30 December 2010

Ippantivu and Velli Islands Leased under Kalpitiya Integrated Tourism Resort Project (KITRP) for Five Star Resorts

30th December 2010, www.dailynews.lk, By Harshini Perera

Two islands namely Ippantivu and Velli were leased under the Kalpitiya Integrated Tourism Resort Project (KITRP) recently for which investment was mainly from foreign investors.

Cube Lanka Leisure and Sun Resort are the two interested companies who bought these islands in Kalpitiya, Kalpitiya Tourism Resort Project, Project Director Saman Navaratne told Daily News Business.

Cube Lanka Leisure, will set up a five star hotel with 200 villas. The investment will be Rs 1.7 billion which is financed by an Indian company. The villas will generate 600 direct and 1200 indirect employment opportunities.

“Sun Resort (Pvt) Ltd is an investment of Rs 1.2 billion made by a Maldives and Switzerland party. This will be a five star resort set up with 150 beach villas which will provide 450 direct employment opportunities. There is a possibility of them to set up a underwater structures in the future. The construction period for the Sun Resort will be 30 months,” Navaratne said.

“KITRP will altogether create 5,000 rooms after leasing out 14 islands in the Kalpitiya area and 17 islands in the Puttalam side by keeping Kalpitiya a tourist destination. It will attract one million tourists a year after the project completion. We need to acquire 14 more islands in the future,” he said.

The Palavi Airport that has been functioning as a military airport will be renovated and it will contribute to the improvement of tourism in Kalpitiya area acting as a domestic airport.

It is expected to generate 15,000 direct and 30,000 indirect employment opportunities. Under the KITRP, fishing jetties will be constructed since the project will enhance the living condition of the community as an integrated tourism project.

KITRP called for proposals in August and have already received 12 project proposals. The proposals were mainly from foreign parties and KITRP has sent them for Cabinet approval.

Within the zone a golf course, a race course, a tourism training school, foreign language teaching school, ayurvedic centers and hospitals will be constructed.

“We encourage investors to allocate five percent of a project cost to the benefit of the community.

We need to create leisure space just like Galle Face for local tourists and we have set up domestic and pilgrim resorts in Anavasal with a capacity for 100 visitors,” Navaratne said.

Image: The site of Thoreadya Jetty which is identified as one of the main entry gateway points to the 14 islands of first stage bidding process.

Related Info:
Kalpitiya Development Project - Sri Lanka Tourism

Kalpitiya Integrated Tourism Development Project - Conceptual Master Plan (Updated November 2010)

Sri Lanka Gets $500mn Tourism Proposals for Ten Kalpitiya Islets off North Western Coast

IPOs Raise Over Rs 5bn in 2010 in Sri Lanka. CSE Market Cap Up by 105.84pct, ASPI Up by 99.38pct

29th December 2010, www.island.lk

With bank credit to the private sector slow to pick up during the year, Sri Lankan companies have raised finances for expansion and retirement of debt amounting to over Rs. 5.3 billion through initial public offerings (IPOs) in 2010.

Around 10 companies have listed on the Colombo Stock Exchange this year; raising more than Rs. 5,342.9 million.

Laugfs Gas IPO for Rs. 2.5 billion was the highest public offering while Ceylon Tea Brokers’ IPO for Rs. 28 million was the lowest.

Singer Finance’s IPO for Rs. 400 million established a record after it was oversubscribed by 135 times a few weeks ago. The record was previously held by Odel PLC, where its Rs. 250.5 million IPO was 63.8 times oversubscribed.

Apart from these IPOs, two financial institutions introduced their equity to the stock exchange. Sinhaputhra Finance made an equity introduction of 6,295,893 voting shares at Rs. 75 each and Citizens Development Bank introduced over 39.6 million shares at Rs. 15 each.

The Colombo Stock Exchange is one of the better performing exchanges in the global economy which is still in uncertainty.

Market capitalisation grew by 105.84 percent to Rs. 2,168.8 billion as at December 24, 2010 from Rs. 1053.6 billion a year ago.

During this period, the All Share Price Index grew by 99.38 percent to 6,512 points from 3,266 a year ago. The Milanka Price Index of more liquid stocks grew by 86.27 percent from 3,744 points a year ago to 6,974.

The government announced several proposals in the Budget 2011 to uplift the country’s capital market.

In order to encourage new listings in the Colombo Stock Exchange the government proposes to recognize expenditure related to initial public offerings (IPOs) as deductible expenditure for tax purposes subject to 1 percent of the value of the IPO.

Withholding tax on corporate debt securities will be treated on par with government securities.

Re-insurance commissions and claims from VAT would be exempted from Withholding tax to reduce the transaction cost of insurance. In order to promote unit trusts to mobilize savings the government proposes to exempt them from the Economic Service Charge.

Exchange control restrictions on foreigners and foreign funds investing in unit trusts will also be exempted.

Income derived by unit trusts from investments in listed debentures and equity is proposed to be exempted from income tax.

The government also proposed to increase the Share Transaction Levy from 0.2 percent to 0.3 percent, in the absence of a capital gains tax in the country.

HVA to Set up a Unique Tea Extraction Plant. Explores New Markets with Tea based Products

30th December 2010, www.dailynews.lk, By Charumini De Silva

HVA will set up an unique tea extraction plant, one of its kind in Sri Lanka with an investment of Rs 100 million.

