‘Even our SMEs suffered in global recession’-Rishad

news.lk - 26/05/2014

SMEs claim 70% of Sri Lankan enterprises and 23% of national employment. Our banking sector still looks the other way when it comes to our SMEs as they are worried about recovering credit from SMEs. This is despite our Central Bank’s efforts to keep lending rates at low levels. I urge our banking sector to link with Sri Lanka’s SMEs much closer and become a direct stakeholder in our national development. Do not avoid this risk. It is in such risks that great rewards and profits are found said Minister Bathiudeen and added: “In this background, I highly commend, the recent announcement by International Finance Corporation (IFC) office in Colombo to assist our SMEs with their valuable funding of $ 125 million.

Minister Bathiudeen was addressing the inauguration event of SMIDEX  held recently by the Industrial Development Board under Ministry of Traditional Industries & Small Enterprises at BMICH, Colombo. According to the IDB, SMIDEX has been introduced by the IDB to mark its 45th year anniversary. SMIDEX is yet another national event showcasing the SMEs with special attention to technology, machinery, raw materials, business development and other services.

Also present on the occasion were Basil Rajapaksa, Minister of Economic Development, Douglas Devananda, Minister of Traditional Industries & Small Enterprises, Weera Kumara Dissanayake, Deputy Minister of Traditional Industries and Small Enterprises, AHM Fowzie, Senior Minister, V. Sivagnanasothy, Secretary to Ministry of Traditional Industries and Small Enterprise Development, Anura Siriwardene, Secretary, Ministry of Industry and Commerce and Nawaz Rajabdeen, Chairman-Industrial Development Board of Sri Lanka.

SMIDEX is ably supported by the Ministry of Industry and Commerce and sponsored by the Export Development Board.

According to data available with National Enterprise Development Authority, Lanka’s SMEs claim 70% of Lankan enterprises and 26% of national employment. 91% of Industrial Establishments are SMEs.

The "Mahinda Chintana" vision of  President Mahinda Rajapaksa outlines SME entrepreneurs, to be the backbone of our economy. Thanks to President’s economic vision, in 2013 we achieved 7.3% GDP growth and, the Asian Development Bank, now forecasts, growth could reach, 7.5% in 2014.  The successful Divineguma program by Economic Development Minister Basil Rajapaksa is well known across the country, and has contributed to upgrade our entrepreneurs at rural levels. Also among other entrepreneur development efforts of NEDA, are the new business creation, and expansion programmes, the Women Entrepreneur Development program, and the Cluster development program. I am pleased to inform you, that the UNIDO focal point under my Ministry too has in the recent times spent more than $ 6 six million, to support our SMEs. The latest initiatives, by UNIDO are the project on Bamboo processing in Sri Lanka, the livelihood development project in the Eastern Province and the Cinnamon Industry skills upgrading project. Developing SMEs is not the responsibility of one institution alone, but is a team effort of several stakeholders.”

According to data available with National Enterprise Development Authority under Ministry of Industry and Commerce

 “SMIDEX is a forum for new market opportunities. IT helps boost Sri Lanka’s SMIs” said Nawaz Rajabdeen (Chairman-Industrial Development Board of Sri Lanka), addressing the event. “It is also a platform to share best practices, and strategies for our SME development, which is part of Mahinda Chinthana” Chairman Rajabdeen

Lankan delegation to explore new opportunities in post-revolution Tunisia at TIF 2014

The Island - 24/05/2014

Hon. Rishad Bathiudeen, Minister of Industry and Commerce will attend the Tunisia Investment Forum (TIF) 2014 along with a Sri Lankan business delegation on June 12 and 13 at El Mouradi Gammarth Hotel, Tunis. The forum takes place just six months after Tunisia’s adoption of a new constitution.
Under the theme, ‘New Tunisia: New Democracy, New Opportunities,’ TIF 2014 will showcase the impact of democratic progress on the country’s economic and social environment. The forum is expected to present a more transparent and conducive investment destination to the international business community, highlighting investment prospects and growth generating projects, a news release issued in connection with the forum said.

Last year’s forum saw the participation of 1,693 delegates including over 550 international delegates. TIF was launched by the Foreign Investment Promotion Agency-Tunisia in 2011, giving a new perspective to the Carthage Investment Forum that had taken place for 12 years. The new TIF reflects the colors and spirit of post-revolutionary Tunisia. It is Tunisia’s flagship economic event, bringing together the elite of the business community, high-level policy-makers, representatives of international organizations and experts.

"A new initiative in this year’s agenda proposes partnerships between Tunisian companies and foreign companies wishing to invest in Tunisia. TIF 2014 will serve as a platform for closer cooperation between Tunisian and foreign operators through B2B meetings scheduled along areas of interest expressed by the participants.

The face to face meetings are organised at no additional charge, and are reserved for companies, chambers of commerce and banks. They offer an opportunity to explore investment partnerships in various sectors, primarily industry and services. In order to guide participants in choosing and planning appointments, a catalog of Tunisian companies is available on the forum website, www.tunisiainvestmentforum.tn. Online registrations for TIF 2014 will be accepted until June 10,’’ the release said.

"TIF 2014 will focus on Tunisia’s macroeconomic situation and the impact of its new reforms, in order to strengthen the environmental sustainability of its investment climate. Institutional representatives, international experts and investors operating in the country will meet at four thematic workshops to share their views on the expected role of the economic reforms in high added value industries and in regions in search of an attractive new positioning. Foreign investors operating in Tunisia will testify to the propensity of this process achievement.’’

Further information and assistance with registration can be obtained by contacting The Export Development Board on 2300721 or 2300722.

First Lanka-Belarus JEC, biz delegations in July amidst renewed trade

Asian Tribune - 23/05/2014

Rishad Bathiudeen (Minister of Industry & Commerce-centre) greets Ambassador Vitaly Prima (the New Delhi based Ambassador of Belarus to Sri Lanka-second from left) on 22 May in Colombo.

