Sri Lanka Czech Economic Forum for Enhanced Trade & Economic Cooperation. Minister Basil Rajapaksa & Czech Industry & Trade Minister Martin Kuba Address the First Forum

03rd April 2013, www.dailynews.lk,

A Sri Lankan delegation led by Economic Development Minister Basil Rajapaksa met Czech Industry and Trade Minister Martin Kuba, during the former’s visit last week to the Czech Republic. Environment and Renewable Energy Minister Susil Premajayantha was also included in the delegation.

The delegation attended the opening of the first Sri Lanka-Czech Economic Forum organized by the Confederation of Industry of the Czech Republic. They also met Czech Prime Minister Petr Necas at his office.

Minister Basil Rajapaksa and Minister Martin Kuba addressed the Economic Forum and discussed prospects for enhanced trade and economic cooperation as well as opportunities for joint collaboration in important sectors of the two countries. The vast potential that exists for investment in Sri Lanka for the Czech Republic in areas such as infrastructure, energy, water and environment protection, food processing, sugar industry, leisure, recreation and hospitality, higher education, as well as in the sector of small and medium enterprises was highlighted at the discussion.

Minister Rajapaksa observed the increased potential for Czech tourists to visit Sri Lanka following the expansion of the island’s tourism sector. Both ministers expressed their intention to conclude an agreement on mutual cooperation between their ministries for creating favourable conditions to develop trade and economic cooperation in areas of mutual interest.

The Czech representation handed over a draft of an agreement to the Sri Lankan delegation in this regard.

The Sri Lankan delegation also met Czech Republic’s Environment Minister Tomas Chalupa. They discussed issues relating to the promotion of sustainable energy and protection of the environment and means of cooperating in this area of global concern in international fora.

The two delegations discussed the possibilities of strengthening cooperation in the areas of renewable energy and waste management. Minister Premajayantha visited a waste recycling plant in Prague.

Minister Rajapaksa also met Czech Republic’s Foreign Affairs Deputy Minister Tomas Dub and discussed ways for enhancing bilateral cooperation in the areas of trade, investment and tourism.

Minister Rajapaksa met Czech Republic Vice President Jan Hamacek and Senate President Milan Stech at Czech Parliament. Their discussion centered on enhancing contacts between the legislative bodies of the two countries. They also emphasized the need to increase people to people contact, among other matters of bilateral importance.

Image: Economic Development Minister Basil Rajapaksa addressing the first Sri Lanka-Czech Economic Forum. Environment and Renewable Energy Minister Susil Premajayantha and Czech Industry and Trade Minister Martin Kuba are also in the picture.

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Sri Lanka Ireland Bilateral Trade Up. Sri Lanka Chambers Should Tie Up with Irish Counterparts to Enhance Cooperation

03rd April 2013, www.dailynews.lk, By Shirajiv Sirimane

The Sri Lanka - Ireland bilateral trade volume has demonstrated an upward trend in recent years. “Sri Lanka's major exports to Ireland include garments, retreaded tyres, tea, coconut and leather products. Major imports from Ireland include chemical and plastic products, machinery and pharmaceutical products.

The Sri Lanka Chambers should forge links with their Irish counterparts in a bid to enhance cooperation between the business communities of the two countries,” Consumer Affairs Senior Minister S B Nawinna said.

Speaking at the National Day reception hosted by the Consulate of Ireland, he added that with the dawn of peace in Sri Lanka, tourist arrivals from Ireland have increased in the recent past.

“There is considerable potential to promote tourism between the two countries. ‘It is important that tour operators in Ireland explore Sri Lanka as a tourist destination having a diverse range of attractions to offer.”

“Ireland's contribution towards the advancement of education in Sri Lanka, remains a strong link between the two countries.”

“With the end of the protracted terrorist conflict and restoration of normalcy in Sri Lanka, I believe it is opportune to explore new avenues for the further expansion of our relations in investment, trade, political and education spheres.

“In the post conflict environment, Sri Lanka had already initiated a number of projects related to infrastructure development in the areas of transport, telecommunication, health and tourism.

“There is enormous potential for investments from Ireland and I encourage Irish investors to make use of this positive business environment. “I'm pleased to note that Sri Lankan businessmen and professionals have started businesses in Ireland, particularly in the hotel and education sectors.

“I also acknowledge the contribution being made by Ambassador Feilim McLaughlin, and also Manic Perera, Honorary Consul of Ireland, towards the strengthening of ties of friendship and economic cooperation between Sri Lanka and Ireland.

Feilim McLaughlin Ambassador of Ireland, said that he had up-dated the Irish business community on the opportunities available for investments in Sri Lanka. “We expect even better economic relations in the future,” he concluded.

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First Capital Group Buys a Stockbroking Firm, DNH Financial

02nd April 2013, www.island.lk

The First Capital group is to buy DNH Financial, a stockbroking firm that is a full member of the Colombo Stock Exchange, an official said.

"It is a strategic acquisition," Jehaan Ismail, a group director said. "We are very strong on debt, but we do not really have an equities business."

"This will help our corporate finance business as we will have distribution and a research functions as well.".


The deal is expected to be carried out for around 180 million rupees, a stock exchange filing said.

DNH Financial was owned by Environmental Resources, a firm that is also undergoing an ownership change.

The firm is expected to come under First Capital branding.

Several stock broking firms in Sri Lanka are in the process of being acquired by new investors following a downturn in the market. (LBO).