HVA Lanka Exports Chairman Rohan Fernando told Daily News Business the company plans to invest Rs 100 million to upgrade the tea extraction plant to a high end commercial venture, Heladiv Innovative Centre, as well as increase the capacity in the tea packaging factory.

The company is planning to officially open the commercial venture Heladiv Innovative Centre during the first quarter of next year.

The tea extraction plant is a novel concept to Sri Lanka as there are no such extraction models available in the country.

HVA is expecting to achieve a 10 to 20 percent growth compared to this year’s performance. “We are targeting to be in a strong and an enviable position on tea exports by mid of 2011,” Fernando said.

The company is fully focused on expanding businesses, while upgrading manufacturing and increasing the capacity.

HVA is expecting to capture new markets with tea based products such as iced tea, body care, horticulture, pharmaceuticals and other healthcare products, as the demand for tea based healthcare products are increasing rapidly and it is a niche market.

Fernando said there are many opportunities to develop new products based on tea. However, most industrialists engaged in the tea industry have not thought of this side as they have only focused on traditional tea export markets.

“Value-added tea products have a huge potential in the international arena. HVA has done research and development on, product profiles, feasibility studies on markets and the consumer behaviour,” he said.

They are also planning to launch a tea boutique franchise in Colombo under the tagline of Heladiv Infini-t. The company has high end tea products in Heladiv tea parlours in China, which caters to a wide range of customers. “The tea parlours in China is a successful business concept of Heladiv and we want to develop a similar atmosphere with Tea boutique concept in Sri Lanka and worldwide,” he said.

At present the company is looking for an ideal format of locations to setup these tea boutiques. “We expect that this concept will emerge in Sri Lanka well in 2011,” Fernando said.

HVA Foods Ltd, a subsidiary of HVA Lanka Exporters will open the Initial Public Offering (IPO) on January 12. The company is all set for the IPO, while expecting that it will have a good response from the public.

FPS Lanka for Operations at Southern Port of Hambantota and Eastern Trincomalee Harbour to Handle Post-war Reconstruction Cargo

29th December 2010, www.lankabusinessonline.com

Sri Lankan logistics firm FPS Lanka is considering setting up offices in the new southern port of Hambantota and in eastern Trincomalee harbour to handle an anticipated influx of cargo flows for post-war reconstruction.

It expects new logistics contracts to be awarded in the first quarter of 2011 as projects get finalised, FPS Lanka managing director Gihan Nanayakkara told LBO in an interview.

The firm is a joint venture between Bertling Logistics India and Famous Pacific Shipping which got together to offer logistics services, especially given the expected increase in cargo flows for post-war reconstruction and growth.

Sri Lanka's 30-year ethnic war ended in May 2009 resulting in an economic boom, with growth forecast to hit eight percent this year, along with a sharp increase in tourists. Nanayakkara said the joint venture is the first time the parent firms are collaborating and the partnership could be extended to other locations if necessary.

Sri Lanka embarked on huge infrastructure projects even before the war ended, with several highways, railways, power plants and high-rise buildings being built along with an airport and port in Hambantota and another port in Colombo.

Hambantota port was opened only a month ago and lies close to the main maritime trade route.

Nanayakkara said Bertling its own fleet of ships, including heavy lift ships, and can provide the specialised heavy lift skills needed for post-war Sri Lanka where such skills are in short supply.

Nanayakkara said the joint venture has access to skilled personnel and equipment in south Indian ports and can take only a few days to mobilise.

The company is also considering business opportunities in the Maldives where a tourism revival means more resorts are being built.

"Every island resort has its own harbour basin which means dredging, a pier, and transport of almost all supplies by air or sea," said Nanayakkara.

In Sri Lanka, while some major projects are under construction many more are in the pipeline with logistics contracts to ship the supplies required expected to be awarded in the first quarter of 2011.

One project the FPS Lanka joint venture supplied was the 300MW power plant in Kerawalapitiya, on the north-west coast.

29 December 2010

Sri Lanka Domestic Airports to be Commercialized under Public Private Partnerships

29th December 2010, www.news360.lk

Sri Lanka says, work towards transforming several domestic airports to commercial airports is now underway.

Secretary to the Ministry of Ports and Aviation Ranjith de Silva said, among those airports ranks Palaly, Trincomalee, Ampara and Ratmalana.

He said, the commercialization of the above Airports will be carried out under the basis of public – private partnerships.

According to De Silva, already a private party has forwarded a proposal showing willingness to develop Ratmalana airport into a commercial airport.

The Government expect investments to come into develop runaways and terminals along with other facilities in the above airports.

Once the Domestic Airports are commercialized, a air travelers to Sri Lanka can directly rchase a ticket to the above airports from any location in the world.

Citing an example De Silva said, “A passenger boarding in in from Heathrow airport can directly purchase a ticket to the Palaly airport”

“He will have to get down from BIA and get into a domestic flight flying to Palaly”, added the Aviation Ministry Secretary.

Shangri La Finalizes Agreement to Construct a Seven Star Hotel in Colombo

28th December 2010, www.island.lk, By Mario Andree

A Hong Kong based hotel chain giant yesterday finalized its agreement with the government to construct a seven star hotel in Colombo.

Sri Lanka Tourism Development Authority, Chairman, Dr. Nalaka Godehewa told the Island Financial Review an agreement was signed yesterday with Shangri La Hotels to construct a luxury hotel in a 10 acres land in the premises of the Defense Ministry.

The project is worth more than US$ 500 million and is a land mark for Sri Lanka as other major hotel chains would follow the footsteps of this agreement.

