unmatchable combination of dynamism, youthful vigour and a pioneering spirit that has already captured the imagination of millions world over, airtel is poised to win the hearts of all Sri Lankans and contribute to its vibrant journey of emerging as one of the most admired brands of the continent".

The new face of airtel is youthful, international, inclusive and dynamic - representing the journey of the first Indian brand to go truly global. The new identity underlines airtel's willingness to embrace everything that is new. The red colour, which is an integral part of the brand, continues to represent the energy and dynamism that has made airtel the success it is today. The new curved addition to the logo is a symbol which will help ensure instant recognition across diverse international markets.

The airtel signature tune has also been refreshed by A R Rahman making it youthful and dynamic in line with the new visual identity. Like the earlier tune, which has made history as world's most downloaded mobile music with over 150 million downloads, the maestro has once again delivered a master piece. The new tune retains the essence of the original but uses an inspiring musical style, with a universal appeal, that will be loved by listeners the world over.

Bharti airtel Limited is a leading global telecommunications company with operations in 19 countries across Asia and Africa. The company offers mobile voice & data services, fixed line, high speed broadband, IPTV, DTH, turnkey telecom solutions for enterprises and national & international long distance services to carriers. Bharti airtel has been ranked among the six best performing technology companies in the world by BusinessWeek. Bharti airtel had 200 million customers across its operations.

Bharti Airtel Lanka (Pvt) Ltd commenced commercial operations of services on January 12, 2009, and now has an aggregate of over 1 million customers. Granted a license in 2007, in accordance with the Sri Lanka Telecommunications Act No. 25 of 1991, it is also a registered company under the Board of Investment in Sri Lanka. Under the license, the company provides digital mobile services to Sri Lanka inclusive of voice telephony, voice mail, data services and GSM based services. All of these services are provided under the Airtel brand.

29 November 2010

Sri Lanka Mobile & Wireline Users Grew by 24pct in Q3 2010

29th November 2010, www.lbo.lk

Sri Lanka's mobile subscribers grew 24.3 percent in the third quarter of 2010 from a year earlier, while fixed access sector grew at a much slower 3.4 percent, official data show. During the past 12 months 3.2 million mobile users have been added according to data released by the Central Bank bringing the total to 16.62 million.

Sri Lanka only has a population of 20 million people, but with five operators competing in the market some people now own multiple subscriber indentify modules (SIM).

By owning multiple SIMs, cost conscious subscribers can get the benefits of different packages.

The government recently said it will limit SIM ownership to five per person, though the exact logic behind the move is not clear.

Wireline users grew by 19,917 to 889,077 in the third quarter, from a year earlier.

Internet and wireless subscribers grew by a steep 50 percent to 360,000 adding 120,000 new subscribers.

Sri Lanka Telecom, the island's only wireline operator said said earlier its broadband users topped 200,000 in the third quarter.

Fixed wireless users grew 3.8 percent (98,177) to 2.65 million.

Related Info:
Sri Lanka Mobile Users Grow by 25.4pct to 15.86mn While Wireline Use Go Down

Sri Lanka Mobile Use Grows 30pct in 1st Quarter

Double-Digit Mobile Growth in South Asia : World Bank

Browns Beach Hotel to be Demolished. A New 200 Room Hotel on the Location in Negombo, Sri Lanka

28th November 2010, www.sundaytimes.lk

The Browns Beach Hotel, one of the landmark tourism beach properties on the west coast, will be demolished by end March 2011 and a new 200-room built on the same location, Aitken Spence Hotels which manages the property said.

“The hotel is about 40 years and needs a change. The Browns Board took a decision to build a new resort on this location which would (probably) go by the same name,” said Malin Hapugoda, Managing Director, Aitken Spence Hotels, adding that it could take about two years to complete construction. According to a statement issued to the Colombo Stock Exchange, the hotel will cease to operate from March 31 after which construction will begin.

It said it was offering a rights issue to shareholders to raise almost Rs 2.2 billion to finance the construction. The rights issue will be on the basis of seven shares for every two shares held, at Rs 65 per share, working out to 33 million shares on offer.

Nestle to Invest Rs 8-10bn to Double Milk Production in Sri Lanka

28th November 2010, www.sundaytimes.lk

Nestle Lanka Plc, Sri Lanka’s largest private collector of fresh milk, plans to invest between Rs 8 to 10 billion rupees in an accelerated growth plan over the next five to eight years aimed at, among other objectives, sourcing all its fresh milk requirements from Sri Lanka.