As Sri Lanka’s trade with the virgin Eurasian market Belarus clocked $ 14 Mn, the gateway to the 170 Mn strong custom union wants to renew trade and business immediately -as early as in July.

“With your assistance, we want to prepare fruitful projects with Sri Lanka. We propose a Joint Economic Commission with Sri Lanka as early as July 2014 to be held in Colombo, if possible. We also can formulate the first Belarus Business delegation to Colombo during this event as per your interest” said a keen Vitaly Prima (the New Delhi based Ambassador of Belarus to Sri Lanka) on 22 May in Colombo.

Ambassador Prima was addressing the official Sri Lankan team led by Rishad Bathiudeen (Minister of Industry and Commerce) at the Ministry of Industry and Commerce on 22 May. Taking part in the discussion along with Minister Bathiudeen were R D S Kumararatne (Director-General of Commerce), Sujatha Weerakoone (DG-EDB), officials of Department of Commerce & EDB as well as reps of Belarus consul in Sri Lanka. Belarus is the world’s third largest potash power and an industry driven economy with a GDP equal to Sri Lanka.

For Sri Lanka, Belarus remains a virgin market. The first high level Belarus team to arrive in Sri Lanka in recent times, met Minister Bathiudeen and his officials in Colombo in August 2013.

According to the Department of Commerce, bilateral trade between both countries stood at $ 14.2 Mn in 2013 and bilateral trade volumes between Sri Lanka and Belarus more than doubled from its $ 7 Mn levels in 2010.

90% of Sri Lanka’s exports have been tea. Other export items are pneumatic tyres, articles for packing of goods and food preparations. Fertilizers (Potassium Chloride) has been the major import item from Belarus contributing to more than 95% of total imports in from Belarus in 2013. Belarus is the world’s third largest potash supplier after Canada and Braziland one of the key dairy economies in the world well-known for its cheese. The Russia-Kazakstan-Belarus Customs Union is reportedly keen for its expansion, with new regional members.

Ambassador Prima addressing Minister Bathiudeen, said: “With your assistance, we want to prepare fruitful projects with Sri Lanka. We propose a Joint Economic Commission (JEC) with Sri Lanka as early as July 2014 to be held in Colombo, if possible. I am pleased to hand over our proposal to you today in this regard. We believe the proposed JEC could be wide ranging-involving such aspects as trade, investment, education, agriculture and even science and technology. Closer ties with our country could open a 170 million strong Eurasian market of Russia-Kazakstan-Belarus Customs Union for Sri Lanka. We are also looking for more apparel and leather imports from Sri Lanka since our apparel production levels are low. “

“We understand you have a growing leather export industry here and we are also looking for upper shoe patterns/parts in big volumes for our shoe manufacturers from you. We continue to buy Sri Lankan made solid rubber tyres. We also like your fish and are keen on bigger imports of Sri Lankan seafood”

Responding to Ambassador Prima, Minister Bathiudeen said: “Due to President Mahinda Rajapaksa’s new initiatives, Lanka-Belarus cooperation has been strengthened in recent times. In this background, we welcome your proposals for Joint Economic Cooperation and I also suggest B2B visits to kick-off business and investment cooperation with Sri Lanka.

“Depending on the concurrence other line Ministries, July is a good time to start. Our current bilateral trade levels at $ 14 Mn shows of the huge unrealized trade potentials that could be realized with the latest trade efforts. We also invite Belarus investors to partner with us in our government’s proposed 60 investment projects as well as in our apparel, leather and seafood sectors. I propose the Department of Commerce under my Ministry to be the focal point in renewal of our bilateral trade efforts. We understand that Belarus is a dairy leader in the world. Therefore we welcome your support to our dairy sector. Stronger powdered milk manufacturing capacity for Sri Lanka is the need of the hour and can help us to cut down on our huge annual milk powder import bill of $ 1.7 Bn! I also invite a Belarus Business delegation to Colombo,” Minister Rishad Bathiudeen said.

Ambassador Prima, responding to Minister Bathiudeen, said: “Being one of world’s leading dairy nations, we can support developing Sri Lanka’s dairy sector-and not only on a single aspect such as powdered milk production but in its entire value chain! We shall favorably consider your request in this regard! As per your interest we would also formulate the first Belarus Business delegation to Colombo during July.”

Both Ambassador Prima and Minister Bathiudeen also explored other possible areas of bilateral cooperation on 22 May.

Algeria interested to buy Sri Lankan tea, fruits and vegetable juices

Ceylon Today - 14/05/2014

Algeria is inviting Sri Lankan businesses to export tea, fruit and vegetable juices and many other products to that country, the Ceylon Chamber of Commerce announced.

This invitation was made by Echarif Mohammed-Hacene, Ambassador for Algeria in Sri Lanka and India, when he visited the Ceylon Chamber of Commerce, accompanied by Consul General for Algeria in Sri Lanka, Mukthar Marikkar.

He held a meeting with CEO/Secretary General of the Ceylon Chamber of Commerce Harin Malwatte, while Lilakshi De Mel, Senior Assistant Secretary General of the Chamber, was also present.
During the meeting, the ambassador said, Sri Lanka can exports items such as, tea, fruits and vegetable juices, textiles, garments specially semi-finished traditional garments for women and spices.
Ambassador Echarif says, the Algerian consumers prefer to drink blended tea with mint and sugar and also would like to purchase tea in consumer bags.

“Algerian consumers prefer to drink blended tea with mint and sugar. Tea exported from Sri Lanka is channeled through Gulf region hence the country of origin is not reflect properly in Algeria” said the Ambassador Echarif.
His Excellency also said the Algerian consumer is cost conscious hence pricing should be economical.
“Tea exported from Sri Lanka should be in consumer packs of 500 gms to 2 kgs.  Tea bags are not popular hence they wish to use tea in consumer packs which could be purchased directly from the market,” added the Algerian envoy.

