Saturday, May 2, 2020

Opportunity - Unilever explores global buyers for its tea business


In the face of declining group sales growth, Unilever will conduct a review of its global tea business, including the PG Tips and Lipton brands, in an apparent strategy that Chief Executive Alan Jope is rethinking.  Jope said the group had previously invested in turning around the tea sector over the longer term, but the change of plan could ease the fears of investors who criticised the lack of urgency in transforming Unilever's struggling business of food and refreshment.

Pitkethly said tea is an excellent performer in emerging markets and the premium segment, but it would consider for review for all regions and all parts of the business. The company said the analysis caused by traditional black tea sales slowing down in developed markets as customers turn to herbal tea. Black tea, Pitkethly said, is the dominant part of Unilever's tea market, distributed in 60 countries and producing annual sales of 3 billion euros ($3.3 billion).
Unilever also struggled elsewhere with stuttering growth in India and China, two of its main emerging markets, while intense competition in North America and Europe also hindered attempts to meet growth targets for the full year. The food and refreshment company which produces teas from Lipton and mayonnaise from Hellmann among others and contributes 40% to group sales-has been hit particularly hard in North America and Europe as customers look for healthier options.
Joe announced that he is concentrating on sustainability instead of topline growth. Nonetheless, Joe's focus is on growth, and he said on Thursday after the results from his first full year in charge showed a 2 per cent increase in annual turnover and 2.9 per cent improvement in underlying sales.
OSL Take: Sri Lanka’s tea sector has been recording continuous growth with increased recorded in the export sector as well. The proposed merger and acquisition opportunity avails the range of business opportunities towards the astute investor.
The government of Sri Lanka has also offered many incentives to promote the country’s tea industry. Foreign businesses/investors could explore business/investment opportunities in Sri Lanka’s tea industry.
The latest report by the Central Bank of Sri Lanka highlighting the decrease in the trade deficit, increase in the tea export revenues, and the easing of pressure on the rupee is all indicative of an economy on a buoyant growth path. International lending agencies have recognised Sri Lanka's economic policies like the IMF, World Bank, and ADB, which have expressed confidence in Sri Lanka and expressed willingness to assist the country.
The country’s economic policies have also helped the growth of several key industrial sectors in the country. Hence, this has resulted in the opening of many business/investment opportunities along with the aggressive development program undertaken by the GoSL. The country is, therefore, a hotbed for foreign investments, and interested businesses/investors could explore opportunities in Sri Lanka.
VBS/AT/02052020/TB_3 


India’s Cabinet approves agreement with Sri Lanka to avoid double taxation


Sri Lanka and India will sign a double tax avoidance agreement that aims to improve tax transparency and help curb tax evasion and avoidance. An official release said India-Sri Lanka signed the new DTAA on 22 January 2013, which came into force on 22 October that year. India and Sri Lanka are members of the Inclusive Framework and are required to implement the minimum standards for their DTAAs with Inclusive Framework Countries under the G-20 OECD BEPS (Base Erosion and Profit Shifting) Action reports.

Minimum BEPS Action Six requirements may be met through the Multilateral Convention for the Implementation of Tax-Treaty-Related Measures to Prevent Base Erosion and Profit Shifting (MLI) or through bilateral agreement.
India is an MLI signatory. But as of now, Sri Lanka is not a signatory to the MLI. Therefore, amendment of the India-Sri Lanka DTAA bilaterally is required to update the preamble and also to insert Principal Purpose Test (PPT) provisions to meet the minimum standards on treaty abuse under Action 6 of-20 OECD BEPS project
OSL Take: The commitment towards setting up an agreement to avoid double taxation by India to Sri Lanka indicates the close bilateral ties enjoyed by the two nations. Sri Lanka and India have an existing free trade agreement as well. India has played an active role as Sri Lanka’s development partner. Therefore, business opportunities between the two countries are very high.
Foreign businesses/investors interested in doing business with India could look at setting up bases in Sri Lanka to get the trade benefits enjoyed by Sri Lankan businesses in India. The ancient ties between the two nations have further strengthened through trade ties that have been benefited by a free trade agreement (FTA) between the two countries. While many Indian companies have formed joint ventures with local businesses, the Indian government has continuously assisted Sri Lanka in its program.
The trade relationship between Sri Lanka and India could be beneficial to foreign businesses/investors interested in doing business in the South Asian region as well as India. On the other hand, given Sri Lanka’s continuous efforts to develop its railway sector, foreign companies engaged in rail transport could explore business opportunities in Sri Lanka’s railway sector as well as help build additional facilities.
Sri Lanka already has a free trade agreement (FTA) with over ten countries, and the continued assistance would help build investment opportunities in various sectors. The move to further strengthen bilateral relations between Sri Lanka and India as well as the redoubling of trade promotions to invigorate efforts to reach the target of US$ 1 billion trade by 2020 are indications of the island nation becoming a hot spot for those looking at entering the Turkish market using the facilities available in the Pakistan–Sri Lanka Free Trade Agreement.
VBS/AT/02052020/TB_2