“At the moment, 40% of the milk for our milk powder (all produced locally) comes from here and the balance is imported, as there is insufficient fresh milk supply. We want to double the number of farmers from over 14,000 whom we collect or buy milk from and thus double production,” Alois Hofbauer, Managing Director, Nestle Lanka Ltd told the Business Times.

“The more milk we buy from local farmers, the better it is for the country,” he said, explaining the company’s plans in the post-war era. The company daily purchases of 125,000 litres of milk through 115 chilling centres and over 1000 collection centres in the country. Plans are underway for extensive dairy development in 2011.

Commenting on the budget in which dairy farmers have been assured a price of Rs 50 per litre from less now, Mr Hofbauer said while the budget looked good and provided more disposable incomes that could ‘set the economy rolling’, local milk prices need to be competitive with world prices otherwise it would cheaper to import milk food.

The Nestle local chief, who was joined by External & Public Affairs Manager Bandula Egodage in the interview, said the company has been aggressively opening chilling and collection centres in the Northeast of the country over the past year.

Mr Hofbauer said there are thousands of stray cows in former battle zones like Killinochchi in which ownership needs to be established and re-domesticated to provide a regular income for people. “Dairy farming is much better than agriculture as it provides a daily income unlike from crops,” he said, adding however that there is a need to lift production from a current 1.2 litres per day per cow against 30 litres per day per cow in the West.

The Swiss-based company has been in Sri Lanka for over 100 years and considers itself more as a local company. “I don’t think the term ‘multinational’ applies to us in the true sense of the word – we are perceived by most of our local stakeholders as a truly Sri Lankan company with a Swiss heritage,” he noted, adding “a considerable portion of our profits are utilized for investments for growth and development.”

This year the company contributed an estimated Rs 2.5 billion directly to the rural economy this year through raw material procurement for fresh milk and coconut products. Last year Nestle paid Rs 4.1 billion in taxes.

Soursop Ice Cream from Elephant House of Sri Lanka. Anoda much in Demand for its Nutritional and Medical Benefits

28th November 2010, www.sundayobserver.lk

Elephant House has always been conscious of the Sri Lankan preference in taste and flavour. Adding to its portfolio of unique flavours, Elephant House launched its Anodha ice cream (using natural soursop) in Sri Lanka last week.

The green, spiky, heart shaped exterior of the soursop may not be appetising, but once you feast your taste buds in the luscious creamy white flesh of the fruit there is no stopping.

Soursop is known in Sri Lanka to be full of nutrients beneficial to human health and is said to contain large amounts of Vitamin C, B1 and B12.

These nutrients are important to help support higher energy levels, emotional stability, and mental clarity. The fruit is also rich in carbohydrates and is said to be a natural remedy for many diseases.

"Soursop ice cream is an extension of the natural based product portfolio of Elephant House and reaffirms our commitment to high quality product and brand innovation," said Head of Frozen Confectionery Elephant House Neil Samarasinghe.

"We know that the new Soursop ice cream will be quickly accepted. Our research shows that the market has been awaiting an all natural ice cream that does not compromise taste." he said.

Image: From left - Peshala Karunarathna - Asst Brand Manager, Russell Perera - Field Sales Manager, Neil Samarasinghe - Head of Frozen Confectionary, Roshanie J Moraes - Sector Head Retail - Executive Vice President JKH Charitha Subasinghe- CEO , Keells Supermarkets.

Sri Lanka Supermarkets to Grow 20pct Annually on Increasing Consumer Purchasing Power

23rd November 2010, www.dailynews.lk, By Indunil Hewage

The supermarket trade in Sri Lanka is expected to grow 20 percent per annum in the years to come owing to increasing purchasing power of the consumers. It is expected that this growth would be apparent from the next year. Richard Pieris Group Director and Chief Operating Officer (COO) Pravir Samarasinghe said the retail market which consists of small boutiques will also record about three to five percent growth per annum in keeping with the Government’s objective to record seven to eight percent economic growth in the country.

The total proportion of the supermarket trade is 15 percent out of the retail industry in the country. The remaining percentage has been acquired by the general trade.

It is expected that the supermarket trade proportion will increase at an unprecedented rate in the future.

