Amcham India Business Delegation to Sri Lanka – March 6 & 7, 2014
A 19-member Amcham delegation visited Sri Lanka on the 6th and 7th of March 2014. The visit was coordinated by Amcham Sri Lanka and the U.S. Embassy in Colombo.
Members of the delegation included the following:
- Mr. Vishal Wanchoo, Vice President Growth Initiatives & Business Development, General Electric Company (Leader of the Delegation
- Mr. Debobroto Banerjee, Director – Commercial, GE India
- Mr. Partho Banerjee, Head – International Business, Boston Scientific India Pvt. Ltd.
- Mr. Sanjay Banerjee, Regional Managing Director, South Asia, Zimmer India Pvt. Ltd.
- Ms Sharmila Barathan, Director – Corporate Affairs, GE South Asia, General Electric (GE India Industrial Pvt. Ltd. – India HQ)
- Mr. Ashok Brij, Vice President & Managing Director, Emerson Industrial Automation Electric Power Generation Pvt. Ltd.
- Mr. Prabal Chakraborty, Vice President & Managing Director, Boston Scientific India Pvt. Ltd.
- Mr. Rakesh Chitkara, Vice President, Corporate Affairs – GE South Asia, General Electric (GE India Industrial Pvt. Ltd. – India HQ)
- Mr. Nitin Appasaheb Doddihal, Vice President – Business Development Asia, ATC Tower Company of India Pvt. Ltd.
- Mr. Vibhav Garg, Head – Health Economics & Govt. Affairs, Boston Scientific India Pvt. Ltd.
- Mr. Sanjeev Gupta, Managing Director – Corporate Affairs, Accenture Services Pvt. Ltd.
- Mr. Abhishek Dinesh Jugran, Country Manager – Sri Lanka & Maldives, Coca-Cola Far East Limited
- Mr. Murale Nadarajah, Business Development Manager – Sri Lanka, Rockwell Automation India Pvt. Ltd.
- Mr. Rakesh Kumar Sahni, Director, International Business, Government & Tender Business, Johnson & Johnson Limited
- Mr. Jagmohan Singh, Regional Director India, Sri Lanka & Maldives, Lockheed Martin India Pvt. Ltd.
- Mr. Meenu Singhal, General Manager – Market Access – India, Rockwell Automation India Pvt. Ltd.
- Mr. Nakul Verma, Director Strategic Accounts & Partnership, South Asia, Varian Medical Systems
- Mr. Vishnu Shankar Vyas, Head- Regulatory Affairs & Quality Assurance, Edwards Lifesciences (India) Pvt. Ltd.
- Ms Madhvi Kataria, Deputy Executive Director, American Chamber of Commerce in India
Following meetings were organized:
Thursday, 6th March 2014
- Breakfast Meeting with Amcham Sri Lanka Executive Committee members and U.S. Embassy officials
On this occasion, Mr. Suren Rajanathan, President, Amcham Sri Lanka, welcomed the delegates. Mr. Vishal K. Wanchoo thanked Amcham Sri Lanka for organizing the program. This was followed by a presentation on ‘Overview of the Business Climate in Sri Lanka’ by Mr. Shiluka Goonewardene, Principal, Transactions and Restructuring, KPMG Sri Lanka. In his presentation, Mr. Goonewardene made the following points:
- Sri Lanka achieved a growth of 6-8 per cent in the last few years. In 2013, the growth was expected to be around 7.2. Going forward, the economy was expected to achieve a growth of 7-8 per cent.
- Inflation, which was in two digits for many years, had now come down to a single digit.
- Per capita income in 2013 was U.S. $ 3282 and was expected to touch U.S. $ 4000 in 2015.
- Sri Lankan economy received FDI of U.S. $ 516 million in 2010, U.S. $ 1066 in 2011 and U.S. $ 1338 in 2013. U.S. investment was not very significant.
- The Sri Lankan economy was focusing on developing five hubs.
- There was no restriction on FDI in the healthcare sector. In the energy sector, the focus was on non-renewable energy.