Market Research Society of Sri Lanka Inauguration with a Presentation on ‘Global Overview of Market and Opinion Research

31st March 2013, www.island.lk

The Market Research Society of Sri Lanka (MRSSL) is set to host a landmark event today (April 1st, 2013, Monday), a presentation on ‘global overview of market and opinion research’, marking the inauguration of the MRSSL in Sri Lanka.

MRSSL was established a few months ago with the cooperation of the leading Market Research agencies in the country. And in its endeavor to ensure that Market Research practice in Sri Lanka is on par with global standards, MRSSL is already registered with ESOMAR, the essential organization for encouraging, advancing and elevating Market Research worldwide. The key note speakers at this historic event are two distinguished persons from ESOMAR - Ms. Helen Parker, and John Smurthwaite.

Ms. Helen Parker is the External Relations Manager for ESOMAR, and her role involves working with the 79 Representatives throughout the world. Representatives serve as ESOMAR’s ambassadors in their local countries. They are part of a global team who further ESOMAR’s mission to promote the value and use of opinion and marketing research.

John Smurthwaite, always a strong ESOMAR supporter, is the ESOMAR Ambassador for the Asia-Pacific region. John was also a Programme Committee member for ESOMAR Asia Pacific conference held recently in 2012. He was the 2011 winner of ESOMAR’s prestigious John Downham award, recognizing outstanding achievement and excellence in his contribution to the market research industry at an international level.

Both speakers will touch upon some of the emerging global trends in the field of market research and the implications for Sri Lanka from a point of view of those who provide Market Research services, as well as to the users of Market Research.

All the leading businesses in the country have been invited for this occasion, and MRSSL is confident that Corporate Sri Lanka would extend their whole-hearted support by participating in this event, and subsequently becoming members of the Society.

Speaking about the event,Ravi Bamunusinghe, President, MRSSL observes, "The Market Research Industry in Sri Lanka is reaching new standards with the launch MRSSL and association with ESOMAR. I look forward to see these changes in the near future together with our stakeholders". Ms. Himalee Madurasinghe, Secretary, MRSSL adds on, "We are extremely fortunate to have Ms. Helen Parker and John Smurthwaite present with us to share their experience in maintaining international standards across the market research world.".

As part of the event, the office bearers of MRSSL will also briefly talk about the ambitions of the Market Research Society in the country.

Colombo Dockyard Celebrates 20 Years of Partnership that Integrates Japanese Values & Western Capitalistic Ideals

30th March 2013, www.island.lk, By Steve A Morrell

Colombo Dockyard provides a unique platform to display Sri Lanka to the world stage, says Mangala Yapa, the company’s MD/CEO.

From small beginnings in 1974, Colombo Dockyard has grown in stature and prominence to make a significant contribution to the national economy, he said at the company’s 20th anniversary celebrations.

"Our contribution is such that we earn foreign exchange in ship building and sea craft. We accept ship building orders from overseas. All this means we earn foreign exchange for the Sri Lankan government", he said.

The chief guest was Minister of Economic Development, Basil Rajapaksa.

Yapa said that since 1974, about 40 years ago, when the company was formed, their decision to forge a partnership with Onomichi Dockyard Company Limited of Japan on or about 1993 augured well. Onomichi’s decision was momentous because it came at a time the Colombo Dockyard was exploring stability and structure.

He said their inspired leadership brought about the stability that was needed to ensure positive progress and put in place abiding Japanese standards that have proved to an invaluable asset to the progress of the company.

"We did not seek publicity for the work we did. But, this year, it is 20 years since our joint collaboration with Onomichi, the occasion is right to project ourselves in a more public stance", the MD/CEO said.

"Our forte has always been ship building and ship repair services. We are proud to have nurtured this special trait from its infancy", Yapa stressed.

Akihiko Nakauchi, Chairman, Onomichi Dockyard Japan, recalled that it was a tactical move on the part of the Japanese in 1993 and it was a defining moment that Colombo Dockyard and Onomichi Dockyard collaborated to form the company. More so, that both countries had special friendly ties that further cemented this partnership.

"In the recent past, we have been successful in carving out certain niche markets. Our expertise is sought after across the globe particularly in the manufacture of sophisticated Off Shore Vessels.’, Nakauchi said.

Special mention was made of the first Managing Director, Ragunathan, who took office in 1974 and also A. K. Diyabalanage, Lal Dassanayake and Valentine Silva, who had contributed significantly to the progress of the Colombo Dockyard.

According to the 20th anniversary publication, initial plans were drawn up when Sir John Kotelawala was Minister of Communication and Works during the 1936 – 1947 era. Sir. Andrew Caldecott was Governor at the time. It was reported the Minister took a personal interest in this project.

Yapa further said "My vision for the future would be a corporate value culture of this nature and to propel Colombo Dockyard to the pinnacle of global marine services".

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Hemas Plans to Build 4th Hopital in Ratmalana Taking into Account Area’s Growing Middle Class

20th March 2013, www.dailymirror.lk

Hemas Hospitals Private Limited, the fully owned subsidiary of Hemas Holding PLC sending a strong signal to sector rivals yesterday revealed plans to construct its next hospital in Ratmalana, taking into account the area’s growing middle class. This will take the total number of Hemas hospitals to four.

Responding to a question by Mirror Business on future plans, Chairman Murtaza Esufally said they had recently purchased one acre of land to the value of Rs.250 million in an area between Ratmalana and Moratuwa for this purpose.

“In fact we see a vast potential in this particular area and a survey carried out prior to the decision too showed the growing middle income earning population which warrants quality healthcare facilities in Ratmalana,” he said.

