‘Landmark MoU unlocks door to S’Pore based new global giants to enter Sri Lanka’ says Minister Rishad

The landmark MoU inked today (30 May) between Sri Lankan and Singapore businesses will open our doors to keen global giants operating in Singapore over a long period and newly relocating multinationals in S’Pore.

“Today’s landmark MoU between the Singapore Business Federation and the Sri Lanka-S’Pore Business Council not only forges a viable B2B linkage between Sri Lankan and Singaporean indigenous businesses but also unveils a pragmatic mechanism to more than 7000 well established global multinational giants already operating in Singapore and scores of newly relocating multinationals to Singapore who are now focusing on Asia as the next high growth region, to enter Sri Lanka” announced Rishad Bathiudeen, Minister of Industry and Commerce of Sri Lanka on 30 May.

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Minister voiced this to the top officials of his Ministry after he witnessed the signing of MoU along with the visiting Foreign Minister and Law Minister of Singapore, H. E. K.Shanmugam, on 30 May at the Ballroom of Galadari Hotel, Colombo. “Therefore this is a new chapter in B2B commerce in Sri Lanka’s overall trade history” Minister Bathiudeen added.
The landmark MoU, inked just prior to the commencement of the first ever ‘Sri Lanka – Singapore Business Forum’ held on the same day at Galadari Hotel, while opening investment opportunities for Singapore businesses and established global giants operating from Singapore, also has more objectives, said Minister Bathiudeen.

“This MoU will even enable Singapore businesses to reach out to our growing regional trade Chambers, will empower the counterpart Chamber at our end to streamline Singapore business meetings with our government officials and the private sector, as well as will increase knowledge transfers and foreign exchange from Singapore to Sri Lanka in a considerable manner.”

The MoU was signed by Teo Siong Seng, Vice Chairman of the Singapore Federation & President of the Singapore Chinese Chamber of Commerce & Industry on behalf of Singapore Business Federation (SBF) and Shamil Mendis, President of Sri Lanka – Singapore Business Council (SLSBC) on behalf of SLSBC and witnessed by Rishad Bathiudeen, Minister of Industry and Commerce of Sri Lanka together with His Excellency K.Shanmugam, Foreign Minister and Law Minister of Singapore at 9.50am on 30 May.

The event saw presentations to visiting high profile Singapore delegation by the BoI, the Central Bank, Sri Lanka Tourism Development Authority, along with two sessions of business meetings and the networking lunch attended by 100 Lankan participants from 64 firms and 22 representatives from Singapore delegation.

The business forum is the first of this nature in Sri Lanka – Singapore bilateral trade history. 127 Sri Lankan business reps and 22 Singaporean reps took part in it representing 64 Sri Lankan firms and 18 Singaporean entities.

Among the Singaporean companies, diversified firms and state agencies represented in the visiting delegation are the South Asia Business Group (business networking platform), Pacific International Lines (shipping), ST Engineering (integrated engineering), Auston Institute of Management (education), CHH Construction System Pte (construction and security systems), Cosmopolitan Real Estate Pte (boutique real estate), Design Team 3 (landscape & interior design), Falcon Incorporation (fit outs and premium furniture), Filtec Pte (automotive parts), Global Law Alliance (full service law), International Enterprise Singapore (S’Pore government agency driving its external trade), Infraco Asia (multilateral donor funding), Kumon Asia & Oceania (education), Luxasia Pte (luxury fragrance and cosmetics brand), Makara Investment Advisors Pte (financial services), Singbridge International (cities and urban development), Soilbuild Group Holdings (residential and business property), Thakral Group (multinational conglomerate), United Texmac (knitting) and Axxonsoft Asia (high end security software solutions).

Singapore is the fourth largest international trading partner of Sri Lanka. According to the Department of Commerce of Sri Lanka, Singapore's total trade with Sri Lanka in 2011 amounted to $1.94 Bn, of which $ 1.53 Bn were imports to Sri Lanka. From Singapore's end, Sri Lanka is the 37th ranked global trading partner. Singapore firms in Sri Lanka are active in property development (Overseas Realty (Ceylon) Ltd), tourism & hotels (Shangri La Hotels), food and beverage processing (Prima Ceylon, Asia Pacific Breweries), logistics (Keppel Logistics), telecommunications (LankaCom, subsidiary of Singapore Telecom), apparel (Ghim Li Group) and conventions and conferences (Pico Global Services). In February this year, the Singapore Business Federation (SBF) and the Board of Investment of Sri Lanka (BOI) signed a memorandum of understanding aimed at strengthening cooperation and promoting business and investment relations between the two countries, paving way for deeper collaboration between businesses of both countries.

