sri lanka - · pdf filetrategically well positioned and famous for its tea, cricket, and...

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Strategically well positioned and famous for its tea, cricket, and outstanding natural beauty, Sri Lanka has made giant socioeconomic strides since 2009, when three decades of conflict came to an end and a new dawn broke over the island.

The country is aspiring to become a central hub for the South Asian region; by capitalizing on its excellent geographic loca-tion, relatively low cost of implementation, and well-educated workforce, it is sure to accomplish its larger development plans at several levels.

Heavy government spending has funded important new infrastruc-ture projects that form part of a long-term development drive to boost living standards for the country’s 21 million people by enhancing national cohesion and strengthening the position of Sri Lanka as a global player. This impressive success has, not surprisingly, caught the eye of foreign investors who have been flocking to this corner of South Asia in record numbers to explore a vast array of exciting invest-ment opportunities.

Widespread confidence and positivity about Sri Lanka’s future economic prospects is certainly well placed, with prestigious finan-cial organizations like the International Monetary Fund (IMF) and the World Bank praising its recent achievements built on the core pillars of economic and social stability. Robust GDP growth, low inflation, and job creation are the new priorities.

Gotabaya Rajapaksa, secretary to the Ministry of Defence and Urban Development, has been a key figure in Sri Lanka’s push to achieving its various socioeconomic goals and social inclusion and reconciliation.

“When you consider the past five years, I think our achievements have been even bigger than our victory against terrorism,” the secretary states. “Our success has relied upon investing purposefully in key areas such as infrastructure and education—moves that are also helping areas affected by the conflict and pushing toward reconciliation among com-munities. This is something that is not easy in any part of the world.”

The result, of course, is that Sri Lanka now has a very peaceful and stable environment and investors can find interesting opportunities in many areas.

“We have universal education from kindergarten to university level, hence our literacy rate is very high,” Rajapaksa says. “Our graduates are very bright and ready to contribute their knowledge in the work-place. To potential investors, we offer very favorable business conditions developed by our government. Finally, we live in a very pleasant and safe environment that is not easily matched in this region, so Sri Lanka can be also a base for doing business in India and other countries in the region.”

Moving Quickly Has Paid DividendsIn order to financially fuel this process, the Central Bank of Sri Lanka is

SRI LANKACelebratingPeace and GrowthSocial and political stability have combined to fuel impressive economic growth during the past five years.

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aiming to ensure economic and financial system stability while providing prudential and proactive policy recommendations to the government adviser on economic affairs.

Governor Ajith Nivard Cabraal, who heads the forward-thinking bank, is happy to share the secret to this success: “We realized that as soon as the war ended, we needed to create livelihood opportuni-ties in all of Sri Lanka’s regions. In many countries, reconciliation has failed because improving the livelihood of citizens took a long time to be transmitted. We didn’t make that mistake and were very quick in taking banking finance services to those areas and ensured that the banks were able to provide loans and support the people. We are very proud of that amazing transformation because it hap-pened so quickly.”

According to Cabraal, the next five to 10 years will be extremely im-portant for Sri Lanka as so many new investment projects and ventures will be established all over the island.

“We have structured the economy to be centered around five large hubs: maritime, aviation, knowledge, commerce, and energy,” he says. “All these areas have been opened to greater foreign investment in the recent past. Sri Lanka is well positioned to go through a prolonged period of growth, peace, and stability.”

Switching the spotlight to Sri Lanka’s strong track record on fiscal matters in recent years, including consistent economic growth and a sharp fall in inflation, Cabraal adds that the last four years have been some of the best in Sri Lanka’s history.

“We have posted average GDP growth of 7.5%, inflation is now in the single digits, debt levels are decreasing, and our reserves are increas-ing,” he says.

In the meantime, Minister of Industry and Commerce Rishad Bathiy-utheen notes that while Sri Lanka is presently embracing economic diversification, it is continuing to exploit the comparative advantages of local companies already present in the international marketplace, and of domestic firms looking to expand overseas.