He further said that since Algeria is a non-alcoholic country, there is a great demand for tea, fruit and vegetable juices. At present fruits/vegetable juices to that country are imported from Mediterranean countries.
Speaking during the occasion, Harin Malwatte, CEO of the Ceylon Chamber Commerce told the Ambassador, that there is lot of scope available to develop trade, investment and tourism between Sri Lanka and Algeria.
The meeting took place, recently at the CCC premises in Colombo.

Algeria framed in the North by the Mediterranean Sea, the East by Tunisia and Libya, in the South by Niger and Mali, at the West by the Western Sahara then Morocco has a 37.1 million population with annual demographic growth of 1.53%. Algeria stretches over a 2.4 million sq.kms. Algeria ranks 42nd in GDP at an estimate of US$ 268.9 billion.

Japanese smiling on Lanka Ayurveda

Asian Tribune - 19/05/2014

Basil Rajapaksa (Economic Development Minister of Sri Lanka-second from right) and Rishad Bathiudeen (Minister of Industry and Commerce-fourth from left) attempt tasting fruit based confections from the Vietnamese exhibitor Alpha International Food JSC at the inaugural event of AROGYA 2014 and INTRAD 2014 at BMICH, Colombo on 16 May.

Sri Lanka’s Ayurveda healthcare is garnering the attention of high end tourist market. “Lately, the Japanese travel sector has shown stronger interest in Sri Lanka’s Ayurveda tourism. Last week a Japanese Member of Parliament touring Sri Lanka also has expressed of Japan’s interest in Sri Lanka’s Ayurvedic care for Japanese medical tourists” revealed an upbeat Rishad Bathiudeen (Minister of Industry and Commerce) on 16 May.

Basil Rajapaksa (Economic Development Minister of Sri Lanka) peeks through a microscope as Rishad Bathiudeen (Minister of Industry and Commerce-centre) looks on at the inaugural event of AROGYA 2014 and INTRAD 2014 at BMICH, Colombo on 16 May.

Minister Bathiudeen was addressing the simultaneous launch event of AROGYA 2014 and INTRAD 2014 at BMICH on 16 May. The twin expo is scheduled to continue through 18th May. The AROGYA series of exhibitions were introduced by the National Chamber of Commerce of Sri Lanka in partnership with the Ministry of Health and features indigenous medicinal products and services. As for INTRAD, this year’s is the eighth in the INTRAD series. Attending the twin expo were delegations and participants from Vietnam, Thailand, India, Maldives and China. Also present on the occasion were Economic Development Minister Basil Rajapaksa, Deputy Minister of Health Lalith Dissanayake, and Sunil Wijesinha (President National Chamber of Commerce) as well as representatives from the diplomatic community in Colombo. This is the first time that the twin events are held at once.

Since the end of conflict in 2009, Japanese tourists to Sri Lanka have doubled. In 2013, more than 31,500 Japanese tourists visited Sri Lanka. In the same year, Japan ranked 11th in arrivals to Sri Lanka as per tourists’ country of residence, immediately below USA, which ranked 10th.

“Already a Sri Lankan Ayurveda product brand has earned global reputation with its treatment centres being located in Europe. Today’s Arogya also takes place along with good news for this industry. I am given to understand that Japanese travel sector has shown stronger interest in Sri Lanka’s Ayurveda tourism. Last week a Japanese Member of Parliament touring Sri Lanka also has expressed of Japan’s interest in Sri Lanka’s Ayurvedic care for Japanese medical tourists. Our tourism sector reported more than 1.2 million arrivals in 2013. I wish to commend the Economic Development Minister Basil Rajapaksa for this growth” said Minister Bathiudeen and added: “Since medical tourism is at the middle of several sectors such as tourism, healthcare and inbound travel packaging, we believe that Public Private Partnerships are a good way to strengthen this promising sector so that our government’s goals in tourism related hub synergies are leveraged well. These twin events have been, gaining gradual recognition, among our business community, as successful networking events, in Colombo. With only a per capita healthcare expenditure of $ 175, at first Sri Lanka does not appear to have an advanced healthcare infrastructure similar to the developed countries. However, this does not show us the full picture. Due to the support of well-trained, high quality healthcare professionals we are witnessing the emergence of a new sector-that is medical tourism. Studies show that around 15% of patients in Sri Lanka are foreign patients, such as from Maldives. I am pleased to say that two healthcare companies already have active programs for foreign medical tourists. In fact the Export Development Board under my Ministry, which is also partnering for INTRAD and Arogya, believes that medical tourism is a promising service sector to drive our foreign exchange earnings. Developing a strong identity in medical tourism in western and Ayurveda can result in a special tourism brand for Sri Lanka in the long term. I am given to understand that INTRAD is a wide ranging exhibition including industries, imports and even exports. As the Minister in charge of exports I commend your efforts to promote our exports through this series. In fact I am pleased to share the good news with you on our exports. In that, the encouraging news is that we have identified 16% provisional export growth in the first quarter of this year from January to March, compared to last year’s January-March exports. Accordingly this year’s first quarter provisional exports totalled $ 2.80 Bn while the comparative 2013 first quarter total exports stood at $ 2.36 Bn, showing a 15.7% quarterly growth. This year’s first quarter provisional export growths is led by fisheries, agricultural and industrial exports. The increase in provisional exports only for the month of March this year is a strong 27% from February exports. This year’s March only exports totalled to a record $ 1.06 Bn. These strong growth rates are reported at a time when we target national exports goal of $ 20 Bn by 2020 under the committed vision of the President Mahinda Rajapaksa.”


Several international participants at the expo expressed that for them, Sri Lanka is a new opening. “Coming here from Vietnam for the first time, we did not know that Sri Lanka market has big such potential for our line of products” said Le Viet Anh (Business Director of Alpha International Food JSC) based in Yen Phong, Vietnam. “We have now decided to find and set up an authorised agent in Colombo to represent us. We are interested in potential joint ventures at distribution level here for our health confectionaries, which are based on tropical fruits.” Business Director Anh’s Alpha International Food is a top confectionary producer in Vietnam reporting annual revenues exceeding US $ 80 Mn.