“Retaining in the supermarket trade in a profitable manner is a challenging task as it needs more expertise and financial stability to run the trade in a continuous manner,” Samarasinghe said. The prevailing stiff competition among the giant players in the supermarket trade has not attracted newcomers in the market.

In addition to that the high entry cost has also hampered their aspiration to enter the market.

“The Government efforts to double the per capita income in five years will also enhance disposable income of the people creating an impetus to bolster the supermarket trade,” Samarasinghe said.

“During the last couple of years many players who entered the supermarket trade were unable to sustain their ventures, as they were not privileged to enjoy the various advantages reaped by major players in the industry,” Samarasinghe said.

28 November 2010

Tea Tourism at Heritance Tea Factory, the Highest Located Tea Factory now One of the Five Best Factory Hotels in the World

27th November 2010, www.island.lk

The Tea pickers originate the long journey of "two leaves and a bud" into the cuppa, and a large number of tourists are joining them to learn Sri Lanka’s tea culture at a very special location. Picking tea is not a cushy and comfortable job as one may think. Despite their ready smiles and efficient fingers working like a swarm of bees on tea leaves, the Tea pickers brave the sun, rain and winds to earn a livelihood.

Tourists in an effort to gain an insight into the tea plucking culture often pick their own tea leaves when staying at the Heritance Tea Factory. The fresh Tea leaves that the tourists pick go through the Organic Mini Tea Factory and then presented to guests before they check out of the hotel.

Hethersett Tea Factory which is now the Heritance Tea Factory Hotel was the highest located tea factory in Sri Lanka and Kandapola railway station was the highest located railway station in Sri Lanka served by the Ceylon Government Railway when it was first commissioned in 1903.

The Heritance Tea Factory is the fist hotel in Sri Lanka to introduce bio mass renewable energy to the hospitality industry in 2007. The bio mass plant helps the hotel to reduce the carbon foot print as it saves a substantial amount of carbon emissions. Heritance Tea Factory has been recognised by Britain’s leading newspapers ‘Sunday Times’ as one of the 100 best places to stay in the world and ‘The Independent’ selected The Tea Factory as one of the 5 best factory hotels in the world.

The Heritance Tea Factory mission is to enable guests to experience a unique interaction with nature and the tea culture, while leaving a minimum impact on the environment.

Colombo Stock Exchange to Double Market Cap to $20bn by 2012

26th November 2010, in.reuters.com, By Shihar Aneez and Ranga Sirilal

Sri Lanka plans to double the Colombo Stock Exchange's market capitalisation from the present $19.8 billion over the next two years by listing companies partly owned by the state, the central bank governor said on Friday.

Speaking at a Reuters forum in the capital Colombo, Governor Ajith Nivard Cabraal said that will ensure there is enough liquidity for foreign investors to take part in the Indian Ocean island nation's post-war economic revival via equities.

Many institutional investors and funds trying to catch a piece of the growth in Sri Lanka's $42 billion economy since the end of a civil war in May 2009 have shied away from the share market, because of its small size and lack of free float.

"We are targeting a few billion rupees through listing companies which have a government stake," Cabraal said. "Some big companies partially owned by the government may be listed."

He also said that one or two privately-held conglomerates and other large family businesses are headed toward listing.

"This will probably double the capitalisation," Cabraal said.

Sri Lanka's share market capitalisation is at 2.2 trillion Sri Lanka rupees ($19.8 billion), having doubled in the first 10 months of 2010, with local investors and state-owned funds surging into shares.

Foreign investors have sold a net 27.3 billion rupees in shares this year, with most offshore interest having been focused on government treasury securities which still offer an attractive yield in the wake of the global financial crisis.

But the limit on foreign holding has been reached, leaving investors searching for other ways to get exposure.

Sri Lanka is also aiming to double its per-capita gross domestic product to $4,000 by 2016, and that means the banking sector's lending capacity has to be more than doubled to achieve that, Cabraal said.

"Banks' lending should be more than double to around 4 trillion rupees from the current 1,800 billion rupees in the next five years to double GDP per capita," he said.

Though the government is not considering relaxing a 100 percent tax on foreign property ownership, it has planned to release prime property in the capital Colombo for large outside investors, and to raise money through long-term leases.

Colombo has some of Asia's most valuable and underdeveloped seafront land, owing to a quarter-century civil war that made tourism investment a risky prospect.

"We've agreed to release valuable land where army and defence establishments are located and release them on long-term lease," Defence Secretary Gotabaya Rajapaksa, who is also overseeing post-war urban development, told the forum.