“Within the context of stable growth,” he says, “Sri Lanka offers

100% ownership to foreign investors that arrive with a sound develop-ment plan to this dynamic market in which to develop their business, profiting from comparatively lower costs and other benefits.”

This remarkable country’s banking and finance sector is well regu-lated, safe, and robust, making it an attractive environment for local and foreign financial institutions looking to tap into the fast-growing middle class who require a range of financial services.

DFCC Vardhana Bank (DFCC) was, for example, one of the lead-ing financial institutions to continuously fertilize the local business environment and make the current shift possible. As one of the oldest development banks in the world, DFCC has reinvented itself to match the aspirations of an emerging economy and to fuel the development of small and medium-size enterprises (SMEs).

Arjun Fernando, DFCC’s general manager, director, and chief execu-tive, says: “We have lots of expertise in the energy arena and are now looking at other sectors, such as construction, health, and education, to see how we can match the government’s ambition with our own progress. We are proud that more than 15% of our business is now in the SME sector, where we have helped small startups become success-ful companies.”

Finance Is a Fast-Growing SectorWithin the process of modernization of the financial sector, Nations Trust Bank is positioned as one of the fastest-growing banks in Sri Lanka. It has an enviable portfolio of personal and commercial financial products and services that caters to the varying requirements of individual, corpo-rate, and institutional clients.

Piyadasa KudabalageManaging Director Sri Lanka Insurance

Ajith Nivard Cabraal Governor, Central Bank

Gotabaya Rajapaksa Secretary to the Ministry of Defence and Urban Development

Now celebrating 15 years in existence, this truly customer-centric fi nancial institution shook the typical commercial banking arena with its new concepts when it fi rst arrived on the scene.

“We also made a huge impact in the credit card market by arriving with American Express and have been able to retain a strong position in this fi eld with the underlying spirit of credit and consumer-based ap-proach,” says former chairman Arjuna Gunaratne.

CEO and director Renuka Fernando adds that through its own performance and productivity, Nations Trust Bank has shown its strength and strives to serve the country by using global best banking practices. In addition, the group’s corporate social responsibility programs show its commitment toward helping the development of the Sri Lankan society at large.

“Nations Trust Bank strives at understanding the consumer to serve the country better,” she says. “We are heavily involved in the sponsorship of schools and encouraging laboratories and projects around e-learning methods, as knowledge is regarded as crucial to support economic and social development.

“Key challenges for the future are to con-tinue boosting innovation, to actively under-stand opportunities, and to act as a facilitator to make these available at a market level.”

The Impacts of Diversifi cationOther leading fi nancial entities are entering into business lines that refl ect the country’s diversifi cation.

Now in its fourth decade, LOLC has been reshaping its business from one primarily steeped in fi nancial services to a multifaceted conglomerate with business ventures in agriculture, renewable energy, leisure, construction, manufacturing, and trading. LOLC remains a key player in promoting the widening of the economy into new niches, particularly through the empowerment of SMEs, while at the same time rooting its traditional business knowledge in its historic fi elds of expertise.

Group managing director and CEO Kapila Jayawardena says: “This is the time to invest as Sri Lanka has moved to the middle-income range with the consequent higher demand for goods and services. We are well positioned to take advantage of this rapid movement.”

As the economy expands, the insurance sector has a duty to adapt its services and scope to the current and future trends of the country. Created in 1962, Sri Lanka Insurance has grown massively over the past fi ve decades and is now the largest government-owned insurer in Sri Lanka, partly due to its vast range of personal and business insur-ance policies.

Managing director Piyadasa Kudabalage says that despite the density of the insurance market and its gradual sophistication into more complex products, Sri Lanka Insurance has managed to retain a market-leading position over the years.