SL to place its export products on top e-commerce portal

The Island - 11/05/2014

Sujatha Weerakoone (DG-EDB-far left) addresses the Rakuten platform intro event at EDB on 02 May as Japan's Kanagawa based Takashi Yoshino (Principal, Y and F Associates LLC-seated next, second from left) and Lankan exporters (seated next) look on.

As Lanka's exports to Japan topped $ 223 Mn mark, Sri Lanka is mulling a strategic, fast-track entry to one of the most coveted online markets in the world-Japan. "Japan is the second biggest retail market in the world. Japanese are also heavy internet users with a large e-commerce base. Using a top Japanese online giant like Rakuten could give Lankan exporters a wide-coverage and a low cost entry to this promising market" said Sujatha Weerakoone (DG-EDB) on 02 May at EDB premises.

DG Weerakoone was addressing the EDB organized event "Japan's Rakuten Platform for Sri Lankan Products" held for Lankan exporters on 02 May at EDB. The session consisted of a special in-depth presentation by Japan's Kanagawa based Takashi Yoshino (Principal, Y and F Associates LLC) who, in a his presentation, shoed in-depth of the pros and cons, and how to create an online strategy for Lankan exporters to Japan. Eager representatives from more than 40 Lankan export firms were present at the session.

Sri Lanka's exports to Japan has shown a steady rise. In 2012, total exports to Japan recorded $ 215.74 Mn and in 2013, it rose to $ 223.82 Mn. Apparel, tea and seafood (prawns and fish) became the lead products in 2013. Not only in Japan, but across the world, Rakuten (rakuten.co.jp) is considered as one of the largest e-commerce retailers. Within Japan, Rakuten is the largest e-commerce retailer. Rakuten is internationally present in 19 countries. As for Japan, around 30 percent of $ 13 Bn annual Japanese e-commerce traffic goes via Rakuten. With a single login to Rakuten, 78 to 80 million regular Japanese web users access its many services-which include retail business, travel, telecoms, banking and e-money services. The B2B2C Rakuten Platform recently reported revenues at $4.6 Bn with operating profits of about US$244 million.

"Japan is the second biggest retail market in the world. Japanese are heavy internet users. Using an online Japanese giant like Rakuten will give us a low cost entry to this market with immediate wider coverage" said DG Weerakoone and added: "This is also a novel concept and more importantly, a good, Sri Lankan product validation window. This is also a global online export strategy incubator for us. The lessons from this would be very important for us in placing our export products with top e-commerce retailers of the world. We at EDB are only looking at introducing and possibly a test run for to our exporters at present and are not imposing this on them. This online presence will also lift the burden for our exporters to not to maintain a ready inventory in Japanese warehouses."

"This is a challenge and a tryout for Sri Lankan exporters. I thank the EDB for inviting me to show you this novel concept. Japan e-commerce market is unlike many international online sales portals we know such as Amazon" said Principal Yoshino, addressing the session. "Japan's retail consumer market is world's second largest. It is not conducted in English though. Almost in Japanese language. More than 75% of Japanese buy products online, and most of them heavily use Japan's top online e-commerce portal Rakuten used by 29%-30% Japanese.

Apparel exports up by 20% to $ 1,257 m

Daily News - 12/05/2014

Bandula Egodage, Chairman & CEO of EDB having discussion with Rishad Bathiudeen Minister of Industry and Commerce about the latest export trends at the Ministry of Industry and Commerce. 

Sri Lanka's first quarter exports registered a positive growth of 16%, while monthly exports for March jumped by as much as 27%.

"This is encouraging for our efforts towards $ 20 bn export goal by 2020 as envisioned by President Mahinda Rajapaksa," said Rishad Bathiudeen, Minister of Industry and Commerce on May 9 in Colombo.

Accordingly, this year's first quarter provisional exports totalled $ 2.80 bn while the comparative 2013 first quarter total exports stood at $ 2.36 bn, showing a 15.7% Q-on-Q growth.

This year's first quarter provisional export growth is led by fisheries, agricultural and industrial exports. Fisheries exports grew by 23% to $ 71 mn, agricultural exports grew by 21% to $ 635.24 mn and Industrial exports grew by 18% to $ 2086 mn. Within the growth of industrial exports is the apparel exports increase by 20% to $ 1257 mn.

Within agricultural exports sector, coconut exports grew by a strong 68% to $ 125 mn, while tea grew by 16% to $ 383mn. Manufacturing exports which includes processed foods, leather and footwear, rubber and paper and are part of industrial exports also picked up, growing by 27% to $ 646 mn.

Unclassified exports grew by 44% to $ 11 mn. The increase in provisional exports only for the month of March this year, is led by many sectors, with strong performance by industrial exports. This year's March only exports totalled to a record $ 1.06 bn.

This is a 27% increase from this February's $ 841 mn monthly exports. The main growth driver for the month of March is 'manufacturing exports' which surged by 57% to $ 273 mn.

During March, tea exports increased by 34% to $ 154 mn, apparel exports surged by 16% to $ 454.53 mn and overall industrial exports grew to $ 784 mn, rising by a strong 26%. 

Sri Lanka at annual European Seafood exposition in Belgium

news.lk - 11/05/2014

Sri Lanka Export Development Board in collaboration with the Sri Lanka Embassy in Belgium organized the Sri Lanka’s participation at  22nd Annual European Seafood Exposition held in Belgium from May 6-8.  Over 1,690 exhibiting companies  attracted more than 25,800 buyers and suppliers for the event.

This year’s exposition marks the 22nd edition of Seafood Expo Global, and the 16th edition of Seafood Processing Global.  The exposition is considered a unique opportunity for the global seafood industry to come together and make valuable business connections.

This time, around 76 exhibiting countries represented an exhibit space of more than 34,800 square meters,   From Argentina to Yemen, 71 national and regional country pavilions came from all parts of the world, including new national pavilions from Libya and Japan.

