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Sri Lanka

Current Business opportunities

 

Export Opportunities

 

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Current Business opportunities 

   

Southern Transport Development Project - Closing Date: 17.08.2009

Brief Description of Goods/services -  Construction and Completion of Balance Works and Four Lane Widening of South Section from Pinnaduwa to Godagama (30+800km - 61+050 km) and Balance Works of Galle Port Access Road of Southern Transport Development Project.

CLICK HERE FOR MORE INFORMATION

 

Conflict Affected Areas Rehabilitation Project, and Grant 0062 (Norway) - Component B: Power & Electrification - Closing Date: 22.07.2009

Brief Description of Goods/services - Supply & Delivery Of Transformers: Outdoor 3-Phase 11kV/LV 100 KVA Transformers (Quantity: 2), Outdoor 3-Phase 33kV/LV 100 KVA Transformers (Quantity: 25), Outdoor 3-Phase 33kV/LV 160 KVA Transformers (Quantity: 11).

CLICK HERE FOR MORE INFORMATION

  

What are the main export opportunities in Sri Lanka?

There are opportunities in Sri Lanka, particularly for small medium sized businesses who have some degree of experience in exporting. If thinking of supplying to the rest of the India Sub-Continent or South East Asia, Sri Lanka makes an ideal location with it's geographical location on the main shipping routes.

Source: UK Trade & Invest

 

Target Sectors

Some of the major sectors in which there are opportunities in Sri Lanka are:

 

Power Generation and Distribution

Major portion of the low voltage transmission network is maintained by CEB and LECO is responsible for the distribution of power to the Greater Colombo area.

In Sri Lanka, the demand for electricity has been growing at an average rate of about 7% per annum over the past 20 years. A 10% annual growth in power consumption is forecast. In order to meet this demand the country needs to generate an additional 1530 MW by year 2008. Sri Lanka is therefore increasingly looking at non-hydro sources of power.

The Government is in the process of reforming and unbundling of CEB by restructuring the power sector and enacting a legislation to constitute a regulatory authority. The new power sector reform legislation is expected to be in place by mid 2001 and will provide for unbundling the generation, transmission and distribution operation of the CEB in to separate companies. The companies are likely to include two or more power generating companies in addition to the private sector power generation plants that an already in operation, a power transmission company and appropriate number of power dist ribution companies.

The Government is also encouraging investment in renewable energy projects such as, wind power and mini hydropower generation. It is estimated that Sri Lanka has the potential to realize at least 200 MW of power through the development of potential mini hydro sites in Sri Lanka.

Source: Bureau of Infrastructure Investment

 

Infrastructure projects

Ports

Traditionally port infrastructure in Sri Lanka has been financed through a combination of Government concessionary borrowing and through funds generated by the Sri Lanka Ports Authority (SLPA). However, with the limitations in concessionary borrowing available to the Government, coupled with the repayment of existing loans and budgetary constraints on public sector borrowings, it has become necessary for the Government to explore alternative sources of funding for the development of large-scale infrastructure.

As such, the Government since 1995 has actively sought private sector participation in the development of port infrastructure through Build Own Operate (BOO) and Build Operate Transfer (BOT) basis. Under certain circumstances, the Government would also be willing to undertake projects on a public-private partnership basis.

A major milestone in the port sector of Sri Lanka was the entry of the private sector as a terminal operator in 1999. The development of the Queen Elizabeth Quay (QEQ) by South Asia Gateway Terminals (Pvt.) Ltd (SAGT) on a Build Operate and Transfer (BOT) basis heralded the first BOT transaction ever concluded in the transportation sector of Sri Lanka and also gave an indication of the confidence the private sector and potential financiers had in the Government's policy of attracting private sector investment for large scale infrastructure.

For Sri Lanka to emerge as a premier maritime center in the region, it is necessary to have a successful hub port such as Colombo, complemented with the full range of ancillary services that may be required by a vessel. It is the Government's aim to attract private investment to the various areas of ancillary services by identifying the areas for such investment and providing the necessary fiscal incentives. Some of the key ancillary service areas are as follows:

  • Ship repair and Ship Building
  • Bunkering and ship chandelling
  • Intermodal transport network
  • Multi country consolidation and entrepot cargo

Source: Bureau of Infrastructure Investment

 

Highways

Sri Lanka has approximately a road network of 87,501 Kilometers of which 11,151 km are under the Road Development Authority (RDA). Remainder is with Provincial councils (15,000 Kms), and other Local Authorities (61,300 Kms).

