EDB to boost electronic FDIs by 25%
By Madhusha Thavapalakumar
Sri Lanka is set to increase foreign direct investments (FDIs) into the electronics and electrical machinery (EEM) sector by 25% before the end of 2021 as part of Sri Lanka Export Development Board’s (SLEDB) Action Plan 2020.
Towards this end, the Ministry of Industrial Export and Investment Promotion, which overlooks the SLEDB, has already begun the search for an investor into this sector.
Speaking to The Sunday Morning Business, SLEDB Director General Jeevani Siriwardena noted the Ministry has called for a closed tender to find a well-reputed local agency with a wide global network which could bring an investor into the EEM sector.
“We are trying to get a Sri Lankan company to do that for us,” she added.
Providing further information, SLEDB Director – Export Services M.K.S.K. Maldeni noted that the investor who will be selected by the locally selected agency will enter into an agreement with the Board of Investment (BOI) and follow the usual procedures set for FDIs in the country.
Even though there is no definite timeline set for this plan, the SLEDB is optimistic of finding an investor in the near future.
“Tender has not yet closed. It is still on. Further, we have not yet set a FDI limit for the investor, but we are for sure looking for something significant,” Maldeni noted.
Prabhash Subasinghe, addressing his maiden press conference as the SLEDB Chairman, discussed the plan to increase investments into the EEM sector by 2021. “Attracting global EEM players into the country to create value chain linkages or joint ventures with Sri Lankan EEM exporters” is part of the SLEDB Action Plan 2020.
Further, the SLEDB is also planning to conduct an international trade event in Germany this year on the EEM sector of the country, in addition to inward trade missions with the Vietnam Chamber of Commerce and Industry (VCCI).
In 2018, the EEM industry’s contribution to total export revenue was $ 406 million compared to $ 371.48 million a year ago. The industry mainly caters to the industries of automobile, telecommunication, consumer electronics, biomedical, industrial automation, Internet of Things (IoT), and other verticals. The top 10 exporting destinations are Switzerland, the Maldives, the US, the UK, Hong Kong, Japan, China, Bangladesh, India, and Germany.
The major companies in the sector perform their manufacturing operations within the export processing zones under the purview of the BOI. The key players of the sector are Kohoku Lanka (Pvt.) Ltd., Okaya Lanka (Pvt.) Ltd., Lanka Hiqu (Pvt.) Ltd., Kramski Lanka (Pvt.) Ltd., Tos Lanka Co. (Pvt.) Ltd., Lanka Harness Co. (Pvt.) Ltd., Nippon Maruchi Lanka Electronics (Pvt.) Ltd., and CCS Lanka (Pvt.) Ltd.
According to the SLEDB, employment generation in this industry is approximately 30,000, including top-calibre researchers and design engineers. Currently, there are an estimated 75 companies engaged in design manufacturing and exporting electronic and electrical products.
The electronics sector accounts for 20-50% of the total value of exports of most countries in Asia. More than 80% of the world’s hard drives are made in the Association of Southeast Asian Nations (ASEAN) countries. Thailand is one of the largest electronics assembly bases in Southeast Asia with over 2,300 companies powered by 400,000 employees.