Foreign Direct Investments (FDI) continue to flow to Sri Lanka with last year clocking a record US$ 234 million, up by 11% over 2003.
BOI said the record figure was a reflection of international investor confidence in the Sri Lankan economy.
`This increase is unprecedented in an election year, during which historically FDI inflows have contracted. Considering the absence of large privatizations, reaching this record investment level in 2004 is a great achievement for Sri Lanka,` BOI Chairman and Director General Saliya Wickramasuriya said.
In 2004, the largest single contribution came from Swiss cement manufacturer Holcim, who invested over US$ 50 million in its cement manufacturing facility.
Malaysian cellular mobile network MTN/Dialog came in a close second by committing nearly US$ 40 million to expand its operations, increasing the rate of mobile telecommunication penetration in Sri Lanka.
According to the BOI another significant deal in 2004 was the investment of the HSBC - whose motto is `The world`s local bank`- with its new Business Process Outsourcing (BPO) operations in Sri Lanka. `Investing here reflects this Fortune 500 Company`s confidence that Sri Lanka too, like neighbouring India, has the potential of attracting upper-end service projects of this nature,` BOI said.
Other important sectors in which FDI took place were the manufacture of non-metallic minerals, textiles and apparel industries; food beverage and tobacco products; chemical, petroleum and rubber products; manufactured products; fabricated metal products, machinery and transport and wood and paper products.
FDI inflows by country were led by Switzerland, with the UK, Malaysia and India following closely.
The Services sector recorded the highest percentage (47.7%) of FDI inflows, indicating a continuing trend from manufacturing to more `people-oriented` and knowledge-based industries.
Investment deals in February so far
During the first half of February the Board of Investment has signed the following agreements, largely involving local investments.
Ceyspence Ltd., formalized an agreement to provide international sea cargo operation services. The Company has arranged to purchase a German-built ship that has a capacity of 600 containers. The cost of the project is Rs. 624 million and it will employ 50 people at capacity.
Avocadia Ceylon Ltd., signed an agreement to process avocado for export purposes. The project, which is costing Rs.23 million, will employ 55 individuals at capacity. According to Company sources, avocado is a seasonal fruit that is good for the heart. The Company believes that the market is now ready for avocado exports and they intend to target the European market for this purpose. The avocados for this purpose are sourced from suppliers from Kandy. The project will be located at Wathupitiwala.
An agreement was also signed by J. I. Quilts Ltd., to provide quilting services. The cost of the project is Rs.33.45 million and it will employ 52 people at capacity. The factory will be located at Peliyagoda.
Aviva Regional Operating Headquarters and Customer Services Ltd., signed an agreement to establish a regional headquarters company.
Sheraton Institute of Info Technology Ltd., signed an agreement to set up an IT campus. The project will cost Rs.170 million and will be located in Dehiwela. The campus has alliances with Excelsior College, which is a member of the University of the State of New York, and ReiNET Institute of India.
Jostein Viksund Design and Model Centre Ltd., finalised an agreement to manufacture moulds, boats, boat accessories and automotive components for export. The cost of the project is Rs. 20 million and it will be located at Negombo.
Another agreement was signed by Ceylinco Housing Development Corporation Ltd., to set up a housing complex in Havelock Road, Colombo 5. The cost of this project is Rs. 90 million.