Speaking on the investment of the project he noted that it will be around US $ 10 million (Rs. 1.3 billion) for a typical 60-bed hospital similar to the one being constructed at Thalawatugoda.

In another interesting revelation, it was indicated that it takes at least 7-8 years to recover the initial investment which is usually referred to as the payback period in Finance. Esufally who was tight lipped on the financial performance (as it is unlisted) however said that Earnings Before Interest, Tax, Depreciation & Amortization (EBITDA), a financial performance yardstick in the hospital sector had been positive throughout.

Hemas Hospitals spent US $ 1.6 million for the 100-bed facility located at Wattala four years ago, followed by another US $ 500 million for the 50-bed Galle hospital and another US $ 1.4 billion for Thalawatugoda facility. Mirror Business exclusive reported on Hemas’ plans to put up hospitals in Thalawatugoda and Ratmalana back in January 2011 even before the start of the two projects.

Ambitious Esufally confided that the company’s plans were afoot to add another 600 beds (about 10 hospitals) touching at least one quarter of the populations’ lives within the next eight years. Esufally who did not rule out the possible expansion in the heart of Colombo said the company’s main strategy was to target the middle income earning category particularly in the suburbs. “Leveraging the four year experience in hospital business, 65 years heritage & the market leadership in the pharmaceutical industry (with a market share of 17-18 percent), we are quite confident that we could in the long run become the market leader in the healthcare sector,” he remarked. Nine months results to December 31 showed the healthcare sector contributing to the group with the highest revenue of Rs. 6.7 billion demonstrating a Year-on-Year growth of 22 percent. The sector bottom line too grew by 33 percent over the same period last year to Rs. 360 million.

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CIC Leverages Research to Anticipate Wants and Needs to Offer Products and Services to Enhance Lives of Its Customers

29th March 2013, www.island.lk

As one of Sri Lanka’s leading blue-chip conglomerates, CIC Holdings PLC is committed to remaining relevant, and has the ability to adapt with the customer and the changing operating environment. To this end, CIC leverages its significant prowess in research to successfully anticipate wants and needs which are constantly evolving, and to offer products and services which enhance the lives of its customers, the company said in a statement.

CIC Holdings is the only company to own and operate seed and soil laboratories, and the company’s seed paddy enterprise has made a significant impact in the local agriculture landscape with the extensive research and trials carried out on the farms, including the introduction of a new variety of rice. The Red Basmati rice has a low glycaemic index, meaning that it releases sugar slowly, making it a healthier option, and is the first to be introduced in the country by any private sector entity.

Strengthening its already existing inventory, a new strain of hybrid corn seed of enhanced quality and yield was registered by CIC during 2011, while over 150 acres of farmland are under cultivation with a premium strain of bananas, which is predominantly marketed locally under the brand "CIC Quality Banana".

CIC Holdings has capitalised on the opportunities presented as a result of research and development and productivity improvement in agriculture. Having achieved self-sufficiency in rice production, the company is now moving on to exporting the surplus available. The development of new quality rice varieties has enabled CIC to target ethnic markets in USA, Australia, and Europe, and afforded the company the ideal positioning to export rice to discerning and accessible markets.

CIC Holdings operates one of the most advanced and most up-to-date tissue culture laboratories in the country. As a direct result of the research conducted at this laboratory, CIC exports over 180 varieties of native Australian plants which are imported and multiplied, and sent back to Australia, as well as tissue cultured ornamental plants which are sent to Denmark.

The company is currently extending their reach to the region, with the tissue culture lab setting up a satellite facility in Bangladesh to augment the processing of certain plant species, specifically targeting the expansion in to Australia in particular.

With Link Natural Products, CIC’s research focuses on methods of bringing customers all the benefits of herbal medicine combined with the convenience of modern Western medicine. Clinical trials conducted on Samahan, Link’s hallmark product, produced highly favourable results which were widely reported in the Ceylon Medical Journal. The trials were conducted amongst a sample consisting of 800 participants who reported on the alleviation of 15 cold and cold-related symptoms after the consumption of Samahan.

The herbal industry relies on plants, most often rare indigenous varieties, which are not always the products of organized cultivation. Therefore, CIC draws on the synergies of its tissue culture laboratory to find solutions for growing certain forest species under controlled farm conditions. With sustainability at the core of its production model, CIC farms utilise the research resources to grow their own requirements without the arbitrary harvesting of natural reserves.

The ability of CIC Holdings to look ahead with a clear plan and focus on the future has been one of the company’s greatest strengths. In this regard, the company has formulated "Plan 2020", which is the Group’s blueprint for its future progress till the year 2020. Whilst simultaneously developing all major areas of business, much of the strategy of this plan will focus on going through a process of research and development.

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Sri Lanka Made a Joint Sponsor in First Ever China South Asia Exposition (CSAEXPO) to be held in Yunnan in June 2013

29th March 2013, www.ft.lk

“We thank you for making Sri Lanka a Joint Sponsor in the first China South Asia Exposition (CSAE) to be held in Yunnan in June. We are currently working on a 150-strong Sri Lankan delegation for this forthcoming international event,” said Minister of Industry and Commerce Rishad Bathiudeen yesterday.

Bathiudeen was addressing the seven-member high profile trade delegation led by Vice Governor of Yunnan Province Ding Shaoxiang.