Part of the process involves moving about 75,000 families from slums and shanties in Colombo which are located on valuable state property or road and railway reserves. The plan is to build homes outside the capital for relocation, he said.

"We have to find a way to finance this because it is expensive for relocation, but it is feasible. International, local companies partnering with govt to build 30,000 homes over next three years for slumdwellers' relocation," he said.

(Writing by Shihar Aneez; Editing by Bryson Hull)

Related Info:
Colombo Stock Exchange Returns 124pct upto Oct in 2010

Sri Lanka's Galle Face Area Beachfront Re-Development to Start Immediately

27 November 2010

Luxury Eco Hotel in Dambulla, Sri Lanka by El Greco Hotel Chain

21st November 2010, www.thebottomline.lk

A super luxury ‘country eco-hotel’ is currently being constructed in Dambulla area by Italy-based El Greco Hotel chain, targeting to exploit the maximum from the expected tourism boom in Sri Lanka, providing an unmatched luxury standards Sri Lanka has never seen before.

The hotel is named Agro Eco Green Paradise and it is being developed nearby the South Asia’s biggest rose quartz mountain, Namal Uyana. According to sources, the hotel is expected to be opened for tourists from March 2011.

The Bottom Line was also told that officials from El Greco Hotels have conducted a presentation about the property at the recently concluded World Travel Market in London.

The Green Paradise is expected to come up with facilities and services such as restaurants, villas, swimming pool with bar, gym, spa centre with sauna, sport area to practise cricket, tennis and soccer and a wonderful lake with boats.

According to sources at BoI, the initial investment value of the Green Paradise is around Rs.500million to Rs.1billion. The hotel has 70 rooms and 95 per cent of it would be made out of wood.

The company is believed to be having plans to make this a chain of hotels by constructing a second Agro resort in Marawila.

Currently, there are several star class hotels in Dambulla area including Aitken Spence owned Kandalama Heritance and Amaya Hotel chain’s Amaya Lake Resort.

Colombo Stock Exchange Returns 124pct upto Oct in 2010

25th November 2010, www.news360.lk

Colombo Stock Exchange has returned the best yield for stock investors out of all global stock exchanges up to October this year.

The CSE has brought in a yield of 124% for its investors during the period.

It was followed by stock markets such as Indonesia, Colombia, Philippines and Santiago which has provided returns of 53.5, 48.8, 46.8 and 46.1 percent, respectively.

Citing statistics of World Federation of Exchanges todayszaman.com said the Athens Stock Exchange has depreciated the most out of all stock exchanges between the period of January to October 2010, falling 42.4%.

Despite the high returns during the 1st 10 months of this year, the Colombo Stock Exchange, on the other hand, was down 4.6 percent in October and saw the largest drop.

The Tehran, Osaka, Tokyo and Luxembourg stock exchanges all fell in October — 3.5, 2.6, 2.2 and 1.6 percent, respectively.

Sri Lanka to Issue Multiple Entry Visas to Investors

26th November 2010, www.news.lk

Sri Lanka Government considers issuing of Multiple Visa for investors and businessmen as the govt. gives top priority for investment. The Budget 2011 proposed last week has introduced several concessions to promote foreign Direct Investment.

The Central bank of Sri Lanka has already relaxed exchange control regulations in this regard. The Controller of Exchange has relaxed exchange control rules allowing foreigners to invest in rupee denominated debentures issued by local companies. The new rule also permits the local firms borrowing from foreign sources and the procedures and documents required in order to complete the process have been prepared by the Central Bank of Sri Lanka.

Permission is also granted for foreign companies to open businesses in Sri Lanka and foreigners on tour or businesses in Sri Lanka can open accounts in foreign currency.

According to Immigration rules every foreigner who visits Sri Lanka for the purpose of business or investment on several occasions within the overall period of visa can apply for a Multiple Entry visa valid for three months at a Sri Lankan Mission abroad by submitting required documents personally.

The Multiple Visa will be issued as an alternative to the tourist visa being issued for all immigrants.

The Economic Development Minister Basil Rajapaksa has said investors visiting this country frequently for either business or investments use tourist visas for a long period. They had to give false information to visit the island.

“President Mahinda Rajapaksa is very keen to help investors and settle their problems regarding investments. The Budget also aims to increase foreign investments in the country. The President proposed several positive suggestions that will be favorable for all investors,” he said. “We will implement all positive proposals spelt out in the Budget soon,” the Minster said.