“We are the fi nest insurance corporation, particularly since no one else has the capacity that we have to promote this kind of business in Sri Lanka,” he says. “We are the biggest fund-holder in the market and are looking toward diversifi cation of our portfolio to mitigate the risk. We have the best rating, and when you look at our insurance segments, we have a 20% share of the life insurance market and a 25% share of the general insurance market. This is within a dense and complex market of 22 companies. We insure Sri Lanka’s entire garment sector. We continue to develop the insurance market and are gearing up for segmental growth in the future and are looking to new customer needs.”

One of the key reasons for the compa-ny’s ongoing success is the respect people have for the brand. Kudabalage is confi dent that a planned initial public offering (IPO) in the next couple of years will lift its reputa-tion to another level and introduce it to a wider audience. “We are inviting the private sector to come and invest in Sri Lanka,” he adds. “We are the perfect country in which to invest and have a great investment environment.”

Meanwhile, from humble beginnings in the food industry, Ceylon Biscuits Ltd. (CBL) has become one of the fastest-growing and largest conglomerates in Sri Lanka. The company manufactures and markets many leading brands of biscuits, confec-tioneries, cereal, and organic fruit products. Recognized as a technol-ogy- and innovation-led producer, CBL caters to a large overseas market that comprises more than 50 countries. Signifi cant investment in several facilities and modern equipment allows the company to produce up to 50,000 metric tonnes of biscuits as well as hundreds of thousands of cakes, jellies, cereals, and similar products.

CBL chairman Mineka P. Wickramasingha is delighted with the fi rm’s performance, which he credits to a winning combination of deter-mination and innovation—but he is hungry for more success, particu-larly in overseas markets. To help achieve this aim, the fi rm is investing in a new production site in Bangladesh. “We have around 55% of the Sri Lankan market,” Wickramasingha reveals. “Our quality and innova-tion are essential to our expansion strategy, which will help us in export-ing our products to other areas.” The chairman also puts his employees at the forefront of his actions, valuing each of them and wanting to raise their standards of living. In his opinion, contribution to the socioeco-nomic development of the country should be a focus of every business.

“A key challenge for the future is to continue boosting innovation.” Renuka Fernando, CEO and director, Nations Trust Bank



Airport and Aviation Services (Sri Lanka) Ltd. (AASL) is a fully government-owned company with statutory powers to manage and develop civil airports in Sri Lanka; it is also one of the nation’s most profitable blue-chip firms.

The dynamic company was the brains behind construction of the Mattala Rajapaksa International Airport (MRIA), which commenced operations in 2013 and is one of the few airports in the region with a large enough runway to handle the giant Airbus A380.

The company is incredibly proud of the state-of-the-art airport that will eventually have the capacity to accommodate 5 million passengers and 150,000 tonnes of cargo per year. The airport’s location near several stunning wildlife sanctuaries and the beautiful beaches of the island’s southeast region means it will become a tourism hub in its own right over the next few years and act as the gateway to this corner of the island. The company also looks after Bandaranaike International Airport (BIA) in Colombo.

AASL chairman Prasanna J. Wickramasuriya explains why MRIA was needed and why passenger capacity at BIA will also increase over the next few years: “BIA had an original capacity of 6 million passengers per year, and in 2009 we received 4.2 million passengers,” he discloses. “This figure had risen to 7.3 million arrivals by 2013 so had almost doubled. You can imagine what that kind of growth implies.

“Now we are trying to improve the connectivity and infrastructure. We plan to increase the passenger capacity by another 9 million, thereby increasing the airport’s capacity to 15 million by 2017. On the connectivity front, in 2013 we witnessed three international airlines—British Airways, Korean Air, and Turkish Airlines—starting operating to Colombo. So many other airlines want to come and are negotiating their entrance with us. This situation is very encouraging.”