The first-high level Chinese team to arrive here since the appointment of China’s new Premier Li Keqiang and in less than two weeks since Keqiang’s ascension on 15 March, the delegation is also scheduled to hold meetings with several key figures of Lankan Government before it returns home.
Bilateral trade between Sri Lanka and China stood at $ 2.676 b in 2012, increasing by 19.5% from 2011. Exports to China in 2012 stood at $ 108.12 m. China has now become the largest development partner and an important investor in Sri Lanka.

Meanwhile, bilateral trade between Yunnan Province and Sri Lanka is now reported at $ 37 m (2012).

“We also thank China for its support towards our infrastructure development and more importantly, for giving us the second international sea port and international airport,” stressed Minister Bathiudeen. “China ranks as the third largest supplier to Sri Lanka. In 2012, China exported $ 2.56 b in goods, which is the highest in trade history, however Sri Lanka’s exports to China were only $ 108 m, about 1% of Sri Lanka’s total exports.

This shows that there is yet unrealised export potential at our end, which we can explore jointly.”
Shaoxiang said: “We also believe that there is huge trade potential between the time-honoured friends.

The Chinese Central Council has now upgraded the annual China-South Asia Trade Fair and Business Forum to China South Asia Exposition, which is no more a provincial level event but a national level event, and the first, new edition of CSAE will be held in Kunming starting 6 June. As a step in developing our trade, we invite Sri Lanka to co-sponsor the significant first CSAE in Yunnan’s capital Kunming and also invite strong Sri Lanka business participation at the concurrently held Kunming Fair. We invite Sri Lankan businesses to set up a Sri Lankan Trade Representative Office in Kunming, Yunnan’s capital, for which we have already allocated space in the Yunnan Foreign Trade Tower in Kunming Municipality. Yunnan is the closest Chinese Province to Sri Lanka and is the gateway to the rest of China.”

Shaoxiang added: “We also want to expand our entry in Sri Lanka’s infrastructure. Many Yunnan contractors are active throughout South Asia and all their projects have been commended by South Asian governments. Energy sector, especially hydropower, is a speciality of Yunnan builders. Sinohydro China’s speed in construction of Moragahakanda reservoir has already been commended by the Government of Sri Lanka. In fact, today I have brought with me both the Vice President and Director of Sinohydro Bureau in this delegation to explore more cooperation in the energy sector here.”

Sinohydro, the State-owned project contractor firm with $ 18.26 b global revenues (2011: Chinese Yuan 113.47 b), is the sixth largest construction firm in China and is ranked 23rd among top 225 global contractors, with 12 subsidiaries operating under it.

In 2011, Sinohydro had 2,541 construction contracts in 62 countries across many regions. Apart from its Chinese projects, the group’s global infrastructure project portfolio (which includes BT, BOT and PPP projects) spans across Ethiopia, Sudan, Malaysia, Laos, Qatar, Congo DR and Algeria. Sinohydro is also in real estate, investments, E&M equipment, and engineering consultancy.

During the meeting, both parties also commended the contribution of direct Sino-Lanka air-links towards the development business to business contacts between both economies.

Also present during the meeting were Ministry of Industry and Commerce Secretary Anura Siriwardene, top officials of the Ministry, the EDB, and the Department of Commerce.

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Sri Lanka’s Consumer Electronics & Appliances Imports Showed Robust Growth during 2010 - 2011, but Slowed down in 2012

27th February 2013, www.news360.lk

Sri Lanka’s consumer electronics and domestic appliances imports have seen robust growth during the year 2010 and 2011, but has slowed down in the year 2012, with number of products recording a decline in imports both in value and quantity.

A study conducted by the Ceylon Chamber of Commerce says, the 2010 and 2011 growth was propelled by the overvalued exchange rate coupled with low interest rates and reduction in taxes applied for the importation of those goods.

The study says, the 2012 moderate growth was due to the sharp fall in the rupee, ceiling on credit and increased cost of borrowing.

The value of imports coming under the HS Chapter 84, which covers a large variety of machinery and parts, classified as investment goods in addition to consumer electronics and domestic appliances have recorded a 66% growth in 2011 and 19% in 2012.

“The growth in imports in this category reflects increasing demand for investment goods as well as demand for durable consumer electronics”, added the Chamber in a statement issued.

The Chamber says the expenditure on importation of electronic machinery and equipment coming under HS Chapter 85 has increased by 57% in 2011 and by 18% in 2012.

As a percentage of total imports, Chapter 84 has accounted for 8.2% and Chapter 85 has accounted for 6% in 2012.

The study finds that the decline in consumer electronic items imported in 2012 has been modest compared to the high rate of growth experienced during 2010 and 2011.

However, the Chamber says, the volume imported of most items in 2012 remains well above the annual average volume of imports during 2005-2009.

“For example the number of household type refrigerators imported increased by 267% in 2011 to reach 167,844 units. In 2012 although quantity imported declined by 26%, the volume of imports of 119,923 units is well above the average of less than 50,000 units per year imported during 2005-2009”, added the Chamber in its findings.

While most products analyzed in the report have recorded a decline in imports in 2012, few products have recorded an increase.

These are air conditioning machines, televisions and mobile phones.

During the year 2011, and 2012, items such as fans, rice cookers and mobile phones have exceeded 1 million units imported per year.

The items where imports exceeded 500,000 units per year in 2011 and 2012 are televisions, electric kettles, electric irons and fruit or vegetable juice extractors.

Items that have recorded imports in excess of 100,000 units a year during 2011 and 2012 are fans, household type refrigerators, portable computers, other types of computers, toasters and radio broadcast receivers.