Govt. to expand available infrastructure at free trade zones for business expansion


The Ministry of Industrial Export and Investment Promotion said the rapid construction of infrastructure at the FTZs and EPZs was also a key promise outlined in the manifesto 'Visions of Prosperity and Splendor' by President Gotabaya Rajapaksa.
The GoSL has recognised the need to develop drinking water facilities within FTZs and EPZs and has instructed the competent authorities to submit a proposal for project implementation Ranatunga reported that Rs. Five hundred forty million had already earmarked for the construction of drinking water facilities in the Seethawakapura FTZ, where 24 factories with 22,534 employees are working.
The Investment Board (BOI) has built 15 FTZs across the country, the oldest being Katunayake FTZ, founded in 1978. Katunayake FTZ currently employs 137,478 employees at 81 factories while Biyagama FTZ, which opened in 1985, has 55 factories and employs 28,588 workers. Koggala FTZ has 19 factories, using 14,689 people.
The government has already established a 200-acre stretch of land to develop a new FTZ in Eravur, in the Eastern Province's Batticaloa District. They will provide essential infrastructure, and the environmental impact assessment (EIA) reports have taken. However, he said the ministry is now finding potential investors for the new FTZ in Eravur. Special attention has also been given to resolving issues in industrial zones Bingiriya and Wagawatta, the minister said.
While the growth routes of these high-growth Asian economies may not replicate, their growth experiences involve lessons and plans from which Sri Lanka can learn. Economic reforms are vital if Sri Lanka is to unleash its true potential for development.
The key to enormous economic growth is export-oriented industrial development funded by private capital, especially foreign direct investment. Hence, Sri Lanka requires a solid export development policy and a regionally competitive incentive framework to attract large-scale foreign direct investment in this context.
OSL Take: The latest report by the Central Bank of Sri Lanka highlighting the decrease in the trade deficit, increase in the tea export revenues, and the easing of pressure on the rupee is all indicative of an economy on a buoyant growth path. International lending agencies have recognised Sri Lanka's economic policies like the IMF, World Bank, and ADB, which have expressed confidence in Sri Lanka and expressed willingness to assist the country.
The country’s economic policies have also helped the growth of several key industrial sectors in the country. Hence, this has resulted in the opening of many business/investment opportunities along with the aggressive development program undertaken by the GoSL. The country is, therefore, a hotbed for foreigninvestments, and interested businesses/investors could explore opportunities inSri Lanka.
VBS/AT/02052020/TB_1

Tuesday, April 28, 2020

Govt. launches a new operational model for Sri Lanka tourism’s way forward


The government aims to merge the SLTDA, the SLTPB, and the Sri Lankan Convention Bureau (SLCB) into one single agency. Minister of Tourism Development Prasanna Ranatunga told the Daily FT that he hoped to apply for approval next week a Cabinet paper to amend the 2005 Tourism Act No. 38.

