Opportunity for FDIs to have an added bonus in SL

By Sanath Nanayakkare

Sri Lanka will need at least six million tonnes of cement along with other construction materials in the next five years, and foreign investors have the secure opportunity to benefit from this demand by establishing manufacturing plants in Sri Lanka, Investment Promotions Minister Lakshman Yapa Abeywardane said in Colombo yesterday.

"We’ll need iron, aluminum, timber, wire, tiles, glass etc. for construction work to be done with six million tonnes of cement. This will present foreign investors and local investors keen on establishing plants in Sri Lanka a secure investment opportunity because, at the very inception, they will have the guaranteed demand for their plant output for at least five years within Sri Lanka itself."

"They can be either sole-foreign investors or those who are in partnership with local investors. They will also get the benefits of Sri Lanka’s Free Trade Agreements and integral tax subsidies."

"They will thus have their risk component minimized for at least five years which is indeed a desirable situation for them."

Commenting on Foreign Direct Investments (FDIs), the minister said, Sri Lanka’s FDIs increased to US$ 1,391 million in 2013 from US$ 1338 million in 2012.

"This is a 4% year-on-year growth in terms of FDIs. However, it’s beginning to look quite different in 2014. In the first quarter of 2014, Sri Lanka has received FDIs worth of US$ 442 million which is a 100% increase compared with US$ 219 million during the corresponding period last year".

The minister said the current level of FDIs is quite satisfactory considering the political challenges such as the Rathupaswala furore that discouraged investors.

"Attracting and keeping investors is a tough task. There are a number of other countries that attract investors providing them with various benefits. For example, Malaysia had offered the Rathupaswala investor to set up factory there pledging him safe operations in a safe place".

"If we are looking at sustained growth we need sustained FDIs. If we expect a growth rate of 8%, we need annual FDIs worth US$4 billion. This is the undeniable fact. We all must realize this," the minister added.

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