The Sri Lanka Pavilion was ceremonially opened on May 6 by  P. M. Amza,  Ambassador of Sri Lanka to Belgium & Luxembourg and the European Union, which accommodated five reputed Sri Lankan Seafood export companies exhibiting a range of products including processed seafood.

Sri Lanka continuously participated at this event since 2005. The main objective of Sri Lanka’s participation was to strengthen relationship with existing buyers and look for more export opportunities with new buyers.

According to an Embassy news release, all the companies were able to establish valuable business contacts and links while meeting their existing buyers.

Lanka closely monitoring EU's trade policy - Rishad

Asian Tribune - 08/05/2014

David Daly (Ambassador of the EU Delegation to Sri Lanka and Maldives-left) discusses with Rishad Bathiudeen (Minister of Industry and Commerce of Sri Lanka) at the second EU-Sri Lanka Trade Dialogue session on 07 May in Colombo.

As trade between Sri Lanka and its top global partner EU edged to $ 5 Bn mark, Sri Lanka for the first time revealed its levels of attention to the EU trade dynamics on 07 May. And Europe has commended Sri Lanka's exports value addition efforts as "remarkable."

“Sri Lanka closely monitors the developments in the EU trade policy as it could have significant impact on Sri Lanka’s exports, both directly and indirectly. For example, the recent cross cumulation facility provided for SAARC and ASEAN Regional Groups, would help Sri Lanka to source inputs of ASEAN countries, and be eligible for GSP concessions” said Rishad Bathiudeen, Minister of Industry and Commerce of Sri Lanka on 07 May.

Minister Bathiudeen was addressing the second EU-Sri Lanka Trade Dialogue that commenced at Galadari Hotel, Colombo on 07 May. Organised by the European Chamber of Commerce Sri Lanka (ECCSL), the session, the second in its series since its commencement last year, aims at promoting EU-Sri Lanka bilateral trade further. In this latest session, Sri Lanka, through its Export Development Board, aims at promoting six specific product sectors towards world’s largest trader, the EU.

Reps from Czech Republic, Belgium, Italy, France, Germany, the Indo-German Chamber as well as Sri Lankan officials and exporters were present at 07 May session. Also in attendance was Faiszer Musthapha, the Deputy Minister of Investment Promotion.

“I believe it’s a timely initiative for two reasons” said Minister Batbhiudeen, addressing the event, and added: “Firstly, I am confident that, this initiative will help, to identify potential markets, in the EU for, selected products and services, such as IT-BPO, Agro Food and Beverages, Electronics, Gems and Jewelleries, and Rubber and Plastics, while establishing, business collaborations for, mutual benefits.

“Secondly, Sri Lanka has built an enabling environment for international businesses and you as private representatives, need to get this message across the world to promote Sri Lanka as the business hub in Asia under the vision of His Excellency Mahinda Rajapaksa, our President. The necessary infrastructure towards this objective is being established and is drawing the attention of the business communities from all around the world. EU has been not only a promising market for Sri Lanka, but also a development partner since the signing of the Commercial Cooperation Agreement in 1975, which was replaced with the Cooperation Agreement on Partnership and Development Agreement in 1995 and subsequent establishment of the EU-Sri Lanka Joint Commission. Various projects, including EU-Sri Lanka Development Project providing development assistance, post tsunami reconstruction, and rehabilitation, and humanitarian assistance were significant in this respect.

“As a market, the 28 countries in the EU has emerged as the number one export destination for products of Sri Lanka. In 2013, the total bilateral trade between Sri Lanka and EU, stood at $ 4.9 Bn. Sri Lanka’s total exports to the EU market have increased to $ 3.27 billion, in 2013 from US $ 2.7 Bn, in 2009. Even in the first quarter of this year alone exports to EU increased by 16.3% to $ 896 Mn. Among our imports from EU are machinery chemical and plastic products, woven fabric, and base metal. Sri Lanka continues to, enjoy a favourable, balance of trade with the EU. In 2013, 60% of our exports to EU were apparel. The relationship built on apparel trade has become a strategic partnership with major buyers in the EU.

“Today, Sri Lanka has become a value creator to its strategic partners. This significant development, in our exports to the EU is the growth in our apparel exports despite the loss of GSP plus facility in August, 2010. This certainly demonstrates, our commitments in adding value not only to our business partners but also to the consumers in the EU countries. Sri Lanka closely monitors the developments in the EU trade policy, as it could have significant impact on Sri Lanka’s exports both directly and indirectly. For example, the recent cross cumulating facility provided for SAARC and ASEAN Regional Groups would help Sri Lanka to source inputs of ASEAN countries and be eligible for GSP concessions. Sri Lanka continues to engage with the European Commission for further strengthening its trade and, economic relationship.

“After a period of four years the 18th session of the EU-Sri Lanka Joint Committee meeting was held in Brussels in December 2013. Similarly Sri Lanka closely, collaborated with the European Commission in implementing IUU regulations of fisheries by maintaining regular dialogue. I am confident that, the European Commission would be able to assist Sri Lanka for implementation of Trade Facilitation Agreement which came out as a result of the Bali package concluded at the WTO Ministerial Conference held in Bali Indonesia in December 2013. Sri Lanka is currently processing to obtain Geographical Indication (GI), protection for Ceylon Cinnamon in the EU.

“As you all are aware such GI protection will provide an exclusive identity that will enable Ceylon Cinnamon to fetch a higher position in the international market while supplying its consumers an authentic product. Prior to this initiative Sri Lanka has been able to secure an exclusive classification of Ceylon Cinnamon under a separate HS tariff heading, through the World Customs organisation. I was also informed that your Chamber in collaboration with business dignitaries in the EU has established EU-Sri Lanka Business Council, in February 2010. I would like to stress that my Ministry is ready to extend any possible assistance for such ECCSL initiatives, through our Trade Officers stationed abroad”.