Industries and Trade Minister Rishad Badiudeen, Ministry Secretary Thilak Collure, Sri Lanka Export Development Board Chairman Janaka Rathnayake and Tourist Board Chairman Dr Nalaka Godahewa also attended the event.

Related Info :

Sri Lanka Offers Special Visas to Investors, Professionals & Senior Citizens - My Dream Home & Resident Guest Visas

26 November 2010

BOI to Continue but Will Promote Mega Projects. To Advertise Land & Abandoned Factories Shortly

23rd November 2010, www.sundaytimes.lk

Sri Lanka’s Board of Investment (BOI) will advertise about 40 vacant slots in the BOI zones and 15 abandoned apparel factories by next month in a bid to source investors for them, its chairman Jayampathi Bandaranayake said at a post-budget meeting organised by accounting firm KPMG on Tuesday.

He told the Business Times on the sidelines of this meeting that the BOI will not be abolished but continue as an agency which will mainly promote mega projects and not small ones, as it has done in the past. (DEC)

Related Info:
BOI Communiqué - Posted on 10th November 2010

Blue Sapphire on the Engagement Ring of Prince William is from Sri Lanka

25th November 2010, www.news.lk

Speculation on the origin of the oval blue sapphire on the ring that gave Kate Middleton is now over.

This ring is the same one as given by his father, Prince Charles at his engagement to Lady Diana Spencer in 1981. It is now known that the oval blue sapphire adorning this ring came from Sri Lanka.

This ring is the most talked about engagement ring in the world today, revealing a sparkling contribution by Sri Lanka to the grandeur of Britain's royal heirloom.

The blue sapphire alone is 12-carat while the 14 solitaire diamonds clustered elegantly around it are set in 18-carat white gold which had cost £28,500 (45,000) USD at the time of purchase three decades ago. Before the Princess of Wales’s death in 1997, the ring was valued at more than £250,000 because of its connection to the royals, and in particular Princess Diana.

Sri Lanka Unit Trusts Attract Rs1.5bn New Funds in First Ten Months of 2010

26th November 2010, www.news.lk, By Charumini De Silva

During the first ten months of this year the Unit Trust industry has attracted new funds over Rs 1.5 billion. The total funds under management are Rs 17 billion as at October 31 this year.

Speaking to Daily News Business Unit Trust Association of Sri Lanka (UTASL) Treasurer P Asokan said the industry was also able to collect around Rs 300 million every month during the past three months.

The growth funds recorded an average performance of 90 percent to 100 percent on year-to-date while the balance funds recorded 70 percent to 95 percent growth year-to-date.

The main advantage of this year’s budget to the Unit Trust industry was that the Government permitted direct foreign investments to any Unit Trust fund. Unit management companies will take up this opportunity and market their products overseas.

He said individual investors would be in a position to reap the benefits of the stock market through Unit Trusts. The Unit Trusts are professionally managed by fund managers and they have well diversified investment portfolios which provides a significant growth in the medium to long-term.

“Prior to the budget foreign investors were permitted to invest in growth funds provided they add a maximum investment restriction of 20 percent in Government securities. With the budget 2011 foreign investors can now invest in income funds, balance funds, growth funds and also index funds,” Asokan said.

He said with the interest rates expected to remain low, Unit Trusts provide an alternative investment for the investor to reap benefits of the returns available in the capital market.

“Therefore, we believe public will realize that they are dependent on interest rate would be futile.

It is good timing that the public should look for alternative investments to achieve a real rate of return. Thus, Unit Trusts could mobilize and attract these investors into the funds, which are managed by the professional fund managers,” he said.

“With Colombo Stock Exchange (CSE) performing well the Unit Trust industry has noticed that new investments are increasing especially in balance funds and growth funds. However with the slow interest rate regime there is a slow growth in the income funds,” Asokan said.

