ACL Cables, Sri Lanka's cable and conductor manufacturer, has signed
a stock sale and purchase agreement to acquire 51% of Cable Solutions (Private)
Limited's issued shares for 481 million rupees. A stock exchange filing said
that, together with other investors, it would eventually buy 75% of Cable
Solutions. Cable Solutions Pvt Ltd., which produces electrical and electronic
cables and wires, has a factory in Flint Industrial Park, Kadawatha, north of
the capital, Colombo.
Cable Solutions
Europe AB's largest plant in Sweden is based in Kerala, India. Swicord
Investment, Sweden, manages the Flint Industrial Park and provides
manufacturing companies with infrastructure facilities and support services. ACL
Cables PLC is Sri Lanka's most significant cable manufacturer, pioneering the
industry in 1962. ACL holds 45% of the local market and produces Sri Lanka's most
extensive range of cables.
Today, ACL has
evolved to be a group of companies that control 70% of Sri Lanka's cable market
share. ACL is the most sought-after cable brand in Sri Lanka. It offers 80% of
the Duty-Free project requirements owned by overseas investors and authorized
by the Investment Board, beating international cable supplies. All of the
leading factories, hotels, commercial buildings, and warehouses use ACL cables
to-date.
Earlier this
year, ACL Cables Plc won an Rs. 789.45 million deal to supply cables to state-operated
Ceylon Electricity Board (CEB).
Sri Lanka’s
Government Information Department stated that the Cabinet of Ministers approved
the award of 1,300 kilometers of aerial bundled conductors to Sri Lanka’s ACL
Cables Plc. The proposal was presented Cabinet for approval by Sri Lanka’s Power
and Energy Minister Ravi Karunanayake. The Standing Procurement Committee made its
recommendations, and the company was selected accordingly.
The contract
awarded by Sri Lanka’s CEB to supply cables to a local company is indicative of
the strength and growth of the country’s private sector. It is also indicative
of the many business opportunities in Sri Lanka, given the expanding economic
activities in the country.
Hence foreign
businesses could, therefore, explore possibilities of forming partnerships with
local companies - partnerships to engage in business ventures in Sri Lanka.
They could also explore business/investment opportunities in the country’s
development program.
OSL Take: The
government of Sri Lanka is engaged in a development program covering the entire
country as well as a plan to revive and uplift state-owned enterprises through
public-private partnerships (PPPs). PPP initiatives have resulted in the
opening of many business/investment opportunities in Sri Lanka. The country’s
economic policies, as well as the ease of doing business environment, are
encouraging signs for foreign investors to enter Sri Lanka’s economy.
The acquisition
plans of the Sri Lankan cable manufacturing company is indicative of the
strength and growth of the country’s private sector. It also portrays the
business potential in the country. 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 ideal business destination in the South Asian region.
VBS/AT/20200106/Z_TB4
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