Simon Bell (Director-ECCSL) addressing the event, said: “Sri Lanka’s export value addition has been remarkable and a great success. Often American and European officials are unaware of this. In fact, it’s a little known fact that Sri Lanka exports’ value addition successes in spices, rubber, tea, gems and jewellery are seen as role models by countries from Rwanda to Indonesia.”

Faiszer Musthapha, the Deputy Minister of Investment Promotion, addressing the event, said: “Sri Lanka has slowly set the phase to being recognised as a high value, niche products and service deliverer to the global market. Two key elements-the interest of industry sector to work with the government on a long term strategy, joint collaboration in tech, international trade etc with EU-have helped Sri Lanka to be placed in the global market map. To become a global leader, Sri Lanka needs to look beyond today, and tomorrow-and innovate.”

Sri Lanka: Trade deficit narrows, export earnings rise

The Times of Sri Lanka - 05/05/2014

The external sector further strengthened in February 2014 with the trade deficit continuing to narrow as a result of an increase in earnings from exports and a decline in expenditure on imports.

Inflows on account of workers' remittances and earnings from tourism recorded an increase during the month contributing to the substantial reduction in the current account deficit. These developments together with continued inflows to the financial account resulted in a surplus in the Balance of Payments (BOP) upto February 2014, the Central Bank said yesterday.

On a year-on-year basis, earnings from exports in February 2014 increased by 5.4 per cent to US dollars 841 million, while expenditure on imports declined by 6.2 per cent to US dollars 1,345 million. Accordingly, the trade deficit contracted by 20.7 per cent to US dollars 504 million.

The cumulative trade deficit for the first two months of 2014 contracted by 12.5 per cent, as the growth in export earnings of 13.9 per cent outpaced the 1.1 per cent increase in import expenditure.

Earnings from exports increased mainly led by improved performance in agricultural exports which grew by 15.3 per cent, year-on-year, in February 2014 to US dollars 201 million.

Healthy performance in tea and coconut product exports mainly contributed to the growth in agricultural exports. Export earnings from tea increased by 11.7 per cent to US dollars 116 million as a result of the increase in both the price and volume of tea exported.

The average export price of tea increased by 8.9 per cent, to US dollars 5.16 per kg in February 2014 from US dollars 4.74 per kg in February 2013, while export volumes increased by 2.6 per cent, year-on-year.
Earnings from coconut product exports increased by 60.3 per cent to US dollars 23 million, due to improved performance in both kernel and non-kernel coconut products in terms of both price and volume.
Export earnings from minor agricultural products and seafood also increased significantly by 124.9 per cent and 37.1 per cent, respectively, in February 2014.

However, earnings from export of spices declined by 23.6 per cent, mainly due to the decline in export of pepper and cloves, owing to unavailability of stocks during the non-harvesting period.
Earnings from industrial exports, which account for more than three fourths of total export earnings increased by 2.5 per cent, year on-year, to US dollars 637 million in February 2014, with earnings from export of textiles and garments growing by 6.6 per cent to US dollars 396 million.

A notable increase of 35.7 per cent was observed in export of garments to non-traditional markets, reflecting greater diversification of markets in the industry. Garment exports to USA and to the EU increased by 8.8 per cent and 8.7 per cent, respectively. Export of rubber products grew by 6.3 per cent to US dollars 70 million mainly due to the increase in export of rubber tyres, although export earnings from rubber gloves declined during the month.

Export earnings from chemical products, petroleum products, food, beverages and tobacco also increased in February 2014. However, earnings from gems, diamonds and jewellery declined by 14.1 per cent, year-on-year, to US dollars 26 million, mainly due to the substantial decline in diamond exports as a result of low global demand.

Expenditure on imports declined by 6.2 per cent, year-on-year, to US dollars 1,345 million in February 2014, as a result of a decline in both intermediate and investment goods. Expenditure on intermediate goods imports declined by 4.7 per cent, year-on-year, to US dollars 827 million mainly due to the decline in import of diamonds and precious stones and precious metals including gold by 82 per cent. Despite the strong growth in textiles and garment exports, textiles and textile article imports declined by 6.4 per cent, reflecting higher domestic value addition in the garment industry. Expenditure on fuel increased marginally by 0.6 per cent, year-on-year, to US dollars 421 million in February 2014 due to the increase in refined petroleum products by 51.3 per cent despite the decline in import of crude oil. The increase in imports of refined petroleum products was due to greater dependence on thermal power generation as hydropower generation declined due to adverse weather conditions. The high growth rate in the import of wheat and maize recorded during the month was mainly due to the low base. Despite the reduction in prices, expenditure on importation of fertilizer increased by 133.3 per cent in February 2014, due to the high usage of fertilizer for paddy and other crops during the Yala season as well as the low base.

Expenditure on imports of investment goods declined by 17.7 per cent, to US dollars 293 million in February 2014, mainly due to the decline in transport equipment imports which declined by 53 per cent. A reduction in imports of almost all sub categories contributed to the contraction in transport equipment import in February. Import expenditure on building materials declined by 21.8 per cent due to lower imports of iron and steel, cement and mineral products. However, expenditure on machinery and equipment imports increased by 2.7 per cent, due to the increase in import of engineering equipment, agricultural machinery and medical and laboratory equipment, although import of electronic equipment, telecommunication devices and textile industry machinery declined.

Despite the decline in import expenditure on intermediate and investment goods, import of consumer goods increased by 7.2 per cent, year-on-year, to US dollars 224 million in February 2014, reflecting increases in both food and non-food consumer goods imports. Import of food and beverages increased by 1.4 per cent with import of dairy products growing by 34.6 per cent, on account of the increase in the price of milk powder in the international market. However, imports of many sub categories including oil and fats, seafood, vegetables and sugar and confectioneries declined in February 2014. Non-food consumer goods imports increased by 12 per cent, mainly due to the significant increase in vehicle imports by 61.4 per cent. However, import expenditure on home appliances declined significantly during the month.
In February 2014, workers' remittances increased by 6.9 per cent to US dollars 502 million from US dollars 469.4 million in February 2013. Accordingly, cumulative inflows of workers' remittances during the first two months of 2014 amounted to US dollars 1,057.5 million, a rise of 8.8 per cent from the corresponding period of 2013.

