Sri Lanka Emerging as a BPO & KPO Centre for Business Support Sevices - IBM Global Location Trends Report

07th December 2010, www.lankabusinessonline.com

Sri Lanka and China are emerging as key destinations for services investments, while Phillipines has overtaken India as the top ranked outsourcing centre, a report by IBM, a global information technology firm has said.

In IBM's Global Location Trends report for 2010 Philippines claimed top place displacing India for the first time in terms of estimated workers, and China overtook Sri Lanka.

Sri Lanka retained its position at 12 while China moved to 5, from 13 a year earlier.

"China is continuing its ascent as a services destination, and confirms it should not be considered anymore “merely” the world’s factory," the report said.

"Sri Lanka is another Asian country that has succeeded in positioning itself as an alternative to India."

Several Sri Lankan firms are engaging in the high-end of the market in the so-called 'knowledge processing outsourcing' of KPO sector.

Sri Lanka has been competing for outsourcing business for several years under the shadow of a 30-year war which increased risk. In 2009 a war ended and the country is looking forward to increasing services investments in particular.

Treasury secretary P B Jayasundera has said that helped by the 2011 budget Sri Lanka is aiming to have the best personal income taxation regime in Asia.

The budget also ended a long-running oppressive taxation regime which exempted rulers from income tax helping improve just rule of law.

Sri Lanka is also in the process of dismantling a state monopoly in degree awarding which can improve the education freedoms of the people.

At the moment Sri Lanka's accountants, trained by peoples initiatives are in global demand.

Information technology training is also supported by private entities which are affiliated to foreign institutions though state university output in the sector is also well regarded.

The IBM report said India and Phillippines offers "similarly attractive business environment for international business support functions," but Indian labour costs were rising faster.

Related Info:
IBM's Global Location Trends Report for 2010

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

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

Sri Lanka Hemas and Dockyard with Singapore's Toll Bid for Oilfield Services of Cairn India

14th May 2010, www.lankabusinessonline.com

Sri Lanka's Hemas group and Colombo Dockyard have teamed up with Singapore's Toll Offshore Petroleum Services to bid for Cairn India's contract for offshore oil field support services, officials said.

"Hemas Holdings, Colombo Dockyard and Toll Offshore Petroleum Services have jointly placed a bid for the offshore supply base for Cairn," Irshad Mushin, director - maritime transportation of Hemas group told LBO.

"We have proposed viable sites in Sri Lanka."

Cairn Lanka, a unit of Cairn India, which is part of Britain's Cairn Energy, has called for expressions of interest and pre-qualification for provision of services to support its exploration effort.

Cairn has called for support for drilling, testing and completion of exploratory wells in a deep-water block in the Mannar Basin off north-west Sri Lanka.

Cairn plans to start drilling test wells by January 2011 to May 2011.

Colombo Dockyard managing director Mangala Yapa said offshore oil explorations in Sri Lankan waters gives good opportunities for both engineering and shipping companies.

"Colombo Dockyard is confident we can be involved in some of the engineering and other logistics requirements, especially because we have a fully-fledged engineering facility within Colombo port," he told LBO.

"Even at present we are repairing many offshore vessels from India's offshore industry."

The yard also builds offshore support vessels and is therefore aware of the requirements, Yapa said.

"Our role would be to provide all possible engineering and other logistical assistance for Cairn along with other partners."

Toll Offshore Petroleum Services is a subsidiary of Toll Asia, which is part of Toll Holdings, a big transport and logistics group headquartered in Australia.

It owns and operates offshore supply bases in Azerbaijan, Cambodia, China and Thailand.

Sri Lankan companies are keen to get Cairn's offshore support contract as it means new business in the new field of oil exploration.

It will also position them to offer similar services when exploration and drilling gets under way in other blocks in the Gulf of Mannar as well as in waters off the northern and southern coasts.

Sri Lankan firms would have to compete with firms in India which has an established offshore oil industry.

Oil explorations firms are expected to source some of their requirements from local industry in order to ensure the benefits of oil are shared in the domestic economy and also provide employment for locals.

Among the services requested by Cairn are anchor handling tugs, supply vessels and offshore supply barges.

Cairn Lanka has also called for rig positioning and site survey services, supply of fuel and water, provision of local logistic support such as cranes, port clearances, boat calls, and offshore supply base services.

Another service requested is air logistics which will provide opportunities for helicopter services offered by local aviation firms, officials said.

Cairn's exploration licence to explore for oil and natural gas in the Mannar Basin covers about 3,000 square kilometres in water depths of 200-1,800 metres.