Ranatunga noted that the Tourism Act No. 38 of 2005 had divided the entire tourism sector into four significant institutions, including the SLTDA, SLTPB, SLCB, and the Sri Lankan Tourism and Hotel Management Institute (SLIM). However, the minister said the government also concentrated on turning SLITHM into a university awarded with a degree.
He further noted that a feasibility study was currently being undertaken by the Ministry of Higher Education and the University Grants Commission (UGC) to determine whether it would convert into a university under UGC or a local or international affiliated university.
During the last 50 years, SLITHM has focused primarily on hotel management and hospitality, remaining in line with the broad national objective of the Ministry of Tourism Development to provide a range of training opportunities for industry stakeholders to develop their businesses related to tourism through better operational knowledge, skills, and competencies.
The aim behind converting SLITHM into a degree-awarding university is to enhance further the Institute's quality, standard and recognition, and education. The lack of real-time hardcore learning and development for industry and enterprise-level employees had been a significant concern that has not addressed for many years. The new agency will be called Tourism of Sri Lanka. With the necessary amendments to the Act, they hope that the consolidated agency will be better able to provide a proficient service to all industry stakeholders.
OSL Take: Sri Lankan government has committed significant resources towards the uplifting tourism industry in Sri Lanka and has shown an increasing willingness to engage with the critical stakeholders in the private sector in the tourism industry. Sri Lanka’s tourism authorities have commenced promotional campaigns to attract visitors to the country following the setback faced by the tourism sector following the Easter Sunday attacks.
The government of Sri Lanka has already introduced a relief package to the tourism sector. Given all these developments, the country’s tourism industry is showing signs of revival. Many foreign investors have already expressed confidence in the country’s tourism industry, and it’s growth potential. Therefore, international businesses/investors could explore business/investment opportunities in Sri Lanka’s tourism sector.
Further, Sri Lanka’s geographical positioning in the Indian Ocean, the ease of doing business environment in the country, and the strong trade ties with other countries as well as the continuously growing tourism industry make the island the ideal business/investment destination in South Asia. Foreign businesses could, therefore, confidently explore business opportunities in Sri Lanka’s airport and the aviation industry as well as the opportunities in developing additional infrastructure facilities.
 VBS/AT/20200428/Z_TB3

Commonwealth Region Investment Council Chairman positive about Sri Lankan FDI Outlook for 2020


Epic Lanka Technologies and Sri Lanka Telecom are signing an MoU to cooperate in the production of cutting-edge ICT products. Jonathan Marland is one of Britain's leading entrepreneurs and former Conservative Party Treasurer. He served as Trade Minister and Climate Change Minister. He is a managing director of international insurance firm Jardine Lloyd Thompson Plc and insurance company AppleClaim at Lloyd's, London.

He purchased Boots and Insurance Capital Partners from Hunter Wellington. Lord Marland is the chairman of Jubilee Holdings Ltd. and a director of Insurance Capital Partners Ltd., TestMatchExtra.com Ltd., and Wisden Cricketer Publishing Ltd. He is also Chairman of Tickets For Troops and Trustee of the London Young Musicians Foundation, Peggy Guggenheim Museum (UK), The Churchill Centre, The Atlantic Partnership and Invercauld Estate.
High Commissioner Sarah Hulton, Speaker Karu Jayasuriya, MP Ranil Wickremesinghe, MP Sajith Premadasa, MP Nimal Siripala de Silva, Prof. G.L. Peiris, MP Arundika Fernando, Admiral Prof. Jayanath Colombage, Nivard Cabraal, and Chairman Harry Jayawardene Aitken Spence were among those present for the congratulations.
At the dinner, Marland, Niranjan Deva Aditya, and Niro Cooke addressed the 40 distinguished guests with UK re-entering the global scene without the restrictions imposed by EU membership and the immense future opportunities created by the young people and SMEs of the developing Commonwealth at the heart of their addresses.
OSL Take: The Commonwealth Region Investment Council Chairman for the South Asia Region is visiting Sri Lanka to gain further knowledge on the country’s development agenda. The Commonwealth and its subsidiaries have already pumped in large amounts of monies for development projects covering several vital economic sectors.
Further improving the discussion between the World Bank and the Sri Lankan government would result in a further increase in development assistance to the island nation. This visit is an encouraging sign for foreign businesses/investors keen on doing business with Sri Lanka since the interest shown by multinational lending agencies would help secure funding for large scale projects.
The government of Sri Lanka now focused on increasing the inflow of foreign direct investments to the country. Contemplating the need to modernise the country’s laws to attract more foreign investments to Sri Lanka is a positive sign for international businesses/investors looking at doing business with the state.
Sri Lanka’s geographical positioning in the Indian Ocean, the ease of doing business environment in the country and the many trade agreements, as well as trade concessions enjoyed by the state, have made it an attractive business destination in the South Asian region. Given the strength and growth of the country’s private sector, foreign businesses/investors could explore business/investment opportunities in Sri Lanka. Also, international businesses could look at possibilities of forming partnerships with local companies and expand their businesses to other countries.
 VBS/AT/20200428/Z_TB2



Ceylon Chamber of Commerce is all set to avail a new economic growth through partnerships and value chain development through LEED+ model


The Ceylon Chamber of Commerce Chamber Academy together with the International Labor Organization (ILO), arranged an information sharing session on the LEED+ initiative and its private sector and local producers' incentives. The project contributes to poverty reduction, sustainable job creation and peacebuilding through an improved environment with enhanced governance, efficient community-based services, and public-private partnership that empowers economically vulnerable groups in conflict-affected populations in the northern province of Sri Lanka.