Wickramasuriya sees the new airport as an essential component of the island’s efforts to become a transshipment hub. He says: “I want to see Sri Lanka become a regional aviation hub. Our location is essential to achieving this, as Sri Lanka is four hours from all of the major cities in Asia and eight hours from three continents.

MRIA is in a very strategic location, as it is just 16 miles from the seaport where 250 vessels pass every day. The government has very clearly identified this as an international sea and air hub. Investors can come to the area and put factories to deliver and re-export products fol-lowing the model of Singapore or Dubai.”

The chairman continues: “By aviation I mean the total industry: airport, airlines, MRO [maintenance, repairs, and operations], civil aviation training, as well as the catalytic beneficiaries like cargo and air-sea transshipment. I am very optimistic about achieving hub status in aviation. We possess excellent human resources and knowledge base, factors that will aid us immensely in our effort, and I’m sure this dream is realizable.”

Modernization at Its BestSri Lanka is also home to more than 300 IT and business process outsourcing (BPO) companies, making it one of the most competitive markets worldwide. The sector offers a wide range of products in soft-ware development and a vast pool of certified accountants to further fuel their process of expansion of sophisticated analytics to global customers, including many in the travel and tourism industry.

CodeGen is an excellent example of a company that reflects the world-class entrepreneurial spirit of Sri Lankan people.

“We are a company that started with no investment and just two people. We have managed to grow to 250 employees through hard work, innovative ideas, and a customer-centric approach,” says Code-Gen CEO and chief system architect Harsha Subasinghe.

“We have gained an international reputation by offering some of the most globally competitive products. Our star product is the innovative



Soaring Sky-HighWith businesses thriving, Sri Lanka is expanding its infrastructure to match the demands of tourists and investors alike.

Ashok PathirageChairman/Managing Director Softlogic

M.P. WickramasinghaChairmanCeylon Biscuits Ltd.

Prasanna J. WickramasuriyaChairman, Airport and Aviation Services Ltd.



TravelBox, which is a complete end-to-end solution for the travel indus-try,” he says. “TravelBox is a cost-effective, high-performance platform that automates travel business processes, including inventory, costing, pricing, documentation, communication, and accounts. We focus on tour operators, airlines, ground handlers, destination management companies, accommodation providers, cruise liners, travel agents, and so on. TravelBox is being used by some of the largest players in the travel industry.”

Being a pivotal player in bringing technology and expertise to the country and as the national telecommunications provider, Sri Lanka Telecom (SLT) is one of the largest and most respected corporations in the country. It is investing substantial sums to boost capacity, increase network speed, and extend its already large geographical reach. The group has more than 6 million customers, including multinational corporations, plus large and small corporate, public sector, retail, and domestic clients. Its high-tech facilities and services include voice, data, broadband, wholesale, enterprise, TV, and mobile services.

“Our business strategies are aligned with the government’s vision for the future,” states Lalith De Silva, SLT group CEO. “We are invest-

ing in new infrastructure to increase efficiency and want to launch new upgrades in the mobile sector. One of our key advantages is our brand—people trust us and our exceptionally good customer service.”

As Sri Lanka and Sri Lankans have become better off, the demands within the market have changed. To accommodate this fresh demand, several companies have emerged. Among these, Softlogic Holdings PLC is to be highlighted.

Established in 1991, it is recognized as one of Sri Lanka’s most dynamic conglomerates, having transformed itself from a software developer into a leading player in the ICT, healthcare, retail, financial services, automobile, and leisure industries. The group employs more than 6,500 individuals, and its representations and strategic alliances with reputed global institutions and large multinationals confirm its unparalleled local stature.

Focused on a high-performance culture, Softlogic’s ethos involves putting the customer at the center of its activities; by innovating, the firm is able to develop tailored and groundbreaking solutions for customers. “I have ambitions for Softlogic to be the biggest con-glomerate in the country,” says chairman and managing director Ashok Pathirage.