Related Info:
The Unit Trust Association of Sri Lanka - Member Companies

Unit Trust Prices - Market Prices, Sri Lanka

Sri Lanka NDB Aviva Investment Plan for Capital Security with Higher Returns from Stocks

Sri Lanka's NAMAL Acuity Value Fund Makes Progress

Ceylon Financial Sector Fund Invests in Banking & Insurance Sector which Outperformed Share Market in Sri Lanka

Sri Lanka’s First Private Equity Fund to be Set up by Calamander Group with a Targeted Internal Rate of Return of 30pct

Saudi Arabian Heraymila Investments of Al Mashal's Start a Fund to Invest in Listed Sri Lankan Companies

Leopard Capital LP to Launch a Fund Focussed on Sri Lanka

Developer Tao in Colombo to Present Final Phase of $350mn Havelock City Project

25th November 2010, www.island.lk

Chairman of Overseas Realty (Ceylon) PLC, S P Tao will be in Colombo in the first week of December to present the designs for the final phases of the Havelock City project, the company announced yesterday.

"This presentation is envisaged to include development plans for the remaining six residential towers, the Clubhouse, Sri Lanka’s largest and most modern shopping mall as well as plans for office towers and a hotel. As anticipated, after completion, Havelock City will change Colombo’s skyline unlike any other development project which has been undertaken to date," it said.

The project is estimated to cost US$ 350 million, of which US$ 40 million has already been spent.

"The internationally known real estate developer who heads Singapore’s Shing Kwan Group, is the majority investor of Overseas Realty, with a wide range of large real estate developments within its portfolio internationally. These include Marina Square and the Gateway Building in Singapore, the Shanghai Mart in Shanghai, China and the World Trade Center in Jakarta," Overseas Realty said.

"Overseas Realty is the single largest foreign investor in Sri Lanka with its investment in Colombo’s iconic World Trade Center and now Havelock City. Havelock City is being developed on the single largest cleared site in Colombo spanning over 19 acres and consists of both commercial as well as residential components. Phase One of Havelock City comprising Park and Elibank Towers is already complete, with a majority of the 226 apartments sold and residents already in occupation," it said.

25 November 2010

Newsweek Highlights Sri Lanka as a Luxury Tourist Destination for a Much Varied Holiday

20th November 2010, www.newsweek.com

The road from Colombo to Kandy was a traffic jam of cars, tuk-tuks (three-wheeled taxis), and buses—along with the occasional cow—so we didn’t arrive at Mackwoods’s Labookellie Tea Estate until after dark, missing the scenic hills and waterfalls of Sri Lanka’s central highlands.

The next morning, when we opened the doors out to the patio, my friend Oleg and I were greeted not only by the stunning, terraced hills, but also by the strong, rich fragrance of tea coming from the thousands of surrounding bushes. We spent the morning strolling the grounds of the plantation and taking a tour of the tea factory. (The company makes its own brand of tea and sells wholesale to companies like Lipton). Then I had an in-room massage. Not a bad way to start a holiday.

Opened to guests last year, the three luxury bungalows on the estate are just a few of the upscale plantation properties—including rubber, coconut, and palm oil—that Taprospa (a subsidiary of the Mackwoods Group) runs across Sri Lanka.

It’s a good time to get in on the action. Since Tamil Tiger rebel leader Velupillai Prabhakaran was killed by government troops 18 months ago, effectively ending Sri Lanka’s decades-long ethnic conflict, the country has seen a boom in tourism. The number of annual visitors remained stagnant at about 400,000 for the past decade, but this year has seen a 46 percent increase. More than 700,000 are expected to visit in 2011.

According to Nalaka Godahewa, the chairman of the Sri Lanka Tourism Board, the number of new hotel rooms will also rise by 30,000 by 2015. Hotel chains such as Shangri-La have already plotted out sites in Colombo, while Four Seasons and Hyatt have expressed interest in creating luxury properties on the island. “There has not been any investment in the north and east of the island in the last 30 years because of the conflict,” says Godahewa. “But these are some of the most beautiful areas of the country, and investment is coming.”

Godahewa credits word of mouth for the increase. What struck me most vividly—aside from the high quality of the roads rebuilt since the conflict ended—was how varied a Sri Lankan holiday can be. After we left the cool hills of the central highlands (which this summer became the country’s seventh UNESCO World Heritage site), we traveled to sticky Sigiriya, an ancient rock fortress renowned for its fifth-century frescoes.

The town’s proximity to the ancient capitals of Polonnaruwa and Anuradhapura—home to several of the world’s largest stupas (moundlike structures that house Buddhist relics) and a sacred bodhi tree grown from a sapling of the tree under which Buddha was said to have found enlightenment—makes it a favorite spot for tourist accommodations.