LEED+ has introduced an approach to the growth of value chain/market systems as one of its main strategies for creating lasting impact and achieving greater outreach. Six value chains have established in the agricultural and fishery sectors that show high potential for creating decent jobs for the target population in northern Sri Lanka.
The project promotes partnerships with selected domestic companies to facilitate investment and procure from producers in post-conflict areas of primary/processed products. The business models are designed with care to ensure the control of the models and benefits for both the private and local producers. Through this model, companies engage directly with cooperative societies and individual farmers and fishers, with the help of ILO.
The collaborations address supply shortages and lack of market access and technical expertise. ILO facilitates connexions between companies and cooperative societies, suppliers, farmers as well as relevant government departments, etc. through partnerships. The agreements also include mutual investments, thereby allowing the participating companies to lower the risk involved.
ILO Country Office for Sri Lanka and Maldives Chief Technical Advisor Dr Thomas Kring PhD from the Jobs for Peace and Resilience Program together with ILO Marketing and Value Chain Expert Khairul Islam from the Local Empowerment for Economic Development and Reconciliation Project (LEED+) will lead the seminar.
OSL Take: The government of Sri Lanka is engaged in introducing many policies aimed at strengthening and consolidating the country’s economy while attracting foreign investments by continuously improving the ease of doing business environment in the island nation. Looking at the comments made by Sri Lanka’s Finance Minister and Senior Adviser to the Finance Ministry, it is evident that Sri Lanka is heading on a path to achieve overall economic growth.
The conducive business atmosphere in the country will attract foreign businesses/investors to explore opportunities in Sri Lanka. Given Sri Lanka’s geographical positioning in the Indian Ocean, the ease of doing business environment in the country and the many trade agreements, as well as trade concessions enjoyed by the state, have made it an attractive business destination in the South Asian region.
 VBS/AT/20200428/Z_TB1

Monday, April 6, 2020

Orana to invest $1.5 million to build a fruit processing plant in Sri Lanka


Cabinet gave its approval to reach an agreement between Danish juice producer ORANA and Lanka Industries Development Board to provide ORANA with two acres of land for the establishment of a fruit processing plant from Pannala Industrial Zone.
The Industrial Development Board of Sri Lanka will sign an agreement to provide the company with a 02-acre block of land in Pannala, in the island's central north area.
ORANA has already planned to invest $1.5 million to build a fruit processing plant in the Pannala Industrial Zone and expected to provide 30 job opportunities during this project's first phase.
ORANA has produced a wide range of conventional fruit preparations and fruit compounds for all kinds of fermented milk such as yogurt, yogurt eating, and milk drinks. Their product range is of the highest quality, and most items customised to the needs of each market, the customer's production equipment, and the consumer's taste.
Within the range of fruit preparation and fruit compound for yogurt, they have established some exciting combinations where several different fruits combined with more exotic and functional ingredients such as Nata de Coco, Water Chestnuts, Green Tea, Echinacea, Ginkgo Biloba, Ginseng, Aloe Vera and many more.
Last year, the World Bank approved a $125 million loan for Sri Lanka to boost agricultural resilience and productivity for more than 470,000 small farmers in six provinces in the country's dry area. Sri Lanka is especially vulnerable to natural disasters such as floods and droughts due to climate. The agriculture sector, which contributes about 7.7% to the economy of the country and employs 27% of the population, more than 38% of whom are women. (Data Source: World Bank).
The government will identify locations to build up significant scale storage facilities for agricultural produce and intervene to build up those facilities. Hence it will enable the domestic farmers and producers to export value-added products instead of exporting commodities in raw form.
A series of export villages will establish in Kilinochchi, Mullaitivu Anuradhapura, Polonnaruwa, Trincomalee, Batticaloa, Puttalam, Monaragala and Hambantota for growing pepper both for domestic use and export. Foreign investors will invite to produce innovative agriculture-related products under trade names.
OSL Take:Sri Lanka’s agriculture sector is ripe with business/investment opportunities due to the development and upgrading of the country’s agriculture industry to be on par with global standards. The Sri Lankan Government has also taken many steps to improve the ease of doing business environment in the country and has made massive progress in infrastructure development as well.
Sri Lanka’s geographical positioning, along with the many trade agreements and trade concessions enjoyed by the country, makes it an attractive business destination. Therefore, foreign businesses/investors could explore setting up businesses in Sri Lanka as the base for the South Asian region.
VBS/AT/20200406/Z_TB1