“It is not that I want to compete with people,” he continues. “There is so much space to grow. I don’t look to take people out; I just want us to be No. 1. We are one of the most aggressive companies on this island. We have a very clear vision of where we want to reach. We want to lead the sectors we work in. We are a great company to work for or invest in.”

According to Pathirage, the group’s most dynamic sectors are

“Sri Lanka is four hours from all of the major cities in Asia.”

Prasanna J. Wickramasuriya, AASL Chairman

Ceylon Biscuits LimitedPannipitiya, Sri LankaTel: +94 11 500 0000www.muncheelk.com

Caring with quality, consciousness and innovationBeing market leaders, Ceylon Biscuits has been baking cookies and crackers for almost 50 years driven by passion for perfection while creating a solid culture of care. Now in 50 countries worldwide, we are expanding into new markets.

Softlogic Holdings PLCSoftlogic Building,14, De Fonseka Place,Colombo 05, Sri Lanka

Tel: +94 11 557 5000 | www.softlogic.lk

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LEISURE ICT

One of Sri Lanka’s most dynamic and aggressive conglomerates.

Strong track record since 1991.Diversified Portfolio: ICT, Healthcare, Retail, Financial

Services, Automobiles and Leisure. Distributor of many international brands.

Open for partnerships.

leisure and retail, meaning the company is ideally positioned to take advantage of the ongoing boom in tourism numbers.

“We need to invest and focus on tourism,” he remarks. “Getting quality tourists to come here and make them spend more money is our priority. That is why our retail is related to tourism. We are the largest company that owns most international apparel fashion franchises.”

Fertile Ground for InvestmentDue to favorable climate conditions, rich ground, and abundance of water, Sri Lanka has historically been a land where agriculture has flourished. Due to the implementation of technology, good practices, and the strength of local companies to conquer international markets, the sector is taking further steps toward increasing its competitiveness. A perfect embodiment of this approach is the International Foodstuff Group of Companies (IFCO).

Engaged in the export of quality fresh vegetables, fruits, and food products from Sri Lanka, and as a member of the National Chamber of Exporters of Sri Lanka, it is well positioned to take advantage of the country’s better transport and logistical connectivity to regional and international markets. IFCO wants to further capitalize on Sri Lanka’s strategic position and strengthen exports of agricultural produce. The company is optimistic about the opportunities offered by the wider South Asian market.

After being in the market for more than three decades, IFCO has become a clear leader in the segments in which it operates. It also puts a lot of emphasis on quality.

“We export our products in a way in which they are better

preserved,” says IFCO founder and chairman Sarath De Silva. “We ensure that our products are very hygienic and free of chemicals.” The forward-looking chairman is now aiming to take his business further and expand it by entering into joint ventures and partnerships. He is also keen on technology transfer and know-how especially from Eu-rope. “We want to partner with companies that use the best machinery to cut time and energy consumption,” he says.

Another outstanding example of a Sri Lankan company is Sunshine Holdings PLC, which started operating almost 50 years ago. The company is extremely proud of its reputation as one of Sri Lanka’s most respected conglomerates. Its core areas of focus are healthcare, agribusiness, and fast-moving consumer goods.

The firm, which also has strategic investments in metal packaging, energy, leisure, telecoms, and commodity brokering, is a large producer and distributor of locally sourced tea under the Zesta brand.

Sri Lankan tea is considered to be one of the best-quality teas in the world. The excellent climate and more than 100 years of expertise in tea production makes Sri Lankan tea truly unique. As Vish Govindasamy, Sunshine Holdings group managing director, comments: “Our tea brand Zesta is the leading brand in Sri Lanka, so we are now keen to enter international markets. Quality, trust, and consistency are our trademarks. We invite strong international partners and distribu-tors to take Zesta forward and capture global tea drinkers, who value high-quality, hand-picked tea with a unique aroma and flavor. We are an excellent ally, because we are transparent and a listed company. We have independent directors and already have successful relationships with international partners.” •



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