Over the past two decades, the sectoral development policy of the Government of Sri Lanka on Highways sector has been to rehabilitate its existing road infrastructure. During this time only improvements, rehabilitation and maintenance work were undertaken to upgrade the transportation system through Government and Donor funding. No new expressways connecting the major growth centers were constructed.

However, due to the rapid increase in the country's vehicle population over the last two decades (as a result of the liberalization of vehicle imports in 1978 and ever-growing industrial sector), there is a shortage of road capacity to meet the rising demand. Therefore, there is an urgent necessity for further investment in roads, especially to cater for regional development needs, and ease existing traffic congestion in the Colombo city.

Hence the Government of Sri Lanka has decided to implement a policy to develop a network of new Expressways to supplement the existing road capacity. As such, the RDA has already identified more than 400 km of new highways (Expressways) required to support the island's growing economy.

The Government is also actively exploring the possibility of attracting private sector investment for the development of the highways sector in Sri Lanka either through BOT transactions or by way of operation and maintenance contracts for the completed expressways.

Source: Bureau of Infrastructure Investment

 

Water

Access to safe drinking water in Sri Lanka is around 74% of the population (compared to an average of 63% for South Asian nations as a whole) of which only 29% of the population received piped-borne water supply throughout the country.

The Government is currently investing around Rs. 4Bn per annum for the development of urban water supply sector, and this figure is expected to increase to Rs 12Bn per annum for the next 10 years to meet the increasing demand.

The National Water Supply and Drainage Board (NWSDB) is the semi-autonomous body responsible for the design, construction, operation and maintenance of water supply and sewerage systems in Sri Lanka. Although tariff increases are likely to improve the financial performance of NWSDB, the organization has only limited internal financial resources and technical and managerial apacity to carry out large-scale rehabilitation, development, and expansion plans. For these reasons, GOSL has decided to meet the needs for increased efficiency, improved performance and large investments by maximizing the role of the private sector.

As a result, an institutional arrangement involving the most appropriate private sector partnership is planned for implementation in the Greater Negombo Area and Kalutara-Galle Coastal strip. Such an arrangement will be the first phase in encouraging private sector participation in the water sector.

Source: Bureau of Infrastructure Investment

 

Chemicals and Pharmaceuticals

Sri Lanka is far ahead of her South Asian neighbours in the accomplishment of human development goals. Life expectancy at birth is currently 74 yrs. and is close to the estimated lifespan in the developed countries. High literacy rates, low mortality rates and the steadily declining population growth, reflect the country's progress in the sphere of social development. All these human development indicators are a tribute to Sri Lanka's social service network, which was established in the latter part of the 1940's decade, ensuring sound educational policies, an extensive health care programme and an effective medical system for all sectors of the nation.

The health policy in Sri Lanka clearly identifies intersectoral action for health as an important element in the health development process. A National Health Council presided over by the Prime Minister has been established, supported by a National Advisory Committee and task forces of experts to deal with specific health concerns.

Current health reforms aim to increase private investment in curative health, thereby allowing the Government to focus more on preventive health.

Today, Sri Lanka's health system is dominated by "Western medicine" covering 85% of the total health requirement. Both the public and private sectors provide healthcare services. Unlike other developing countries, the public healthcare system provides good coverage and is accessible to the majority of people. The public healthcare system meets almost 60% of total healthcare demand. The public healthcare system also accounts for 95% of the demand for in-patient care, which makes it affordable for a large segment of the population. The private sector meets one half of the demand for out-patient services.

Traditional medicine, or ayurveda, is another important part of the healthcare system. Since many people prefer ayurvedic treatment, production of indigenous medicines is high. Most of the raw plant material ingredients are imported, but 40 of the 72 species used can be grown domestically. Many of these are cultivated commercially. Since selling medicinal plants is difficult for farmers, the Sri Lanka Ayurvedic Drugs Corporation purchases all production.