Personal care electronic items such as shavers, hair clippers, hair removing appliances, hair dryers have recorded a modest growth over the years and the number of units imported of each item still remains below 50,000 units a year.

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Pakistan's Arif Habib Group Goes for Commodities and Trade Consultancy in Sri Lanka. A Boost to Bi-lateral Trade

28th March 2013, www.lankabusinessonline.com

Pakistan's Arif Habib group which has a stock brokering unit in Sri Lanka is planning to expand into commodities and trade consultancy which can boost bi-lateral trade, an official said.

In Pakistan he said there was a strong push from authorities for Pakistani businesses to go to Sri Lanka.

"As one of the largest Pakistani groups there are a lot of opportunities," Beg said. "Pakistan and Sri Lanka have had very strong ties.

"The political relationships are very strong, the bureaucratic relationships are very strong. And in every way possible both countries have supported themselves.

"So why can't there be a strong commitment on trade as well."

Beg, who is the son of a group director took over the reins at Serendib Stockbrokers last year and says Arif Habib group is also putting money into stockbrokering, which was the first business, the group when it started.

He says fresh capital has been injected, the balance sheet has been cleaned and the group will continue to put resources to build the business, including with expanding research capacity which will allow Sri Lankan stocks to be marketed through the group's sales desks.

The group has put an application to start a physical wholesale commodity business and bring in one million US dollars.

"We have written to the Central Bank to bring in money to start a wholesale commodity business," Naushervan Beg, who heads Serendib Stockbrokers, a unit of Arif Habib group said.

"We have dedicated commodity specialists in Pakistan who would handle that."

Arif Habib group which started as a stock brokering firm in 1994 in Pakistan has later expanded into asset management, corporate finance and has acquired interests in cement and fertilizer plants and real estate and grown into a 600 million US dollar business.

The idea was still in the preliminary stages, and the commodity business if permission is given, would involve physical storage and trading, will be a separate business, if authorities give permission, he said.

A related group company, Thatta Cement is planning a cement bagging plant in the Hambantota port.

Beg says Sri Lankan exporters have lost some of the markets in they previously had in Pakistan and opportunities existed provided they had the right parties to deal with.

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Yunnan Vice Governor Leads China Trade Mission to Sri Lanka. Bilateral Trade was USD 2.7 Bn in 2012

27th March 2013, www.lankabusinessonline.com

A Chinese delegation led by Yunan province vice governor Ding Shaoxiang is arriving in Colombo today, which will help expand bilateral trade of 2.7 billion US dollars reached last year, the commerce ministry said.

"This visit is a strong boost to the growing Lanka-China bilateral trade," commerce and industry minister Rishad Bathiudeen said in a statement.

Bilateral trade with China rose 19.5 percent to reach 2.676 billion US dollars in 2012. Sri Lanka's exports to China was 108.12 million US dollars.

The six member delegation from Yunan will meet key officials, the ministry said.

India Relaxes Quota on Apparel and Meat Exports from Sri Lanka. Exports Reached USD 720.89 Mn in 2011-2012

27th March 2013, www.lankabusinessonline.com

India has raised a quota of Sri Lanka-made apparel and the validity of a sanitary permit for meat had been doubled giving more freedom for Indian nationals to buy goods from the island.
Free Trade Agreements were then used to progressively give freedom to the poorer people to trade.

Quotas and rules of origins were used as a compromise to give more time for powerful production lobbies to continue to make excessive some profits at the expense of the domestic consumer, allowing authorities to give some liberty to domestic consumers.

Cheaper imports leave more money in the hands of consumers, raising their living standards by expanding the ability to buy other goods and especially services, which can boost domestic output and employment.

The Indian High Commission said the apparel quota relaxation came following request made to visiting Indian commerce and industry minister in August 2012.

In January, at the 8th India-Sri Lanka joint commission meeting it was agreed to double bi-lateral trade to 10 billion US dollars in the next three years.

India said Sri Lankan exports had reached 720.89 million US dollars in 2011-2012 and from April 2012 to December 2012 Sri Lankan exports to India was 528.76 million US dollars.

Sri Lanka last year raised taxes particularly on smaller vehicles, which are bought by less-affluent consumers, which come primarily from India.

The Indian High Commission (embassy) in Colombo said, there would be no sourcing requirement for fabric for up to eight million pieces of fabric exported from Sri Lanka each year from the current five under the Indo Lanka Free Trade Agreement.

The validity of a sanitary import permit (SIP) for processed livestock products had been extended to one year from the current six months.

The high commission said on September 06, 2012, export tax for Sri Lankan made fabric was cut to 5.0 percent from 11.0 percent under the South Asia Free Trade Arrangement.

Citizens of India and Sri Lanka traded freely in ancient times and Sri Lanka was part of a 'Silk Route of the Sea' that was at time controlled by India based empires and later by European powers.

After independence from British rule and the rise of economic nationalism rulers of both countries raised trade barriers and reduced the ability of their citizens to trade freely and the entire South Asian region lagged behind the rest of the world except Africa.

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Venture Engine Offers Real Opportunity to Sri Lankan Entrepreneurs by Creating a Platform to Pitch Their Ideas to Potential Investors

01st March 2012, , www.ft.lk

Venture Engine, a project aimed at creating ‘real opportunity’ for Sri Lankan entrepreneurs and providing a boost to the country’s emerging economy by promoting and supporting entrepreneurial spirit, was launched yesterday.

“With the economy set to grow, the time is now to foster entrepreneurship,” declared Blue Ocean Ventures Ltd. Managing Director Prajeeth Balasubramaniam yesterday.