Shangri La has also shown a keen interest in developing 150 acres of land in Hambanthota which will help the industry boom, he said.

Meanwhile the 10 islets in the North Western cost which attracted 11 bidders are in the process of being shortlisted and its estimate would be more than US$ 500 million.

Next year has been nominated as ‘Visit Sri Lanka’ year and the SLTDA expects more than 750,000 tourists to visit with the number of arrivals expected to grow at 31 percent average.

Dr. Godehewa said for the next year the SLTDA has planed 12 themes for each month promoting the Whole of Sri Lanka as a tourism attraction.

Related Info:
Shangri-La to Invest $500mn on Hotel Project on Main Beachfront of Colombo, Sri Lanka

Sri Lanka’s Security Forces to Move out of Colombo to Make Way for Colombo City Development. Hotel, Casino, Apartment Complexes Earmarked

Reefcomber to Build a Four Star Resort Comprising 150 Rooms and 28 Water Front Villas

29th December 2010, www.dailynews.lk

Hotel Reefcomber is planning to construct a four star resort. The four star resort will be constructed on the "Santhoduwa-Kalpitiya " land containing 78 acres. This will comprise 150 rooms and 28 water front villas facing a 50 meter width waterway that cuts through the land connecting at the end to the sea a statement said.

The exclusive water villas which have individual pontoons giving access to the sea. It is expected to be leased out on a 99 year lease to high net worth individuals.

The company will operate the villas as part of the hotel with the lessees' concurrence.

Luxury Boutique Hotel in Nilaveli, East Coast of Sri Lanka

29th December 2010, www.dailymirror.lk

Esna Villas, a company fully owned by Esna Holdings, has invested in a beach property on Nilaveli beach, Trincomalee with a 144 feet beach frontage. This project, which is valued at USD 1 million, is the company's first foray into the leisure sector.

The company plans to set up an "all suite" boutique hotel on the property with construction already being in progress.

Eshana De Silva, Chairman, Esna Holdings, observed that this project includes a "Presidential Villa" which has a private swimming pool with all the luxury amenities of a Five-Star property. We are very excited as this would be the only project of this kind in Trincomalee.

Sri Lanka has seen a massive influx of tourists after the much anticipated post-war tourism boom. Esna Villas plans to set up similar boutique hotels in other prime tourist locations around the Island. There is little doubt that projects such as these are vital in post-war Sri Lanka.

28 December 2010

New Solar Power Station at Hambantota to Produce 737kw. Solar-Powered Street Lights Considered

27th December 2010, lankapuvath.lk

With the intention of overcoming the power crisis, focus is now on regeneration power sources.

Accordingly, with Korean and Japanese aid, Sri Lanka is to set up a Solar Power station in Baruthankanda, Hambantota said the ministry of Power and Energy.

The power station, which is the biggest solar power generation in Sri Lanka, is expected to produce 737 Kw of energy.

The first stage would be opened next August and the land has already been allocated. Construction is expected to commence in January.

Power and Energy Minister Champika Ranawaka said that the investment for this project would be Rs. 1.7 billion. It would be partly funded by Japan (Rs. 1.2 billion) Korea (Rs. 513 million) and the Ceylon Electricity Board (Rs. 153 million).

Sri Lanka would be able to save 429,000 litres of diesel used for power generation with the completion of the project while it would also assist in preventing the release of 963 tons of carbon dioxide to the environment.

The Ministry also plans to install solar-powered street lights in selected areas.

Related Info:
Solar Energy Can Free Sri Lanka's Dependence on Fossil Fuels - Kanagalingam Gnanalingam, Rtrd Additional General Manager of Ceylon Electricity Board

Sri Lankan Households Can Sell Solar Power to Ceylon Electricity Board. Pilot Project for Domestic Net Metering Started

Ceylon Tea is Set to Set 3 Records in 2010 : Highest Production, Export Earnings & Net Sale Average

17th December 2010, www.news360.lk, By Prasanna C Rodrigo

A leading Tea Broker says, Sri Lanka’s tea industry is set to achieve 3 records during this year.

According to the CEO of John Keells Tea Broking Arm Sudath Munasinghe, the local tea industry will achieve the highest production levels, the highest export earnings and also the highest “net sale average” during the year 2010.

Munasinghe said, “We expect export earnings to reach US$ 1.5 billion in 2010”.

He also predicts, that the total tea production which up to November stood at 302 million kilograms, will reach a record figure of 324 million kilograms at the end of this year.

The previous high was 318 million kilograms achieved in year 2008.

According to Munasinghe, the “net sale average” for Ceylon tea is also expected to reach a record figure during this year.

He said, as of 7th December, the “Net sale average” of Ceylon tea sold at the Colombo Auction stands at Rs. 369.52 per kilogram.

The previous highest “net sale average” achieved was in 2009 recording a sum of Rs. 362.02 per kilogram.

Reasons for the records

The CEO of the John Keells tea broking arm attributes the excellent global market conditions propelled by the increase demand for tea as one reason for this growth.

He said Ceylon tea has got a better price than the Kenyan tea during 2010.

Apart from that good weather and the fertilizer subsidy for tea small holders too has helped the industries growth in 2010, added Munasinghe.

31pct more British Tourists visit Sri Lanka from January to November in 2010

22nd December 2010, ukinsrilanka.fco.gov.uk

According to the statistics, there are 95,320 British tourists have visited Sri Lanka from 1st January 2010 to 30th November 2010 – a 31% increase compared to last year.