One of the most stunning properties is Vil Uyana, built on a man-made private nature reserve. Each of the villas extends into the marsh and features plush open-plan bedrooms with a huge shower (we had a resident frog in ours) and tubs that resemble plunge pools. In the evenings we sipped cocktails in the “library,” a porch built onto the marsh, and in the mornings, a crocodile lurked just above the water looking for breakfast.

Nearby is Minneriya National Park, where tourists can take open-jeep safaris to see more than two dozen species of reptiles, 160 species of birds, and 24 species of mammals including leopards—Sri Lanka is home to the world’s highest concentration of the cats—and Asian elephants. Our tracker put our chances of seeing an elephant at “100 percent,” but I was a bit skeptical. I needn’t have doubted him; every July through October, as the water supply starts to dry up, several herds of elephants—there are an estimated 800 in the park—gather near the man-made reservoir built during King Mahasen’s reign in the third century to drink and graze on the grasses. At one of the more waterlogged areas we saw about 60 elephants of all ages and sizes gathered together.

We ended our holiday at the beach. There are several plush new boutique hotels and villas along Sri Lanka’s southwestern coast. We hunkered down at Reef Villa—opened two years ago by an Anglo-Irish couple—that offers prime real estate on the beach at Wadduwa, where king coconut trees permanently bend toward the ocean. The owners scoured India and Sri Lanka for amazing antiques, including 19th-century campaign beds, and each of the seven villas has a fabulous outdoor shower and bath. On the morning of my birthday, the entrance to our villa was decorated with balloons. Later, we went for a walk on the beach and passed a man riding an elephant. Turning older couldn’t have been any more spectacular.

Sri Lanka Targets $20bn in Exports by 2020

25th November 2010, www.dailymirror.lk

The Minister of Industry and Commerce Rishad Bathiutheen launched into a head start post budget 2011 by summoning all commercial officers posted abroad under the Ministry of Trade and Commerce, for a focussed strategy development workshop stemming from the budget of 2011 and the detailed strategic export development plan of the country that the ministry had architectured for the next five years.

The Minister requested that by end of the five day workshop, an actionable new model needs to be in place to achieve 20 billion dollars in export revenue by the year 2020.

He also advised that all stakeholders' perspectives as represented by officials from the Department of Commerce, Export Development Board, Board of Investment of Sri Lanka, Sri Lanka Tea Board, Sri Lanka Tourism Promotion bureau, Trade Chambers and Sri Lankan exporters should be taken into account so that the proposals in budget 2011 could be ably supported by the private sector.

"You are expected to develop your annual action plan to achieve the set targets for the year and your respective markets. I will personally evaluate your performance," said Minister Bathiutheen.

Given that Sri Lanka is now a 'new economic development model' the new model of development requires the trade officers to be proactive rather than reactive so that Sri Lanka will be seen as a new country that is a hub for commercial activity he said. This includes a diversified product portfolio from Sri Lanka that caters to the emerging entrepreneurial opportunities of the Sri Lankan exporters. On behalf of the government the minister thanked the Centre for promotion of Imports from Developing countries (CBI), Netherlands and the EDB for jointly organising the event.

Related Info :

Sri Lanka's EDB for more Agressive Entrepot Trade

24 November 2010

Sri Lanka's Galle Face Area Beachfront Re-Development to Start Immediately

24th November 2010, www.lankabusinessonline.com

Sri Lanka is expecting up to 500 million US dollars of investments on a key beachfront re-development in Colombo with the first project to take off as early as next week, finance ministry secretary P B Jayasundera said.

Development of the Galle Face area, Colombo's most prominent beachfront, is part of a large plan to redevelop Colombo, he said.

The government is declaring the Presidential Secretariat, the Treasury and the Galle Face Hotel as heritage buildings and a military camp in the area would be shifted Jayasundera told a seminar organized by the Institute of Chartered Accountants of Sri Lanka.

"Next week in fact that investment will take place," he told the forum.

Jayasundera said investments of around 400 to 500 million US dollars were expected on a hotel and shopping complex.

He declined to name the first investment proposal but said other investors could also submit proposals.

A government committee is entertaining proposals to develop Colombo and hotel, shopping mall and apartment development by Hong Kong-based Shangri-La group has been approved, according to recent reports.

Sri Lanka's Urban Development Authority also wants to develop land around D R Wijewardene Mawatha, a key road in Colombo, a little inland of the beachfront bordering a freshwater lake.

Another project involving state-run Co-operative Wholesale Establishment which has land by the freshwater lake in the area and an international firm has also been received by the government, according to officials.