The project, conceptualised by Blue Ocean Ventures and the Indian Angel Network with the participation of Dialog Axiata PLC and Expolanka Holdings, creates a platform for entrepreneurs to pitch their ideas directly to potential investors while receiving comprehensive mentoring.

Said to be the first of its kind in Sri Lanka, the project is modelled on the Indian Angel Network, India’s first, and Asia’s largest, business angel network. The Indian Angel Network invested Rs. 1 billion in India last year, and brings budding entrepreneurs together with nearly 200 successful entrepreneurs and CEOs. “We don’t have enough of anything,” he claimed.

Dialog Axiata Group CEO Dr. Hans Wijayasuriya, citing Dialog’s small beginnings and Sri Lanka’s lack of a  “next step” between entrepreneurs who have good ideas and investors, stated: “Behind the future of seed investment, Dialog will help in whatever way.”

Expolanka Group CEO Hanif Yusoof added: “I am pleased that the journey has begun.”

According to Blue Ocean Ventures Chairman Rajan Anandan, Venture Engine is looking to assist not only entrepreneurs who have an idea and require seed capital and mentoring support, but also existing start-ups that require capital and advice for expansion.

Indian Angel Network President Padmaja Ruparel stated that the ‘Angel Investors’ would invest their time, networks and money. They will mentor entrepreneurs as well as open up clients and opportunities, she said.
Benefits to participants include access to mentoring and the opportunity to pitch business concepts and tie up with leading entrepreneurs and venture capitalists. The program also offers media exposure to all selected participants and start-up gifts to the top three places.

As of 1 March, an ‘open call’ has been made for entrepreneurs to submit applications for the program, with a submission deadline of 7 May. Applications must include a business summary, venture stage, required investment, value proposition, sales strategy, competitive analysis and risk strategy.

Thereafter, a panel of leading Sri Lankan and Indian businessmen, entrepreneurs, and investors will whittle the candidates down to 10. On 29 May, the 10 candidates will present their proposals and the field will again be cut down, this time to five. The five remaining candidates will have access to workshop sessions and will work towards the finale on 20 June, where the top three candidates will receive their start-up gifts.
The entrepreneurs’ ideas will be judged on uniqueness, marketability, the service offered and the financial forecast. The entrepreneurs will be judged on selling skills, self motivation, attitude, flexibility and willingness to take risk.

However, according to Ruparel, Venture Engine should not be thought of as a “business competition,” but as a platform for “cultivating the entrepreneur”. She went on to say that the biggest value created would be the “entrepreneurial spirit”.

Balasubramaniam echoed this sentiment, claiming that the “cash prizes are insignificant in the overall picture,” and that while the top 10 will have access to the business angels in India and Sri Lanka, if an investor liked the 20th application, then the investor could pursue that project.

As participating investors will be taking significant risk, they will acquire a stake in the companies. Citing an illiquid market in Sri Lanka, Anandan foresaw only a few methods for investors to withdraw their money from successful companies, including a strategic acquisition by another company, a buyout by the entrepreneurs or a buyout by other venture capitalists. The panel stated that investors engaging with entrepreneurs would not take a majority stake or seek to control the companies.

“Hopefully in the next few years we will see a transformation in how start-ups and entrepreneurs are viewed,” noted Anandan, adding that there were lots of opportunities out there.

Image: Blue Ocean Ventures Managing Director Prajeeth Balasubramaniam (second from right) briefs journalists yesterday. Others from left are Blue Ocean Ventures Chairman Rajan Anandan, Indian Angel Network Board Member Sunil Kalra, Expolanka Group CEO Hanif Yusoof, Dialog Axiata Group CEO Dr. Hans Wijayasuriya and Indian Angel Network President Padmaja Ruparel. Pic by Kithsiri de Mel.

Japan Ups Sri Lanka Auto Market Share with Hybrids. India's Share Down to 45pct. China Third with 5pct

01st March 2012, www.lankabusinessonline.com

Japan has increased its share in Sri Lanka's auto market to 36 percent from 33 percent in value with a surge in hybrid vehicles, amid a boom coming after a cut in taxes, Sri Lanka's main business chamber said.

The Ceylon Chamber of Commerce said in an analysis of the auto market that market leader India's share has in terms of value had fallen to 45 percent to 51 percent. China was third with 5.0 percent.

The value of imports had increased to 219 billion rupees from 117 billion rupees.

The CCC said 57,886 cars and were registered in 2011 up 11 percent while 525,421 vehicles of all types were registered in 2011, up 32 percent from a year earlier including over 250,000 motor cycles.

In 2011, 5,927 hybrid vehicles were imported up from 438. "This growth momentum is likely to continue with the increase in fuel prices," the Ceylon Chamber of Commerce said.

"Japan is the leading supplier of hybrid vehicles into Sri Lanka in almost all categories of vehicles except for cars of cylinder capacity exceeding 2000 cc (cubic centimeters), where Germany is the main supplier."

Transport between 5 to 20 tonnes have risen over 10 fold to 48,384 to 4,359. India supplied 91 percent of the total followed by Japan at 15 percent.

The Chamber said motor cars of less than 1,000 cc engine capacity had grown 222 percent partly helped by Tata Nano cars.

More than 100,000 petrol driven three wheelers have been imported in 2011. Diesel three wheeler lagged are there are only 20,000 in the country. The chamber said 99 percent came from India.