According to statistics published by the Sri Lanka Tourism Development Authority (SLTDA), the overall tourist arrivals to Sri Lanka have increased by 47% in 2010, compared to 2009. The total tourist arrivals to Sri Lanka from January to November 2010 were 569,849 of which 17% were British tourists. On Tuesday, 14 December, 2010, officials of the SLTDA waited at Bandaranaike International Airport to welcome the 600,000th tourist to Sri Lanka during 2010. The 600,000th arrival was Mr. Nick Davis, a British national, who arrived with his partner, Leila Diani. They were greeted by the Chairman of Sri Lanka Tourism, Dr. Nalaka Godahewa, and Mr. Malraj Kiriella, Managing Director of the Sri Lanka Tourism Promotion Bureau.

Statistics show that 95,320 British tourists visited Sri Lanka as at 30 November, 2010 and forecasts expect it to pass 125,000 by the end of this year. In 2009 too, 19% of total tourist arrivals to Sri Lanka were from the UK.

The British government eased its travel advice to Sri Lanka in August 2010. It no longer advises against travel to any part of Sri Lanka.

The Consular Section of the British High Commission in Colombo work hard to help British nationals visiting Sri Lanka. They introduced an SMS alert system in April 2010 which informs British nationals arriving in Sri Lanka of the contact details of the Consular section. British nationals visiting Sri Lanka for more than a month are asked to register themselves on the Consular database. The Consular team also actively promotes the importance of cultural sensitivity among British tourists to Sri Lanka, in order to have a fun-filled and incident-free holiday. They publish annual travel advice booklets that outline simple, clear and concise information, covering all bases. They also focus on respect for religion and religious monuments and sites, awareness of local laws and customs and even common sense advice, such as making copies of one’s passport and remaining aware of security risks.

Deputy High Commissioner, Mark Gooding, commented on the increase of British tourists to Sri Lanka. “This is a beautiful country to visit and the historical connections between the UK and Sri Lanka mean lots of British nationals want to come here each year. It is very important for British tourists to read the FCO travel advice before they arrive here. Our Consular team in Colombo is readily available to advise and help British nationals who encounter problems during their stay – but obviously what we want most is to help them prevent unfortunate incidents so they can enjoy their Sri Lankan vacation happily and safely.”

Related Info:
Sri Lanka Tourism Statistics and Tourist Arrivals

27 December 2010

Gartner Research Identifies Sri Lanka as a Leading Emerging Offshore Location

27th December 2010, www.dailynews.lk

Gartner, Inc. has identified the Top 30 countries for globally sourced activities in 2010-2011, each one rated according to ten criteria and found that eight new countries have made their debut in the Top 30. Many organizations that choose to move IT services to lower-cost countries are daunted by the task of determining which country or countries would best host their operations.

“This year the Top 30 countries are exclusively emerging nations,” said Gartner research Vice President Ian Marriott”. As the pace of change is slower in developed countries we have chosen to focus on those locations that are still maturing and developing, domestically and internationally,” Marriott said.

Nine countries from Asia/Pacific were represented in the 30 leading countries, compared with ten in previous years.

Gartners Top 30 locations for offshore services in 2010 in Asia are (in alphabetical order) Bangladesh, China, India, Indonesia, Malaysia, the Philippines, Sri Lanka, Thailand and Vietnam.

“Gartner’s inclusion of Sri Lanka on the Top 30 clearly outlined the potential of Sri Lankan IT/BPO industry. We are pleased to note Sri Lanka is ranked among the top emerging counties for outsourcing by Gartner.” said Slasscom Chairman Dinesh Saparamadu.

“Our focus is to build the industry to become a one billion US$ export industry by 2015 from our current position of $ 390 million. “Saparamadu said.

Related Info:
NY Times Highlights Sri Lanka’s Contribution to Global Outsourcing - Accountants & Accounting Services BPO
Sri Lanka to Promote Finance BPO Services with Investment Professionals Body Tying up with IT Trade Group
Sri Lanka Emerging as a BPO & KPO Centre for Business Support Sevices - IBM Global Location Trends Report

Sri Lanka IT/BPO Exports to Grow by 26pct in 2011 from $ 390mn now

27th December 2010, www.dailynews.lk, By Indunil Hewage

Sri Lankan IT and BPO export industry is currently estimated at US $ 390 million and expected to grow by 26 percent in 2011. During 2009 the industry grew 25 percent from US $ 312 million.

The direct workforce engaged in the IT and BPO industry is estimated to be 35,000. For every IT and BPO employee, there is indirect employment for at least three more people. With indirect jobs, the industry contributes to over 100,000 jobs currently to the economy.

The total workforce with IT and BPO skills is approximately 63,000 people. This includes IT professionals working in non IT industry organizations such as banking, Government and others, The Sri Lanka Association for Software and Services Companies (SLASSCOM) General Secretary Madu Ratnayake said.

The total output of the potential ICT workforce in the country comprises approximately 6000 graduates and about 83,000 diploma holders. In addition, there are about 120 IT and 30 BPO companies operating in Sri Lanka.

“On cost, Sri Lanka is 25 percent to 30 percent cheaper compared to many other sourcing destinations. This is one of the main advantages among our niche focus to build global centres of excellence in several targeted areas,” Ratnayake said. He said English is one of the primary language skills required for a successful career in IT-BPO.

There are many initiatives taken by the companies and the Government to improve IT skills and relevant authorities have to keep at this vigorously.