Jayasundera said up to 400 hectares near Galle Face will be reclaimed from the sea by the Sri Lanka Ports Authority and roads will be expanded in Colombo to take up the new projects.

Related Info:
Experts Endorse Reclaiming of 500Acres from sea off Galle Face, Colombo, Sri Lanka for a Commercial City

Shangi-La Hotel in Colombo Sri Lanka Military Sports Ground

Sri Lanka's Otara to Design for a UK Jean Retailer. Odel CEO Awarded the Best Entrepreneur at Stevie Awards, New York

24th November 2010, www.dailynews.lk

A UK based jean retail company has selected Sri Lankan entrepreneur Odel CEO Otara Gunewardene to design a new jean with her name as the brand.

Commenting to Daily News Business Gunewardene said she’s extremely privileged and excited about the Otara jean. The Otara brand jeans will be available in the international market.

“Selecting my name as a brand and giving me the opportunity to design the Otara jean is an achievement of my family, my team and Sri Lanka,” she said. She was awarded as the best entrepreneur at the Stevie Awards in New York recently.

Belgium Investors Want more Marinas in Sri Lanka

24th November 2010, www.dailynews.lk

The Belgian delegation who is currently in Sri Lanka for closer economic cooperation said that they were impressed by the way the Board of Investment’s response to their investment proposals.

“We came to Sri Lanka with an open mind and our intention was not to enter in to contracts immediately, but to explore the possible investment options.

The process will continue for a few more months and we are pleased with the progress made so far,” a potential Belgian investor said.

Belgium is looking at investing in the tourism industry that has tremendous potential and will be contributing positively for its development. “We are willing to be development partners,” he said.

This is the right moment as Sri Lanka is on a rapid development drive. With infrastructure development that is taking place in the country there is a need for marinas to provide related facilities.

Sri Lanka needs at least 10 marinas and this will benefit the country with its port development projects currently under way, he said. The investment, trade and tourism sector growth will provide strong effect that the country will have added advantage.

“The political stability and the conducive environment are plus factor for Sri Lanka and we are taking stock of what we have to do in the near future,” a delegate said.

A Belgian trade and investment delegation consisting of 40 companies in the fields of agro-food, machinery, construction, interior, energy, fisheries and gems.

Related Info:
Belgium Trade & Investment Delegation in Sri Lanka for Belgium Week 2010

China & Capital Markets are Sri Lanka's Top Lenders in 2010

24th November 2010, www.lankabusinessonline.com

China has become Sri Lanka's top bilateral lender up to September 2010, displacing Japan both in commitments and disbursements, with international capital markets dwarfing traditional lenders with a billion dollar bond a month later.

Sri Lanka has racked up 2,481 million US dollars in bi-lateral and multi-lateral financing up to September 2010, the highest ever volume of foreign financing commitments, with China leading the way with 668 million US dollars of export credits.

This year China had displaced Japan, the traditional top lender in both commitments and disbursements, up to September 2010, according to finance ministry data.


But China's credits were dwarfed by international capital markets this year, with the government raising one billion dollars through a 10-year bond, largely for debt repayment in October.

Japan came in second with a commitment of 424.3 million US dollars including 27.7 million US dollars of grants, the Asian Development Bank came third with 369.7 million US dollars and Russia came in fourth place with a 300 million US dollar credit line.

World Bank had committed 217.8 million US dollars. Iran had committed 111.2 million US dollars in export credits and Australia 105.2 million US dollars.

The finance ministry said this year's financing commitment volume topped the previous high of 2,221.7 million US dollars reported in 2009.

The government was now sitting on an aid pipeline of 6,968 million US dollars which included 1,156.6 million dollars for power and energy and 1,701 million US dollars for roads and transport, 887.3 million US dollars for water supply and sanitation.


Up to end-September a total of 1,460.3 million US dollars of commitments were disbursed.

In actual disbursements also China led the tables with 643.7 million US dollars of which 545 million US dollars were export credits, according to finance ministry data.

The disbursements were swelled with a 445.5 million US dollar trance given to state-run Ceylon Electricity Board to build a second stage of a 900 Megawatt coal power complex. The power plant is a high return, long overdue project.

Japan disbursed 237.1 million US dollars.

The Asian Development Bank had disbursed 187.1 million US dollars including 17.2 million US dollars and the World Bank 120.5 million US Dollars.