Sri Lanka is an attractive destination as it has space at the Special economic Zone at Mirigama, which has all the amenities sought by investors. Currently construction of the plant ‘s proposed site, which is to be located at Singur near Kolkatta in the Indian State of West Bengal, has been opposed by local farmers. The company is looking at an alternative site for the plant that is estimated to be worth US$ 350 million.

The plant will manufacture the Tata Nano, which is a small, affordable and rear engine passenger car aimed primarily at the Indian market. The Tata Company wants the car to be affordable with a starting price of INR 100,000 or US$ 2,300. The objective of the Tata group is to produce a four-wheeled vehicle that would be affordable for members of the Indian public who usually travel by motorcycle. The proposed production at the Singur plant in West Bengal is 250,000 units annually.

Positive FDI result in the first half of 2008

The Minister also stated that in 2007 Sri Lanka had achieved US$ 734 million in FDI inflows. However he added that the BOI’s target for 2008 was US$ 1 billion. In the first half of 2008, the BOI had succeeded in attracting investments worth US$ 425 million. This was a 36% increase compared to the corresponding period in 2007.

Much of the FDI that flowed into Sri Lanka in the first half of 2008 was in the service sector that totaled US$ 363.4 million. Of this a total of US$ 290.70 was from telephone and telecommunication network projects. As at end March 2008 BOI enterprises employ directly a total of 451,985. This is a 5% increase from the total of 2007. The value of exports from BOI enterprises in the January to June 2008 period totaled US$ 2.6 billion, which is a 5% increase from the corresponding period in 2007.

These figures underscore the important contribution of the BOI enterprises to the National Economy in terms of foreign exchange earnings and employment generation.

Other positive results achieved by the BOI in the first half of 2008 were a growth in the number of new project, totaling of 230, compared to 223 in the corresponding period in 2007. The BOI also signed 129 Agreements with investors in January-June 2008, which was a 16% increase when compared to 2007. The estimated value of the agreements signed was LKR 140.144 million. This was a 27% increase from the previous year. The simplified application processes introduced by the BOI recently, made these successes possible.

Altogether 133 projects were implemented in the January- June 2008 period. This was a 36% increase from the 2007 result of the same period. In addition 36 new projects commenced operations , a 9% increase from the first half of 2007.

Okaya Electric Industries

Recently the BOI welcomed Mr. Ritsuo Maruyama, Chairman of the Board of Okaya Electric Industries. Okaya Electric Industries is a Japanese enterprise that established itself in a record period of 4 months after signing an Agreement with the BOI. Mr. Maruyama is a distinguished leader of Japanese industry who has served as Chairman of the Board, Chief Executive Officer and Representative Director of Okaya Electric Industries and also a very well known voice of the Japanese electronics industry who has expressed the position of this important economic sector to the media and other stakeholders.

The BOI was proud that Okaya Electric Industries which is a corporate giant from Japan and a listed company in the Tokyo Stock exchange, one of the world’s largest and dynamic bourses, should invest and therefore express confidence in the Sri Lankan economy.

Okaya Electric Industries that is a world leader in the manufacture of electronic components for noise suppression and surge suppression. The BOI was therefore delighted to announce that this company has made a firm commitment to invest in a high-technology manufacturing plant in Sri Lanka.

The initial investment will be of US$ 30 million at the Katunayake Export Processing Zone and will employ 1,200 workers. These workers are skilled and the company has already sent an initial batch for training in Japan.

It is the first time that a company will be manufacturing film capacitors for noise suppression and spark quenchers, which is a protective device for electrical systems. These high tech products will be exported. Production is projected at 40 million pieces per month.

Okaya Electric Industry’s investment is an important investment in strategic terms. It is a well-established company that was founded in 1946, with an annual turnover of US$ 270 million. The company is a multinational with manufacturing plants in Japan, China, Hongkong and Singapore and now Sri Lanka and marketing offices in USA, Shanghai and Taipei.

It is a strong endorsement for the investment environment of Sri Lanka, particularly of the favourable conditions existing for the electronics industry and the manufacturing capability of the Sri Lankan skilled workers. The initial investment is likely to lead to further investment in Sri Lanka in the near future to manufacture other products in the company’s range,