Internet penetration levels are also expanding rapidly in the country. According to last published World Bank Development Indicators, in 2008 Sri Lanka had over 1.1 million internet users. Ratnayake said for the last ten years, the investments in IT and BPO has largely come from Sri Lankans with international connections or living abroad. With the peace prevailing in the country, there is lot more interest by many companies to set up operations in Sri Lanka. There were several larger companies who set up operations in Sri Lanka during the last year and many are doing due diligence currently.

“There is a large number IT/BPO training institutes in Sri Lanka. The country needs to improve the quality and quantity significantly in the training institutions in the country. As the apex, industry body for IT-BPO, SLASSCOM plays a cartelising role in capacity building. The north and the east areas are considered as key focus areas for SLASSCOM to develop.

As the demand picks up, we need to ensure there is enough people ready to take advantage of the opportunities that comes up. SLASSCOM endorses programs which are of value to get in to a job,” Ratnayake said.

Related Info:
NY Times Highlights Sri Lanka’s Contribution to Global Outsourcing - Accountants & Accounting Services BPO
Sri Lanka to Promote Finance BPO Services with Investment Professionals Body Tying up with IT Trade Group
Sri Lanka Emerging as a BPO & KPO Centre for Business Support Sevices - IBM Global Location Trends Report

Sri Lanka Vehicle Registrations Up 74pct from January - October 2010 after Import Duty Reduction

27th December 2010, www.lankabusinessonline.com

The number of vehicles imported by Sri Lanka continues to surge after a sharp import duty reduction, with new registrations up 74 percent to 284,991 in January - October 2010 from a year ago, latest data shows.

In October alone, the number of vehicle registrations shot up 61 percent to 34,183 from a year ago, driven mainly by imports of cars which zoomed 914 percent to 3,753, according to central bank data.

Vehicle imports have been rising sharply since June, when the import taxes were slashed by the government as economic growth began accelerating after the end of the island's 30-year ethnic war.

Economic growth is expected to hit eight percent this year and government revenue has also risen despite lower import duty owing to the flood of vehicle imports.

According to central bank data, bus imports have shown the sharpest increase this year, as transport activity revived when connections to the north and east resumed after the war and travel picked up.

The number of buses imported during January - October 2010 rose 238 percent to 1,914 from the same period last year.

The number of trucks and other transport vehicles imported have risen by 57 percent to 9,564 over the same period.

Related Info:
Sri Lanka Vehicle Imports Bring Up Govt Revenue after Duty Reduction

25 December 2010

FIA Considers Formula Racing Tracks in Sri Lanka. Jean Todt, President of FIA in Sri Lanka

24th December 2010, www.lankabusinessonline.com

The Federation International de Automobile (FIA), the governing body of world motor sport, is considering setting up two international formula racing tracks in Sri Lanka, the government said.

A statement from President Mahinda Rajapaksa's office said Jean Todt, the president of the International Automobile Federation, had explored the possibility of setting up two motor racing tracks during a visit to the island this week.

Todt, President of FIA and Michelle Yeoh, global ambassador for the “Make Roads Safe” campaign met President Rajapaksa Thursday.

Todt had agreed to consider setting up two international motor racing tracks in Sri Lanka, in southern Hambantota and close to the capital Colombo, the statement said.

The FIA is a federation of more than 160 clubs from over 120 countries.

Image: FIA President Jean Todt looks at cars during a vintage car rally in Colombo December 22, 2010. Todt is on his first visit to Sri Lanka as guest of the Automobile Association of Ceylon, which is celebrating its 106-year anniversary. (Image courtesy www.daylife.com)

24 December 2010

Sri Lanka Sets Up Management Company for State Enterprises Prior to a Listing. State Resource Management Company to Keep Controlling Stake

24th December 2010, www.lankabusinessonline.com, By Jayantha Kovilagodage

Sri Lanka has set up a management company to manage several defunct state enterprises prior to a listing of a partial stake on the Colombo stock exchange, a senior finance ministry official said.

Six state-owned enterprises are to be brought under the newly established State Resource Management Company, B M S Batagoda, director-general of the state enterprise department of the finance ministry told Vimasuma.com, our sister news website.

These are the Embilipitiya Paper Corporation, Kantale Sugar Factory, Lanka Ceramic, Mawanella Rubber Factory, BCC Lanka, and Salu Sala, a state retail chain.

The government plans to subsequently to list shares in the State Resource Management Company on the Colombo bourse while retaining a controlling stake.

The chief value of the government is presently making an assessment of the assets of the six enterprises after which it will decide how many shares to issue and their value, Batagoda said.

The government has already announced it plans to list stakes in the state-owned Sri Lanka Insurance Corp, Lithro Gas, a previously privatised state gas distributor brought back under government control with the buying out of Shell, and Sri Lankan Catering, the profitable catering arm of the loss-making national airline.

Government policy is to retain control of what it considers key state enterprises while listing partial stakes to encourage public share ownership and better management of state assets.

Colombo stock exchange officials have said they expect about 75 initial public offers, mainly by the private sector, in 2011 with about 40 IPOs in the first half of next year alone.

Recent IPOs have been heavily over-subscribed owing to pent-up demand for shares with company earnings increasing and economic growth accelerating after the end of the island's 30-year ethnic war in May 2009.

New Finance Business Act for Sri Lanka for Enhanced Stability of Banking and Finance Sector

24th December 2010, www.dailynews.lk, Charumini De Silva

The new Finance Business Act that will introduced soon will further enhance financial stability while giving more power to the Central Bank.