Net inflows to the government securities market upto 21 April 2014 amounted to US dollars 123.3 million, comprising net inflows to Treasury bills and Treasury bonds amounting to US dollars 99.8 million and US dollars 23.5 million, respectively. The investment threshold for foreign investments in government securities has been fully utilized and it has resulted in relatively lower levels of foreign investments in government securities market.

In the meantime, inflows to the government on account of long term loans upto February 2014 were US dollars 119.9 million compared to US dollars 300.7 million during the corresponding period of 2013. Foreign investments in the Colombo Stock Exchange (CSE) recorded a cumulative net outflow of US dollars 55.9 million upto 21 April 2014 including primary market inflows upto end February 2014 amounting to US dollars 4.3 million. In 2013, Foreign Direct Investments (FDI) including foreign loans amounted to US dollars 1,421 million, compared to US dollars 1,382 million in 2012 while, inflows to the Licensed Commercial Banks (LCBs) and Licensed Specialised Banks (LSBs) increased resulting in a net increase of US dollars 1,781 million in 2013.

Sri Lanka also successfully issued its seventh international sovereign bond in April 2014.
The 5-year international sovereign bond of US dollars 500 million was issued at a yield of 5.125 per cent per annum. The issue represents the balance of the US dollars 1,500 million approved international sovereign bond programme for 2014, of which US dollars 1 billion was issued in January 2014 at a yield of 6.0 per cent per annum.

Sri Lanka's textile & garment exports grow 6.6% in Feb'14

Fibre2Fashion - 06/05/2014

Sri Lanka’s earnings from exports of textiles and garments grew by 6.6 percent to US$ 396.2 million in February 2014, compared to earnings of $371.6 million recorded in same month last year, according to a press release on ‘External Sector Performance – February 2014’ issued by the Economics Research Department of the Central Bank of Sri Lanka.

The statement reflected two key trends in Sri Lanka’s textile and garment trade—an increase in apparel exports to non-traditional markets and a higher local value addition in the clothing industry.

“A notable increase of 35.7 per cent was observed in export of garments to non-traditional markets, reflecting greater diversification of markets in the industry,” the press release said.

Meanwhile, Sri Lanka’s garment exports to the US and the EU increased by 8.8 percent and 8.7 percent, respectively, during February 2014.

“Despite the strong growth in textiles and garment exports, textiles and textile article imports declined by 6.4 percent, reflecting higher domestic value addition in the garment industry,” the statement said.

In January-February 2014, Sri Lanka’s textiles and garments exports jumped 14.6 percent to $808.2 million, as against exports of $705.5 million made during corresponding period last year.

On the other hand, imports of textiles and textile articles declined by 5.5 percent to $346.1 million during the two-month period, compared to imports worth $366.1 million made during the same period last year.

In 2013, Sri Lanka’s earnings from textile and garment exports grew by 13 percent year-on-year to $4.508 billion, while its value of imports declined by 9.7 percent year-on-year to $2.045 billion.

Africa’s Switzerland hunting for Sri Lanka trade for the first time

Asian Tribune - 06/05/2014

Bothata Tsikoane, the New Delhi based High Commissioner of Lesotho (left) discusses with Rishad Bathiudeen (Minister of Industry and Commerce of Sri Lanka-right) on 25 April in Colombo.

The only country in the world to be entirely surrounded by another country and also called as Africa’s Switzerland, signaled on 25 April for the first time that it is now ready to initiate multi-faceted bilateral ties with Sri Lanka. “We can begin our bilateral trade with Ceylon Tea exports to Lesotho. Then we can proceed to agriculture cooperation” said an upbeat Bothata Tsikoane, the New Delhi based High Commissioner of Lesotho for Sri Lanka on 25 April in Colombo.

Bothata Tsikoane was addressing Rishad Bathiudeen (Minister of Industry and Commerce of Sri Lanka) on 25 April at EDB in Colombo during his first courtesy call made on Minister Bathiudeen.

“We want to establish bilateral cooperation with Sri Lanka in a more formal way and in a multi-faceted way. Then we want to see about the strategic hub outlook of Sri Lanka so that we can make use of it. We can begin our bilateral trade with Ceylon Tea exports to Lesotho. Then proceed to agriculture cooperation” said Tsikoane on 25 April. “Our country is described as the Switzerland of Africa due to its snow-capped mountains and scenery therefore it is a key tourist attraction in the region. We have a stable economic outlook, and though Lesotho industry sector is not as diversified as Sri Lanka’s, our garment industry plays a key role in the economy. In fact, it’s the dominant industry for us. We like to send our garments to South and East Asia too. Since we import most of our food needs from South Africa, including rice, we can absorb Sri Lankan food exports, especially rice. We can achieve these by firstly establishing bilateral cooperation in a more formal way” (HE) Tsikoane stressed.

According to the Department of Commerce, Sri Lanka’s trade with Lesotho is almost minimal with a total trade $ 0.03 Mn (only) in 2012. More than 75% of food requirements of Lesotho are imported to the country, with only around 25% of the requirement produced inland.

Responding to Tsikoane, Minister Bathiudeen said: “Sri Lanka is the emerging strategic hub located in South Asia and in 2013 we have shown record apparel earnings despite difficult international market conditions. Lesotho is a promising virgin market for Sri Lanka’s exports and our exporters will be glad to make their entry which I and my Ministry can facilitate. Our apparels are readily snapped up by top global brands. We invite Lesotho’s apparel firms to invest in our reputed apparel sector, partner with it in JVs and use our hub positioning to reach the Asian markets. I and my Ministry are ready to extend our fullest support to investors from Lesotho. We are also ready to supply you with renowned Ceylon Tea. As we are now a rice exporter, I am pleased to say that Lesotho can import our rice as well. We already export rice to several African countries -Kenya, Somalia, Ethiopia- and also to Dubai. We are open to agricultural and other types of cooperation with Lesotho and I believe that such initiatives can be followed successfully once ties are more formalised.”