Minister Bathiudeen addressing the event, continued: “I am pleased to observe that this is a bilateral win-win effort, at its best, contributing to Sri Lanka’s drive for the much needed next stage in our bilateral trade levels which now stands at $ 1.94 Bn by December 2011 which, in turn, is a huge 387% increase, compared to a decade ago in 2002 which was only $ 502 Mn. More importantly, there are no doubts that this event will enhance our export target of $ 20 Bn by 2020 under the able guidance of our H. E. the President Mahinda Rajapaksa. Though we have a negative trade balance with Singapore, I am also pleased to inform you that it has fallen by 21% in 2011” Minister Bathiudeen added.

Inviting Singaporean firms to partner with Sri Lanka and Sri Lanka’s interest for CEPA with S’Pore, Minister Bathiudeen said: “I invite Singaporean companies to invest here in our economic resurgence and also to reap additional benefits by making use of Sri Lanka’s many FTA’s specially the Indo-Lanka and, Lanka-Pakistan FTAs to your advantage. These two FTA’s alone give access to the major part of the coveted South Asian markets that many multinationals are very eager to enter. The consumption levels in both these markets are rising steadily offering significant promise. For example, automotives, telecommunications and IT, have been identified as high growth industries in both Indian and Pakistani markets. I believe for example that high-tech firms in technology smart Singapore can, using Sri Lanka as their electronic chip manufacturing base, and benefitting from geographical and FTA advantages, enter and supply these South Asian markets with high speed. As you may already be aware the Indian Personal Computer market alone grows 6% a year on average which shows the operating potential for Singaporean tech firms in Sri Lanka. I also would like to refresh our memories about Singapore’s Bilateral Investment Treaty with Sri Lanka which gives protection guarantee for Singaporean investments by no less than the constitution of Sri Lanka itself while the Double Taxation Avoidance Agreement, between both countries has now opened opportunities of tax exempt material imports by Singapore manufacturers to Sri Lanka. We keenly look forward to re-start Sri Lanka-Singapore Comprehensive Economic Partnership Agreement and to this end would strive to collaboratively establish a Joint Study Group so that the CEPA process becomes active. I believe that our historic friend Singapore too, would consider this joint initiative, in a positive light.”

“It is a widely known story in Sri Lanka that at one time we were looking to emulate Singapore’s economic success due to its high growth and progress which empowered it to victoriously stand on its own region today as a successful global hub. Perhaps we may continue to draw lessons from Singapore in future as well as we enter a peaceful era under the leadership of His Excellency the President Mahinda Rajapaksa, whose vision is to make our country the Economic Hub of Asia. Today both countries are advancing into yet another stage in Sri Lanka – Singapore historic relations in general, and specifically, in trade. The three events today, that is the visit of His Excellency K Shanmugam, the Foreign Minister and the Law Minister of Singapore with a high level delegation, the signing of Memorandum of Understanding (MoU) as well as the first ever Sri Lanka – Singapore Business Forum, are not just a bilateral event for us, but a historic B2B linkage between two hubs in Asia, in that, one a successful global hub, and the other, a future economic hub and as a result, I believe it is an important event for the South East Asian region but a momentous event for the overall South Asian region. The decision to enter into an understanding by both parties demonstrates the desire, and commitment of all concerned which is of utmost importance in the domain of bilateral cooperation between an emerging economic hub in South Asia and an important historic member of powerful ASEAN, which is called as the third largest economy in Asia, after Japan and China. The importance of today’s event is such, that I am given to understand that, due to the very strong demand for participation in this event, specially from our private sector, organisers were compelled to close registrations very early on and am pleased to observe that 100 Sri Lankan participants from leading companies registering for the event to meet with 21 delegates from leading Singapore companies. This not only shows the important role of the private sector in our bilateral trade, but also is a strong sign of things to come, in that the private sector’s role in fulfilling any unrealised bilateral trade potentials between the two economies as well as new avenues through trade cooperation for Sri Lanka in such promising sectors as green initiatives, bio technology, IT, outsourcing and advanced energy ventures such as hydrogen fuel, on which Sri Lanka is planning to start feasibility tests during this year with the valuable support of UNIDO.”