Central Bank Deputy Governor Dharma Dheerasinghe said the new Finance Business Act will be presented for Cabinet approval on December 29.

The introduction of the new Finance Business Act will provide the Central Bank more authority to regulate the banking and finance industry.

“A stable financial system creates a favourable environment for depositors and investors and encourages banking and financial institutions and markets to function effectively”.

It promotes investment and economic growth, he said.

He said the financial system in Sri Lanka maintained a flexible and capably managed multitude of risks that arose in the dynamic environment.

The industry remained with strong risk management practices in banks and financial institutions. The stability of the financial system helped to continue in line with the development programs of the country.

“It is important to have a well established financial system in the country. We need to focus on new trends in financial markets, basis of allocation of financial responsibilities, importance of financial infrastructure, micro and macro perspectives and global trends in financial supervision as it is vital for the growth of the country’s economy,” Dheerasinghe said.

Banks could create vulnerabilities of systemic nature, partly due to a mismatch in maturity of assets and liabilities.

Maintaining a sound and a steady financial system is dependent on an efficient and resilient banking system since the banking sector is the single most important segment of the financial system.

“Sri Lanka has gained a strong financial stability now and had a positive economic growth. This year the overall macro economic fundamentals continued stronger and Central Bank is confident that it will maintain this growth momentum in the coming year,” Dheerasinghe said.

DSI Group with University of Moratuwa Establishes R&D Unit for Rubber Products following PPP Incentives in Last Budget

23rd December, 2010, www.island.lk

DSI Samson Group recently signed an agreement, with University of Moratuwa and Uni-Consultancy Services to jointly establish a Research and Development unit for Rubber based Products and Process development. The event took place at the University of Moratuwa on 16th December 2010.

DSI Samson Group is a well established diversified Sri Lankan conglomerate and a leading manufacturer and exporter of rubber based products.

The company is aiming at developing its research facility base to compete successfully with the competitors in the international market.

"Government of Sri Lanka has given attractive incentives to the private sector to carry out Research & Development projects through recent budget proposals and we are very keen on getting the best out of the opportunity" said Kulathunga Rajapaksa, the managing director of DSI Samson Group.

He further added that rubber based product manufacturing industry contributes to approximately 5% of the total export revenue of Sri Lanka and the competitiveness of the industry can be improved through Public Private Partnership.

Steep increase in rubber prices during the current year has made the Sri Lankan rubber products highly un-competitive in the global market.

Research and development plays a vital role in maintaining the competitiveness of the local rubber products manufacturers in terms of cost reduction and quality improvement.

23 December 2010

Colombo BIA Airport Passenger Movements Up 26pct with A Sharp Increase in Tourist Arrivals

23rd December 2010, www.dailynews.lk, By Irangika Range

Passenger movements handled by the Bandaranaike International Airport (BIA) has increased by 26 percent recording a total number of 3,860,507 passengers during the period of January to September this year.

This is in comparison to 3,074,687 movements during the corresponding period of 2009. A Ports and Aviation Ministry Spokesman said this is due to the tourist boom and increasing of tourist arrivals from the second half of 2009 in post war in Sri Lanka.

Sri Lanka witnessed a sharp increase in tourist arrivals this year which has continued to rise every month after the restoration of peace. The total forecasted passenger movements for 2010 is 5,248,524 compared to 4,242,356 and 4,642,831 movements recorded in 2009 and 2008 respectively.

Meanwhile, plans are afoot to enhance passenger at the BIA. It has been planned to operate tax free appeal shopping mall facilities at the Katunayake, BOI zone to attract more visitors to Sri Lanka. This tax free shopping mall is located adjacent to the arrivals terminal and is connected by the sky bridge. It is also planned to refurbish the departure and arrival porches to add more elegance to the BIA. Similarly, connecting walkways will also be refurbished to provide an aesthetically pleasing environment. This project is expected to be completed by the end of 2011.

Related Info:
Sri Lanka Tourism Statistics and Tourist Arrivals

DPJ Japan Sri Lanka Friendship Parliamentarian League to Help Set up SMI Ventures as Sri Lanka Plans to Reach $1bn FDI by 2011

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

Japanese small and medium sector businesses are to set up their ventures in Sri Lanka in the near future.

DPJ Japan Sri Lanka Friendship Parliamentarian League Chairman Hirano Hirofumi said the Japanese Government has expressed its consent to establish Japanese small and medium enterprises in Sri Lanka generating more employment opportunities for youth.

He was addressing the media at the hosting of a Japanese Parliamentary delegation by Deputy Economic Development Minister Lakshman Yapa Abeywardana in Colombo yesterday.

The delegation of the Democratic Party of Japan (DPJ), Japan -Sri Lanka Friendship Parliamentarian League visited Sri Lanka to strengthen and bolster mutual ties between Sri Lanka and Japan.

The delegation was led by Japan-Sri Lanka Friendship Parliamentarian League Chairman Hirano Hirofumi.

He requested assistance from the Sri Lankan Government and the Board of Investment to increase Japanese investments in Sri Lanka.

He appreciated the Government’s efforts to develop infrastructure facilities in the Northern and Eastern parts of the country.

BOI Deputy Director General A M C Kulasekera said measures are being taken to increase foreign direct investments.

Sri Lanka targets USD $ two billion Foreign Direct Investments by 2013. It is planned to achieve US $ 1 billion and US $ 1.5 billion FDIs by 2011 and 2012 respectively to achieve an eight to ten percent economic growth in the country.

