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Geographic location, access to regional markets seen as top attractions for foreign investors

Sri Lanka’s close proximity to the East-West trading routes and the easy access to the regional markets in Asia are considered as top factors by investors looking to Invest in Sri Lanka, finds a survey conducted by the Economic Intelligence Unit of the Ceylon Chamber of Commerce.

The survey, conducted among the prospective investors who attended the Ceylon Chamber’s ‘Sri Lanka Investment and Business Conclave 2016’ held during the first week of March 2016, revealed that ‘Access to Regional Markets’ as the top factor of attraction by over one-third of respondents, and ‘Geographical location’ was ranked highest among factors that shape their decision to invest in Sri Lanka.

Among the other factors that investors looked for in Sri Lanka, 18% reported ‘Economic policy certainty’, 16% reported ‘Political stability’, and 12% ‘Low cost of production’. ‘Quality of infrastructure’ was considered as a key factor by only by just 6%, possibly indicating that investors perceive infrastructure in the country as having improved, relative to other competing investment destinations they may be exploring.

Meanwhile, ‘tax incentives’ was also a low consideration, as only 6% of respondents, said it was a key factor for investment consideration. “This has important implications for policies around investment attraction. Growing international evidence suggests that tax breaks are low on the priority list among good quality investors, compared to other factors that shape the investment climate like policy predictability and political stability, access to markets, rule of law, finding skilled workers, etc.

The fact that, overwhelmingly, the investors we surveyed said that Sri Lanka’s location and access to big markets like India, Pakistan, and eventually China, was a key attraction in their decision to invest here reiterates the case for focusing on our trade, investment and logistics policies. We must become an attractive regional hub,” said Anushka Wijesinha, Chief Economist of the Ceylon Chamber of Commerce, commenting on the findings. When asked to rank (on a scale of 1 to 5, with 1 being lowest and 5 being highest) various factors that influenced their decision to invest in Sri Lanka, ‘Geographical location’ ranked the highest (4.33 on average), followed by ‘Political stability’ (3.96), ‘Quality of the workforce’ (3.88), ‘Quality of infrastructure’ (3.59), and ‘Macroeconomic stability’ (3.51). ‘Geographical location’ received the most number of respondents ranking it high at 4 or 5, and ‘Quality of infrastructure’ received the most number of respondents ranking it low at 1 or 2. In terms of other characteristics of the respondents, the majority of respondents, accounting for 46% of the respondents indicated that the key reason for attending the conclave was to meet potential investors and JV partners, while 37% reported that it was to gain market insight, and 17% has come to meet government officials and decision makers. The majority of the respondents (61%) were investors (including investment groups), while 19% were business support providers, 4% were from research institutions, 2% were buyers, and the rest did not classify.

The top five industry sectors that the investors came from were export manufacturing (21%), infrastructure providers (including equipment) (19%), agriculture (8%), tourism and leisure (8%), and petroleum, telecoms, power and energy (10%). The ‘Sri Lanka Investment and Business Conclave 2016’ attracted over 120 foreign investors, including large delegations from East Asian and Middle East countries and was the first such initiative by a Chamber in Sri Lanka.

Sri Lanka to build yacht marina in southern Galle Harbour

The Sri Lanka Ports Authority will start construction work on a yacht marina in the southern Galle harbour this week as part of efforts to promote it as a tourism port, a senior official said.

Galle is already a port of call for yachts but lacks adequate facilities to properly cater for existing users and to attract new ones, SLPA chairman Priyath Wickrema said.

"We're going to build a cruise terminal and a yacht marina with repair and recreation facilities," he said. Construction work on the yacht marina and repair yard begins on Thursday.

"Now we don't have good enough facilities," Wickrema said. "That's why we can’t attract more foreign yachts and pleasure boats. If we can develop the facilities we can attract more vessels."

The SLPA wants to modernise the port of Galle, which with the remains of an old Dutch colonial-era fort has long been a tourist attraction, to make it more attractive to high-spending foreign yachtsmen.

The SLPA is also thinking of organising yacht rallies to promote Galle port, Wickrema said. Later, the SLPA intends to build a cruise terminal to handle calls by cruise ships.

"We want to Galle as a tourism port," said Wickrema. "We will go to the international market after modernising our facilities."