Commending the efforts of Sri Lanka Singapore Business Council in boosting bilateral trade between both economies, Minister Bathiudeen said: “Today I wish to acknowledge the significant contribution made by the Sri Lanka Singapore Business Council in recent years to facilitate the growth of bilateral trade by undertaking many activities such as several outward missions to participate in focused Sri Lanka Business Opportunity Seminars in Singapore, and proactively encouraging and assisting in the visits to Sri Lanka of delegations from various Chambers in Singapore. Today’s Business Forum is the culmination of the efforts of International Enterprise Singapore, the Singapore Business Federation, and the Sri Lanka Singapore Business Council, together with the Sri Lankan High Commission in Singapore, which began with a pre-mission Seminar in Singapore last month thereby successfully attracting the leading Singapore Companies, we see here today.”

Addressing the occasion, K.Shanmugam, Foreign Minister and Law Minister of Singapore said: “We are gratified by the intensive interest shown by forms from both countries. The presence of key Sri Lankan institutions such as the Ministry of Industry & Commerce, the BoI, Tourism Board, etc reflect the strong commitment of Government of Sri Lanka in positioning this country as a key investment destination. The diverse composition of Singapore firms here today indicates the tremendous interest of Singapore business towards growth opportunities in Sri Lanka. Singapore – Sri Lanka bilateral trade has increased by 6% in 2011 compared to 2011 (from Singapore’s side) to $ 1.5 Bn maintaining its upward momentum. Three months after the President Mahinda Rajapaksa’s visit to Singapore in February, today Minister Bathiudeen and I are witnessing the signing of MoU between Chambers of both sides. The broadening of linkages between our respective Chambers and strengthening of closer trade and economic ties through the signing of the MoU is timely. With the return of peace, Sri Lanka is placed to achieve its full potential.”

Shamil Mendis, President of SLSBC, addressing the event said: “A significant milestone has been reached in the business relations between Singapore and Sri Lanka with the signing of today’s MoU between SBF and SLSBC. The MoU confirms that not only has there been notable progress in our commercial relations, but it also lays the foundation for a significant enhancement of this relationship. Moreover, the decision to enter into an understanding demonstrates the desire and commitment of all concerned, which is of utmost importance to take this relationship to greater heights for the benefit of both countries.”

Leader of Singapore Business Mission to Sri Lanka, Teo Siong Seng, who has been conducting business with Sri Lanka for the last three decades and is the Managing Director of Pacific International Lines Ltd (ranked 19th amongst the top containership operators in the world) said: “With the opening of Myanmar and the stability in Sri Lanka, Singapore businesses see these two countries as the most promising markets at this moment and today’s MoU will be the key that will unlock this. In fact, for us, Sri Lanka is the most attractive emerging market in South Asia today. The B2B linkages between both countries are historic and very important and are strengthened by the Sri Lankan community in Singapore who bring in a lot of professionalism to this. The key sectors of investment scouted by Singaporean investors in Sri Lanka today are tourism and hospitality, hotel development and holiday chalets, logistics, IT, green initiatives, energy and collaboration in human resources. Also we are looking for collaboration in top infrastructure projects such as port and airports development, and airport and port management services. Also, many international companies are using Singapore as a regional base of operations. This is a timely event for Sri Lanka since many major US, EU and Japanese multinationals are coming to Asia by relocating to Singapore in a big way. We like Sri Lanka’s human resources and skills capacities which is an attractive factor for investing here.” Many members of the Singaporean delegation also voiced about Sri Lanka’s human resource capability in deciding to invest here. Durairaj Gireraj, Director, whose Singapore based Axxonsoft Asia Pte Ltd, US $ 8 Mn high tech firm is involved in such cutting edge IT solutions as IP-based physical security information management (PSIM), intelligent video analytics, video management software, and even facial recognition, said: “The MoU makes us to look closer at Sri Lanka and we are now planning to set up an office here. Sri Lanka is very receptive to industry development and investments with business environment being very conducive and supportive. We are here looking for partners in IT sector and the human resource and skills capacity here is attractive to us. We want to invest in electronic security industry to provide solutions to airports, seaports and commercial, shopping malls and real estate and commercial property sectors.”

- Asian Tribune –

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