He stated that cumulative Japanese investments in Sri Lanka is US $ 300 million and so far 60 Japanese companies are operating in the country with BOI approval.

In addition, 26 Japanese companies operate in Sri Lanka. These Japanese companies have managed to create over 12,000 employment opportunities in Sri Lanka while rendering financial support to the ongoing mega development projects.

He said there are ample opportunities in the thrust areas such as electric component manufacturing, fishery, tourism, agricultural, education and skills development areas for Japanese investors to invest in Sri Lanka.

The Sri Lankan Government has also provided incentives to Japanese companies situated in the country. Japanese companies in Sri Lanka will be entitled to export their products to India and Pakistan duty free.

Deputy Economic Development Minister Lakshman Yapa Abeywardana said Japan has been rendering assistance to the country and Sri Lanka expects further assistance and future investments to enhance tourism and industrial development sectors in Sri Lanka.

Japan has also lifted the travel advisories to the Northern and Eastern areas on a request made by the Sri Lankan Government.

Image: Deputy Economic Development Minister Lakshman Yapa Abeywardana and DPJ Japan Sri Lanka Friendship Parliamentarian League Chairman Hirano Hirofumi exchanging a token of appreciation at the media briefing. Picture by Rukmal Gamage.

Colombo Stock Exchange Changes Milanka Index from January 2011

22nd December 2010, www.lankabusinessonline.com

Sri Lanka's Milanka Price Index (MPI) is to be changed from January 03 for the first half of 2011 by adding a conglomerate, hotel and finance company, the Colombo Stock Exchange said.

The new firms included in the index for the period from January 03 to June 30, 2011 are Galadari Hotels (Lanka), Hemas Holdings group, and LB Finance while ACL Cables, Colombo Dockyard and Lanka IOC have been dropped.

The Milanka index, one of the two main indices on the Colombo Stock Exchange, tracks the 25 most liquid stocks weighted on market capitalisation during the previous year.

The other index is the All Share Price Index which indicates the price fluctuations of all the listed companies and covers all the traded companies during a market day.

The composition of the companies in the Milanka Price Index with effect from January 03 is as follows:

Banks, Finance & Insurance
Commercial Bank of Ceylon
DFCC Bank
Hatton National Bank
Janashakthi Insurance
LB Finance
Merchant Bank of Sri Lanka
National Development Bank
Nations Trust Bank
Pan Asia Banking Corporation
Sampath Bank
Seylan Bank

Health Care
Nawaloka Hospitals
Beverages, Food & Tobacco
Distilleries Co. of Sri Lanka

Investment Trusts
Environmental Resources Investment

Diversified
Hemas Holdings
John Keells Holdings
Richard Pieris

Land & Property
Overseas Realty (Ceylon)

Manufacturing
Chevron Lubricants Lanka
Chemical and Pharmaceuticals
Chemical Industries (Colombo)

Telecommunication
Dialog Axiata

Trading
Brown & Co

Hotels & Travels
Asian Hotels and Properties
Galadari Hotels (Lanka)
John Keells Hotels

Related Info:
Revision of the Composition of the Milanka Price Index (MPI) - 3rd January 201 To 30th June 2011

22 December 2010

Sri Lanka is a Holidaymaker’s Paradise - Neeta Lal, A Malaysian Travel Writer

22 December 2010, www.news.lk

Sri Lanka is “Clearly, a holiday maker’s paradise”. The Malaysian Travel Writer Neeta Lal says Sri Lanka is perfect for the global traveler, and offers not only five-star accommodations in great locations but also delightful custom-made ‘experiences’.

She says an elephant ride on a star-lit beach, a champagne-soaked dinner under a star-spangled sky, or a river cruise to view one of the world’s most magical garden retreats are products available for tourists in Sri Lanka.

Describing her stay at Vivanta at Taj Resort in Bentota, the writer points out that nothing, it seems, is impossible to organise at the Resort in Bentota, a stunning, ocean-fronted property located on Sri Lanka’s southwest coast, the hotel is situated over a sinuous hill and offers 162 modern rooms with private sit-outs that overlook lush gardens and a glutinous Indian Ocean.

Writing about one of her excursions during her visit, Nita Lal says that the excursion took her to the enchanting 15-acre estate of Lunuganga, an exquisite piece of property that is a tropical rendition of an Italian garden. Fringing Deduwa Lake, and it is one of the world’s most magical garden retreats complete with statues, courtyards and lily ponds that flank secret pathways.

It was followed by a boat safari on the River Madhu, and the boat glided on the shimmering water, coursing through thick mangroves and rich flora and fauna. She also describes viewing the primitive style of fishing and prawn trapping still practised by the island’s inhabitants.

Neeta also praises about facilities available in Sri Lanka including rejuvenating massage and scrub available at Spas, state of the art fitness centres, the delicious food, spice infused curries and stews Sri Lanka is famous for, fine hotels, water sports activities, well connected road network to Colombo, and ayurvedic treatments.

Related Info:
Sri Lanka Tourist Arrivals in 2010 to Reach 600,0000 Today. November Arrivals An All Time High Record for a Single Month

Sri Lanka Welcomes Senior Foreign Nationals - Sri Lanka, My Dream Home Programme

Virtusa (NASDAQ:VRTU) in FinTech 100 List. Financial Services Technology Company was Founded in Colombo Sri Lanka

22nd December 2010, www.dailynews.lk

Virtusa Corporation has been recognized by American Banker, Bank Technology News and IDC Financial Insights on the 2010 FinTech 100 List. The list, currently in its seventh year, ranks the most successful financial services technology vendors around the world based on their calendar year 2009 revenue from financial services.