Both Tsikoane and Minister Bathiudeen also mulled other potential areas of cooperation to strengthen bilateral understanding.

Lesotho to begin economic ties with tea, rice imports

Lanka Business Today - 05/05/2014

The only country in the world to be surrounded by another country and also described as Africa’s Switzerland, is now to initiate multi-faceted bilateral ties with Sri Lanka.

“We can begin our bilateral trade with Ceylon Tea exports to Lesotho. Then we can proceed to agriculture cooperation” said an upbeat Bothata Tsikoane, the New Delhi based High Commissioner of Lesotho for Sri Lanka.

The Lesotho envoy made these observations while meeting Rishad Bathiudeen, Minister of Industry and Commerce of Sri Lanka on 25 April at the Export Development Board offices in Colombo during his first courtesy call made on Minister Bathiudeen.

“We want to establish bilateral cooperation with Sri Lanka in a more formal way and in a multi-faceted way. Then we want to see about the strategic hub outlook of Sri Lanka so that we can make use of it. We can begin our bilateral trade with Ceylon Tea exports to Lesotho. Then proceed to agriculture cooperation,” said the ambassador.

“Our country is described as the Switzerland of Africa due to its snow-capped mountains and scenery therefore it is a key tourist attraction in the region. We have a stable economic outlook, and though Lesotho industry sector is not as diversified as Sri Lanka’s, our garment industry plays a key role in the economy. In fact, it’s the dominant industry for us. We like to send our garments to South and East Asia too. Since we import most of our food needs from South Africa, including rice, we can absorb Sri Lankan food exports, especially rice. We can achieve these by firstly establishing bilateral cooperation in a more formal way,” ambassador Tsikoane stressed.

According to the Department of Commerce, Sri Lanka’s trade with Lesotho is almost minimal with a total trade $ 0.03 million (only) in 2012. More than 75% of food requirements of Lesotho are imported to the country, with only around 25% of the requirement produced inland.

Responding to ambassador Tsikoane, Minister Bathiudeen said: “Sri Lanka is the emerging strategic hub located in South Asia and in 2013 we have shown record apparel earnings despite difficult international market conditions. Lesotho is a promising virgin market for Sri Lanka’s exports and our exporters will be glad to make their entry which I and my Ministry can facilitate.

"Our apparels are readily snapped up by top global brands. We invite Lesotho’s apparel firms to invest in our reputed apparel sector, partner with it in JVs and use our hub positioning to reach the Asian markets. I and my Ministry are ready to extend our fullest support to investors from Lesotho. We are also ready to supply you with renowned Ceylon Tea. As we are now a rice exporter, I am pleased to say that Lesotho can import our rice as well. We already export rice to several African countries - Kenya, Somalia, Ethiopia - and also to Dubai. We are open to agricultural and other types of cooperation with Lesotho and I believe that such initiatives can be followed successfully once ties are more formalised,” said the minister.

Both ambassador Tsikoane and Minister Bathiudeen also discussed other potential areas of cooperation to strengthen bilateral understanding.

Sri Lanka exports up 5.4-pct in February, imports fall

Lanka Business Online - 05/05/2014

Sri Lanka's exports rose 5.4 percent in February 2014 from a year earlier, with apparel exports up 6.6 percent, while imports fell amid weak credit growth, official data showed.

In the first two months of the year exports were up 13.9 percent to 1,739 million US dollars, the Central Bank said.
Agricultural exports rose 15.3 percent to 201.2 million US dollars with tea up 11.7 percent to 115.6 million US dollars.

Textile and garment exports were up 6.6 percent to 396.2 million US dollars with export to the USA up 8.8 percent and to the EU up 8.7 percent.

Imports fell 6.2 percent to 1,344.7 million US dollars. Consumer goods rose 7.2 percent to 223.8 million US dollars and intermediate goods fell 4.7 percent to 827.4 million US dollars.

Fuel imports were a slight 0.6 percent up to 420.9 million US dollars.

Textile and textile articles were down 6.4 percent to 152.5 million US dollars despite higher apparel exports, which the central bank said was due to local manufacture of inputs.

Investment goods fell 17.7 percent to 292.6 million US dollars in February, with building materials down 21.8 percent to 81.8 million US dollars and transport equipment down 53 percent to 39.6 million US dollars.

The trade deficit contracted 20.7 percent to 503.7 million US dollars.
In the first two months of 2014, exports rose 13.9 percent to 1,739 million US dollars from a year earlier, imports rose just 1.1 percent to 2,998.6 million US dollars and the trade gap contracted 12.5 percent to 1,259 million US dollars.

Sri Lanka's trade deficit is triggered when foreign exchange earnings outside of exports such as through worker remittances, tourism or even foreign borrowings trigger imports.

High volumes of exports also trigger more imports when the proceeds are spent.

Imports usually fall when credit growth is weak and not all foreign receipts are spent within a given period, resulting is build ups of domestic liquidity and foreign reserves.

Sri Lanka's credit growth has slackened after a credit bubble fired a balance of payments crisis in 2011/2012. In February private credit fell in absolute terms.

Fadna Cinnamon Tea gets certification of Pure Ceylon Cinnamon

Daily Finance Times - 05/05/2014

The Fadna Cinnamon Tea, produced and distributed by Food and Nature Company was recently awarded the Pure Ceylon Cinnamon Quality certificate by Sri Lanka Export Development Board. This certification which is awarded only for highest quality export products is granted on the recommendation of a committee of experts appoined by the SLEDB. Here Minister of Industries and Commerce Rishard Bathiudeen awards the certificate to the Marketing Manager of the Food and Nature Company, Udara Mangala at a ceremony at the SLEDB