Sri Lanka’s FMCG Sector Shows Rapid Growth. Valued at Rs 141bn in 2010. Food & Beverage Including Cigarettes Account for 74pct

06th February 2012, www.news360.lk

Sri Lanka’s Fast Moving Consumer Goods market has seen a rapid growth over the years, says a new equity research report.

The report says this has created fierce competition among manufactures, who are trying to provide quality products at a normal price range for the local consumers.

The report compiled by Bartleet Religare Securities also says, according to the available data, Sri Lanka’s FMCG market weighed at Rs. 141 billion during the year 2010.

It says, out of this portion 74% is captured by the Food and Beverage sector which also includes the consumption of cigarettes.

The report discloses that personal care and home care compete closely with a market share of 15% and 11% respectively.

BRS points out, that despite the growth in the FMCG sector, its traditional dependence on imported goods has slowed down as local manufacturers are substituting with equally good products.

The study reveals that in comparison to neighboring countries like India and Thailand Sri Lankan consumers on average shop at least four times a month.

“Increasing population in a country backed by strong per capita income growth would also influence consumers to buy more frequently”, adds the BRS report.

It says, Sri Lanka has a higher per capita income in comparison to other SAARC countries which it points out is said to increase to USD 4,000 by 2016.

The research finds that according to 2009/2010 official data, expenses of a household in Sri Lanka runs up to around Rs. 32,446 and out of that 40% is dedicated to food and drinks.

The balance, the report points out is distributed between various segments in the likes of housing, fuel and lighting, health care etc.

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Sri Lanka, A Good Place to Invest - IESC Vice President. Higher Returns on Investments Compared to the United States

05th February 2012, www.sundayobserver.lk, By Lalin Fernandopulle

Sri Lanka is a good place to invest as returns on investments are high compared to the United States said International Executive Services Corp (IESC) of USA Vice President Charles Conconi at a ceremony to ink a partnership between IESC and the American Chamber of Commerce (AmCham) to promote foreign direct investment from USA.

He said Sri Lanka’s infrastructure development is conducive to invest and added that IESC will encourage US businessmen to invest in Sri Lanka. Foreign direct investment inflows exceeded its target of$ 1b last year as there was an influx of investment in the tourism sector.

The FDI reached $ 1.07 b by December 2011 and the Government targets $1.75 b investments this year. Sri Lanka received 236 million US dollars in foreign direct investments in the first quarter of 2011.

Tourism apparels and the IT sector were among the key contribution to the growth.

Conconi said the new initiative will help Western economies to focus on Asian supply chains which have expanded operations due to the global demand.

The landmark agreement will boost US FDIs to Sri Lanka which are vital to enhance productivity and economic growth.

IESC is a loan originator for the Enterprise Development (EDN) , a program sponsored by the Overseas Private Investment Corporation (OPIC), an agency of the United States government. OPIC works with the US private sector and helps businesses to gain a foothold, in emerging markets catalysing revenues, jobs and growth opportunities in countries. AmCham President Vijaya Ratnayake said that the critical challenge for Sri Lanka is to increase FDIs to boost productivity and economic development.

“Sri Lanka is targeting an eight percent economic growth rate this year for which an investment growth of 35 percent of the GDP is essential”, Ratnayake said.

The economic growth forecast of 8.3 percent this year was lowered to 8 percent given the slow global economic growth expected this year.

OPIC provides investors with financing, guarantees, political risk insurance and support for private equity investment funds. The Corporation will finance up to US$ 250 million for projects in Sri Lanka. Ratnayake said the SME sector will be a key beneficiary of the partnership.

Political risk insurance for currency iinconvertibility expropriation and political violence for assets and business income are some of the services offered by OPIC.

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Sri Lanka - France Trade Shows a Significant Growth in the Past Two Years. Sri Lanka France Business Council Highlights Untapped Potential of the 5th Largest Economy

24th January 2012, www.dailynews.lk, By Sanjeevi Jayasuriya

The trade relationship between Sri Lanka and France has recorded a significant growth in the past two years. Reviewing the trade performance between Sri Lanka and France we see an encouraging revival with healthy increase in both imports and exports, despite challenging business conditions. Exports to France in 2010 increased by 12% to US$ 160 million compared to the previous year, Sri Lanka France Business Council Immediate Past President Nirmali Samaratunga said.

The apparel exports accounted for the major share, notwithstanding removal of the GSP plus facility. The imports from France showed an impressive increase of 49% to US$ 152 million as against the previous year, with 46% of the total been on account of imports of electrical machinery and equipment, she said at the recently held AGM in Colombo.

The first quarter figures of 2011 indicated an upward trend, with exports showing an 11% increase and imports a 154% increase over the previous period, which is encouraging.

The economy of France which was impacted by the downturn of 2009 has shown resilience and recovery in the years that followed. The first quarter of 2011 indicated that the economy has been growing at a stronger pace than expected at 0.9% - one of the best in Europe, although in the period July-September has slowed down to 0.4%. ‘Meanwhile we need to be mindful of the emerging situation in the Euro Zone and the growing sovereign debt problem of several countries leading to a possible recession in the Euro Zone.’

‘We need to be geared to minimize the threat of a possible global economic slowdown which would impact both our countries,’ he said.

Total trade stood at just over US$ 300 million in 2010, with balance of trade remaining in favour of Sri Lanka. It is a mere fraction of the country’s total trade, exports being 1.9% of total exports and imports just 1.2% of the country’s total imports. The investment continues to be around $ 45 million again highlighting the potential for greater French investments especially with the emerging opportunities in the newly liberated areas in sectors such as agriculture and fisheries as well as in the rebuilding and strengthening of the country’s infrastructure.