This marks the third time in four years that Virtusa has been honoured in the ranking.“The FinTech 100 List has established itself as a significant point of reference in measuring success within the financial services industry, and we are extremely honoured to be recognized on this year’s list,” which they must comply, and Virtusa has the domain expertise Virtusa Chairman CEO Kris Canekeratne said.

“Financial institutions today are facing an increasing number of challenges to help companies solve these challenges and achieve measurable business results,” he said.

Virtusa partners with some of the world’s largest banking and financial services companies.

Related Info:
Virtusa Named to Deloitte's Technology Fast 500 List

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

Sri Lanka to Sell 10yr Sovereign Bonds upto $1bn in 2012

22nd December 2010, www.dailynews.lk

Sri Lanka may sell up to $ one billion in a 10-year sovereign bond in 2012, the year when the island's debut $ 500 million dollar bond matures, Central Bank Governor Ajith Nivard Cabraal said on Tuesday.

"We may sell a sovereign bond in 2012. We are looking longer tenure of at least 10 years and a size of between $ 500 million to $ one billion," he told Reuters, after a tour of the former northern war zone in Mannar.

The amount will be decided according to the requirement of that time.

"Our spreads are getting tighter now. So we can raise money at a cheaper rate than the debut bond. We can also manage the repayment of the debut bond in 2012 without much pressure," he said.

Related Info:
Sri Lanka Dollar Bond Receives Bids over $2.5bn at Likely Yield of 6.375pct

Barclays Recommends Sri Lanka’s Debt over Vietnamese Dollar Bonds with Sri Lanka's Improving Rating & EconomyBank

Sri Lanka Sovereign Strategy Brings Results, Says Central Bank

Intellectual Property Protection for Ceylon Tea under Global Geographical Indicators Rules

22nd December 2010, www.lankabusinessonline.com

Sri Lanka has registered a claim locally for intellectual property protection for Ceylon tea under global 'Geographical Indicators' rules that would help market its main export product, a senior official said.

The government has also registered the logo for ozone friendly pure Ceylon tea to certify its tea is grown without use of any ozone depletion substances, Tea Board director - promotions Hasitha De Alwis said.

"We have to register the GI claim and ozone logo locally with the National Intellectual Property Office before we register them overseas," he told LBO in an interview.

The government also plans to locally register the island's seven tea growing regions under GI indicators in January, De Alwis said.

Sri Lanka has for years been seeking GI protection under the World Trade Organisation intellectual property rights rules known as the Trade-Related Aspects of Intellectual Property Rights (TRIPS).

The industry is keen on getting the GI recognition as it could be used as a marketing tool, like French wines which were among the first products to be registered under the WTO regime.

The seven tea growing areas for which GI recognition is also sought are Nuwara Eliya, Dimbula, Uva, Udapusellawa, Kandy, Ruhuna and Sabaragamuwa, in the island's central hills and southern districts.

The rules for geographical indicators enable registration of products based on defined growing areas as well as distinct product characteristics.

Registration of the ozone friendly pure Ceylon tea logo will help market the product as an environmentally friendly one.

Sri Lanka has stopped using methyl bromide, an ozone depletion substance that had been used in pest management after adopting alternative environment friendly technologies for which it received the 'Montréal Protocol Implementers Award' in 2007.

That allowed the country to market Ceylon tea worldwide as an environmentally friendly and ozone friendly product.

India Sri Lanka Ferry Service to Start in February 2011. 500 Passenger Ferry to be Deployed for 12Hour Colombo - Tuticorin Run

20th December 2010, www.colombopage.com

A ferry service between Sri Lanka and it a neighbor India is to commence in two months, an Indian daily reported.
Following the consent of the relevant ministries of the two countries, the ferry service to Colombo from Tuticorin is expected to begin in two months, The Hindu reported, citing the Chairman, Tuticorin Port Trust, G. J. Rao.

Earlier this month, the India's Union Cabinet approved a proposal for a passenger ferry service between the two countries.

India's Ministry of Shipping has directed the Tuticorin Port Trust to build the infrastructure necessary to begin the ferry service.

According to the Port official, the passenger reinforcements will be completed by the end of this month and adequate arrangements, including waiting room, counters for immigration, customs, cabins for officials and Port Health Officer, and others were being made to ensure facilities for the passengers.

A passenger ferry that can accommodate 500 passengers is expected to be used for the 12-hour journey between Colombo and Tuticorin.

India has improved the infrastructure facilities at the passenger terminal at a cost of nearly 50 million Sri Lankan rupees and has established screening equipment for increased surveillance at the Port.

Officials from India's Immigration, Customs, Coast Guard, Navy, Marine Police and the intelligence agencies have met recently and extended their cooperation to the Port authorities to enhance security, The Hindu reported.

India also plans to revive the ferry links between Thalaimannar in Sri Lanka's northwest coast to Rameswaram in the Indian state of Tamil Nadu.

Initially, the ferry service between Tuticorin and Colombo will be started and the Thalaimannar to Rameswaram service will be added later. The old pier at Thalaimannar will be rebuilt with the Indian assistance.

Related Info:
Sri Lanka Cabinet Approves Ferry Services between Colombo & Turicorin and Thalaimannar & Rameswaram

Indian Cabinet clears Passenger Ferry Service Proposal between India and Sri Lanka
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