- Briefing Meeting by U.S. Ambassador and Embassy officials
U.S. Ambassador, H.E. Ms Michele J. Sison briefed Amcham India members on the Sri Lankan economy and the potential for Sri Lanka-U.S. business. This was attended by the Deputy Chief of Mission, Mr. William Weinstein, Ms Allison Areias-Vogel, Counselor, Economic & Commercial Affairs, Mr. Christopher Corkey, Economic Officer, Defense Attache, and Section Chiefs from the Economic, Political, Public Affairs, Consular and Management sections.In her briefing, Ambassador Sison said that the American companies in Sri Lanka followed due diligence and complied with labour laws. U.S. remained the largest single export destination for Sri Lankan exports. There was need to expand infrastructure and source higher value added and quality products.Ambassador Sison expressed concern at the lack of action on the human rights front, particularly after the end of the conflict. Ambassador Sison said that U.S. ties with Sri Lanka were robust; business-to-business ties were strong. Some of the potential areas for U.S. investment was energy. It was noted that U.S. companies did not make much headway in infrastructure contracts or procurement of equipment. Most of the contracts, of late, had been awarded to the Chinese. While there were challenges in the defense sector, there were opportunities too. There was need for due diligence when looking for partners for joint partners. A major concern remained as to how the human rights issues would be resolved.
- Meeting with Mr. Ajith Nivaard Cabraal, Governor, Central Bank of Sri Lanka
Mr. Cabraal made a presentation covering the economic and growth parameters of the Sri Lankan economy. Copy of presentation attached. He invited U.S. companies to invest in Sri Lanka.
- Meeting with Mr. Maithripala Sirisena, Minister of Health
Members had a meeting with Mr. Maithripala Sirisena, Minister of Health. He was accompanied by Mr. Nihal Jayathilake, Secretary, Health and other officials looking after regulatory issues.Members of Amcham delegation wanted information on the focused areas in the healthcare; PPP projects; what kind of disease the Government was going to focus on? Secretary (Health) responded that they were focusing on pre-healthcare services; a large number of pharma and medical devices were being procured and suggested continuous dialogue between the U.S. healthcare companies and Sri Lankan Government and private sector companies. Although local manufacturing was encouraged, large amount of imports of medical instruments would continue.
- Meeting with Ms Pavithra Wanniarachchi, Minister of Power & Energy
The Minister and her officials informed the delegates that the aim of the Sri Lankan Government was to make the energy sector efficient and to export power to India once they became self-sufficient. The Government was planning to increase the power generation capacity to meet requirements of high growth. Recently, Chinese technology and plants were being used for generation of power. After 2020, the focus would shift to natural gas. The U.S. companies were invited to investment in wind energy.
- Meeting with Secretary Telecom
Some members representing the telecom sector called on Mr. S. M. Gotabaya Jayarathne, Secretary, Ministry of Telecom and Information Technology, and Mr. VPK Anusha Palpita (DG). This provided visibility for next steps in Sri Lanka.
- Meeting with Dr. R.H.S. Samaratunga, Secretary, Ministry of Petroleum Industries
Some members of the delegation called on Dr. R.H.S. Samaratunga, Secretary, Ministry of Petroleum Industries, to discuss business opportunities in the petroleum sector.
- Meeting with USAID
Mr. Meenu Singhal and Mr. Murale Nadarajah from Rockwell Automation India Pvt. Ltd. met with Mr. Tom Bayer, Executive Officer and Economic Growth Officer, USAID to find out the projects USAID was funding in Sri Lanka and where Rockwell could engage with USAID.
In the evening of 6th March 2014, a reception was organized by the Joint Apparel Associations Forum and All World Network to launch Sri Lanka 25 – All World Network by His Excellency Mr. Mahinda Rajapaksa, President of Sri Lasnka. Members of Amcham India were invited to participate in the reception. Dr. P.B. Jayasundera, Secretary, Ministry of Finance, made a presentation on ‘Sri Lanka the Global Supply Chain – Role of Entrepreneurs’. Mr. Ashroff Omar, CEO, Brandix Lanka & Founder Chairman, Joint Apparel Association Forum, delivered the opening remarks, and U.S. Ambassador, H.E. Ms Michele J. Sison, made observations. Ms Anne Habiby, Co-founder of All World Network & Former Fellow Harvard Kennedy School, also made a presentation on ‘Sri Lanka 25 – Putting Growth on the World Map’.