Galle Harbour earns profit of Rs. 20 m

The Mahinda Rajapaksa Magampura Port in Hambantota is currently undertaking the biggest-ever supply of bunker, the Sri Lanka Ports Authority (SLPA) said yesterday.

Bulk carrier ‘MV Madeira’ will be getting the bunker supply until 18 October. The stem is for 2600mt of IFO 380cst via ex-wharf at the tanker terminal of the MRMRP. The vessel is in ballast with a LOA of 292mtrs and draft of 11.5mtrs.

The supply is through World Fuel Services Singapore Ltd., valued at around $ 1.6 m (Rs. 203 m). World Fuel Services is a Fortune 500 company that is based in Miami, Florida. It is a global leader in the downstream marketing and financing of aviation, marine, and ground transportation fuel products and related services.

SLPA Commemorates 35th Anniversary

The Sri Lanka Ports Authority (SLPA) on 1 August commemorated its 35th anniversary with a resolve to further develop the entire maritime industry of the country for sustainable existence in the maritime sector, with rapid globalization and amidst challenging competitions between international ports. Following the guidelines set in the ‘Mahinda Chinthana’ policy document of the Government of President Mahinda Rajapaksa and instructions extended by Minister of Highways, Ports and Shipping (Projects) Rohitha Abegunawardhana, the SLPA’s timely implementations during the past few years to develop its ports in Colombo, Hambantota Galle and Oluvil saw successful progress with winning achievements to keep the glory of the country being developed as the next maritime hub in the region at an apex in the international arena.

Parallel to the 35th anniversary and under the new development plans within the premises, the new Fire Brigade Unit was opened with the initiative of Minister Abeygunawardhana and SLPA Chairman Dr. Priyath B.Wickrama at the port premises.

In a special message at the anniversary celebrations, Dr. Wickrama said that the contribution of the SLPA has been vital in every sphere of socioeconomic development of the country.

“Under the ‘Vision 2020’ of the SLPA, the institution has aimed at operating 200 million tons of port cargo by 2020. The Colombo Port Expansion project that has already begun operations and further constructions as well as expansions aims to facilitate the mega container vessels of the future generation. The Colombo Port City Development Project that has been implemented under oncoming development plans of SLPA will enable to bring further international investments to ease economic efficiencies,” he said At present SLPA is also strengthening its implementations for all port users to enable all transactions via a centrally computerized network. A general cargo management system is also underway to computerize activities at the Conventional Cargo operation section. The HRIS implementation for all employees will also be extended with the establishment of kiosk machines that are similar to ATMs to further ease the personalized applications of all staff and employees of the institution.

Bunkering at Hambantota port to commence on Sunday

The Sri Lanka Ports Authority (SLPA) will inaugurate the new Tank Farm Complex and Bunkering Terminal on Sunday (22) at the Magam Ruhunupura Mahinda Rajapaksa Port (MRMRP) under the patronage of President Mahinda Rajapaksa. Marking the occasion, fuel will be supplied to a container ship arriving from Dubai.

The terminal, which will provide fuel for ships, has been constructed at a cost of US $95 million in line with the Magampura Port development project. The ship fuelling unit comes with an initial capacity of 55,000 tonnes and it is scheduled to expand gradually parallel to the expansion of the port and its services, Wickrama said. The oil tank farm with 14 tanks has been constructed at the Hambantota Port with an investment of US $ 76 million. The farm has eight tanks for fuel bunkering facilities for vessels, three tanks for aero fuel and three tanks for storing LP gas. The 14 tanks will also have an overall capacity of 80,000m3.

It has been planned to offer bunkering services at the lowest possible rate in the Indian subcontinent at the initial stage. The tank farm will initially handle 55,000 tonnes of shipping fuel with eight tanks and is expected to add further 100,000 tonnes under the second phase. Also the Port in Hambantota on Tuesday received two brand new ZPMC Ships to Shore (STS) Gantry Cranes and one Rubber Tyred Gantry (RTG) Crane from China. The cranes required for importing and re-exporting of containers arrived at MRMRP on the vessel MV Zhen Hua 13. These new ships to shore cranes are essential for MRMRP as they have arms which are much longer than the usual gantry cranes and could link ship to the shore.