All this indicates the untapped potential, which our Council can play a role to harness especially in view of France being the 5th largest economy globally. The strategy is to identify sectors, hitherto untapped, where there is emerging potential for Sri Lanka products, and where our products, notwithstanding the loss of duty concessions and preferential trade facilities, can hold its own. These include high end, value added products, marketed particularly through niche marketing and branding.

Furthermore, it is necessary to identify and focus on the emerging market trends in Europe including France, where demand is growing for eco friendly and health products such as organic products and herbal medical products such as ayurveda products.

We need to target such areas where our products have a competitive edge. The recent Budget 2011 proposals which are development oriented with strong focus on exports and upgrading technology and research and development will be a further support. France’s strengths also need to be exploited to a greater degree in key industries such as telecommunication, machinery and pharmaceuticals, through greater awareness and promotion and linking Sri Lanka business with French counterparts. The inward and outward trade delegations can play a very valuable role in facilitating this, Samaratunga said.

Vandana Luthra, Founder of VLCC to Visit Sri Lanka. Largest Health and Wellness Brand Built on Complete transformation in Slimming & Beauty

24th January 2012, www.dailynews.lk, By Sanjeevi Jayasuriya

Vandana Luthra, Founder and Mentor of VLCC, largest health and wellness brand is set to arrive in Sri Lanka next week to visit the VLCC centres at Wijerama Mawatha, Colombo 07 and Nugegoda.

Ms. Vandana Luthra, a pioneer in the wellness domain, opened India's first Transformation Centre in New Delhi in 1989. Since then, the network has spread all across South Asia and the Middle East and has been in operation in Sri Lanka since January 2011, initiating the concept of complete transformation, with slimming and beauty as two sides of the same coin.

Having redefined the wellness industry, VLCC boasts an impressive network spread across 260 locations in 120 cities, in 9 countries, including Sri Lanka, India, Bangladesh, Nepal, UAE, Oman, Bahrain, Qatar and Kuwait. VLCC employs over 6000 professionals, a majority of whom are doctors, nutritionists, psychologists, cosmetologists, beauticians and physiotherapists. Since its inception, VLCC has served over 10 million satisfied customers, making it the most preferred slimming, beauty and health brand in the countries it operates in.

Ms. Vandana Luthra, the guiding force behind this multi-national company is among Fortune magazine's list of the 50 most powerful businesswomen in India. Ranking 38th on the Indian version of Fortune magazine - Ms. Vandana Luthra is a dynamic educationist. Ms. Luthra is scheduled to visit the Sri Lankan VLCC centres and will speak on the extensive range of brand products during her visit to Sri Lanka next week.

Ceylon Chamber of Commerce Relaunches Enterprise, One of the Oldest Corporate Newsletters in Sri Lanka

17th January 2012, www.ft.lk

Enterprise, the newsletter of the Ceylon Chamber of Commerce (CCC) was re-launched from January this year in printed format. The newsletter will be published every month featuring news and events from the Ceylon Chamber of Commerce, its associations and business councils, steering committees and projects.

It will also comprise of features relevant to commerce, industry and finance as well as news from its member organisations, which makeup of top corporates and decision makers in the country.

Enterprise is one of the oldest corporate newsletters in the country with its first issue published in as far back as September 1967.

Throughout the years the newsletter has been a quarterly publication, however in order to accommodate the large number of events that take place at the CCC and to keep its members constantly updated, from 2012 the magazine will be a monthly publication.

Enterprise is distributed to members of affiliated associations, business councils of the Chamber, public sector officials, Diplomatic Missions, trade and international organisations, academia and professional bodies.
The interested public can access the newsletter on www.chamber.lk to be informed about the news as well as the upcoming events such as seminars and workshops organised by the CCC.

The Ceylon Chamber of Commerce is an effective spokesman of the Sri Lankan business sector.
Founded in 1839, the institution has been the focal point for business contacts both locally and abroad for more than 172 years.

It has many specialised committees, affiliated associations and 21 bilateral business councils promoting international business.

Read Web Version of Enterprise Newsletter of CCC Here - January 2012


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Emir of Qatar to Visit Sri Lanka. Two Agreements to be Signed on Investment Promotion, Protection & Cooperation in Education & Research

13th January 2012, http://www.ft.lk

Sri Lanka is to pen two agreements with Qatar on Investment Promotion and Protection as well as for cooperation in education, higher education and scientific research. The documents will be signed between the two countries during the Qatar President’s visit, which will take place on 15 and 16 January. Emir of Qatar Sheikh Hamad Bin Khalifa Al Thani will make an official visit to Sri Lanka on the invitation of President Mahinda Rajapaksa.

The Qatari delegation will consist of high-ranking officials of the Qatari Government and several leading business tycoons of Qatar, the official Government website said.


On a proposal made by External Affairs Minister Prof. G.L. Peiris Cabinet approval was granted for the proposed agreement to intensify economic cooperation to the mutual benefit of Sri Lanka and the State of Qatar, while creating and maintaining more favourable conditions for investments by investors of both countries.

Meanwhile, on the proposal made by Education Minister Bandula Gunawardena, Cabinet decided to sign a Memorandum of Understanding (MOU) for cooperation in education, higher education and scientific research.

This MoU intends to consolidate friendship ties and promote cooperation in the fields of education, higher education and scientific research between the two Governments, Cabinet Spokesman Minister Keheliya Rambukwella said.

Under the investment agreement, protection and security will be assured for businesses by both countries.

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