In terms of expenditure on drugs, it is estimated that about equal amounts are spent in the Government sector and the private sector. The funding of the health sector is low by developing country standards. The percentage of the GDP spent on health in Sri Lanka is estimated to be only 3.5%.

Demand for pharmaceuticals is mainly met through imports. The country imported medical and pharmaceutical products of around SLRs.10bn (US$100m) in the year 2002. The government purchases all essential drugs in bulk through the State Pharmaceuticals Corporation and other private suppliers.

Source: Board of Investment Sri Lanka

 

Textile Machinery and Textile Accessories

The textile and apparel sector is one of the most significant and dynamic contributors to Sri Lanka's overall economy. Sri Lanka's strength in textile and apparel manufacturing lies in its ability to produce high quality goods at competitive prices, combined with an industry structure which is flexible and uniquely capable in servicing leading international brands.

Both foreign and local companies have set up textile mills/finishing plants and many accessory manufacturing industries to serve the increasing needs of the industry. Products manufactured include buttons, zippers, hangers, yarn, thread, fabrics, interlinings, packaging, elastic, padding, quilting, etc. The services offered range from, dyeing and finishing, screen printing, embroidery, training, washing, etc. Most existing factories have been automated and upgraded. Computerization of areas such as inventory/stock control has also assisted the rapid expansion of the industry.The textile and apparel industry provides employment to approximately 1/3 of the labour force involved in the manufacturing sector. To further develop human resource capital in the textile/apparel industry, both the government and the private sector have set up textile training and clothing institutes in Sri Lanka.

In January 2000, the Sri Lankan apparel industry entered a new phase with the introduction of the Electronic Visa Information System (ELVIS). ELVIS was developed by the US government in 1991 in an effort to eliminate excess paper processing and minimise the risk of forgeries, counterfeiting and errors. With the introduction of this modern electronic system the Sri Lankan authorities, US Customs and all exporters are able to maintain accurate records. Source: Bord of Investment Sri Lanka

The Sri Lankan Government has recently announced additional incentives for the following industrial sectors if they are to invest in machinery that will increase production.

 

Electronics & Components for Electronic Assembling

The government of Sri Lanka has given the highest priority for the development and promotion of the electronics sector, which has also been identified as a thrust industry since 1995 to promote Foreign Direct Investment (FDI). Under the thrust industry scheme, companies investing in the electronics industry are offered a package of attractive incentives and concessions. There are seven universities in Sri Lanka producing graduates in the fields of electronics, engineering and computer studies. In addition there are four institutes providing training in electronics. Sri Lanka has extensive deposits of high quality minerals such as kaolin/feldspar, silica sand, quartz and ilmenite, which could be used as a base material for electronic products.

Source: Board of Investment Sri Lanka

 

Mineral based industries including ceramics & glassware

The ceramic industry has been in existence in Sri Lanka for many centuries. Today this sector has been identified as a "thrust industry" to be nurtured and developed by the state. Presently, a wide variety of ceramic products are manufactured and exported including traditional tableware, sanitary ware, floor and wall tiles, ornamental ware, and insulators.

Source: Board of Investment Sri Lanka

 

Rubber based industries

Sri Lanka is the world's 9th largest producer and the 10th largest exporter of natural rubber (NR). It is also the major supplier of high quality latex crepe to the world market and the world's largest manufacturer and exporter of solid tyres for off-road-vehicles. Nearly 60% of the NR production in Sri Lanka is used for value added rubber products. The bulk of these value-added products are for the export market. Foreign investors from 20 countries have set up lucrative and long standing world class ventures under BOI approval. The 59 BOI approved rubber industry projects consume nearly 75% of Sri Lanka's total domestic NR production.

Source: Board of Investment Sri Lanka

 

Light & heavy engineering

Studies undertaken in Sri Lanka show that the local light engineering industry compares well internationally for both its efficiency and competitiveness. The island exports products such as precision tools, moulds and electrical enclosures and manufactures high quality water pumps and agriculture machinery for the local market.There are several investment opportunities in the manufacture of products such as fans, room air conditioners, refrigerators, small engines and metal furniture. Investments can also be made in fabrication subcontracting for many products.

Source: Board of Investment Sri Lanka

 

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