Friday, 7th March 2014
- Breakfast Meeting with sector specific business heads and Embassy officials
Amcham Sri Lanka organized a breakfast meeting with sector specific business heads and Embassy officials. Business heads represented ICT, logistics, telecommunications, healthcare and defense sectors. This was a good networking opportunity for members of Amcham India delegation to find out first-hand business opportunities in specific sectors and to obtain specific sectoral policies of the Sri Lankan Government.
- Meeting with Milinda Moragoda, Senior Adviser to President, and Dr. Indrajith Coomaraswamy, Deputy Chairman, Pathfinder Foundation
Mr. Moragoda said that agriculture, garments and tourism sectors had shown satisfactory growth during the last year. He said that the U.S. companies should look at investing in Sri Lanka’s infrastructure sector. Technically trained staff and competitiveness also made Sri Lanka an attractive place for the IT sector. While Sri Lanka had sufficient power, the cost of generating power was high. U.S. companies could bring down the cost of production through investment and technology.Dr. Coomaraswamy said that starting from the late 1950s and for the next 25 years, exports from Sri Lanka declined. In 1982, there was a dramatic decline in trade. The population also declined as the conflict intensified. In the last five years, there was no conflict and, therefore, the economy was showing positive growth in many sectors.Political relations with China were excellent and Sri Lanka had close proximity to India. The economy was not facing any major constraints. Fiscal consolidation, however, was a matter of concern. This was not easy but was a priority and could be brought about by bringing down interest rates.The Sri Lankan had made three phases of structural reforms. A package of reforms along with fiscal consolidation will give the economy the push needed for growth. Sri Lanka had a FTA with India. There was possibility of deepening and widening this. The Government was negotiating was China for a China-Sri Lanka Free Trade Agreement.
- Meeting with Dr. B.B. Jayasundera, Secretary, Ministry of Finance
Members of the delegation called on Dr. B.B. Jayasundera, Secretary, Ministry of Finance, to understand the economic and political scenario in Sri Lanka and opportunities for doing business with the U.S.Dr. Jayasundera said that investment climate was now much better. He said that garments was a major export from Sri Lanka, particularly to the U.S. Sri Lanka was producing quality garments with due importance to ethics. Sri Lanka was looking for partners who could enable this sector to graduate to high value and branded products. He referred to the economic figures and said that there was 12-14 per cent unemployment in the age group between 18 and 25 years. The leadership desired higher skill development.Some of the challenges faced by the Sri Lankan economy included fiscal consolidation and disclosure of information. Sri Lanka wanted to move towards solar energy.
- Round Table Luncheon Discussion with Business Leaders
Amcham Sri Lanka organized a luncheon meeting with business leaders of Sri Lanka at Hotel Hilton, Colombo. At this meeting, the following points were made:
- The foreign banks in Sri Lanka said that this was an easy market to operate for financial services.
- The capital market was evolving.
- Ease of doing business in Sri Lanka was better than in India.
- Foreign banks were bullish about Sri Lanka.
- Only worrisome point was Government debt.
- Their clients looked for investment in energy.
- Manufacturing was a big opportunity.
- The judicial system was fairly good; better than in India.
- The greatest challenge was reinvesting in technology.
- Representatives of U.S. Embassy said that there were regulatory issues.
- There was need to have long-term perspective.
- The Sri Lankan Government had just passed a Bill stating that foreigners cannot own land in Sri Lanka.
- Corruption halted business.
- Rigid labour market; hire and fire was difficult.
- The Sri Lankan Government was embarking on a program of import substitution.
- Energy cost was too high. This was not likely to be resolved soon.
- Sri Lanka had a large Army. Their presence was felt and the numbers were not likely to go down. Military was entering tourism, etc. and they were getting land free.
- Mr. Vishal Wanchoo said that infrastructure in healthcare was definitely lacking. Government can go only to an extent. He wanted to know how U.S. companies could help by facilitating more investment in the healthcare sector in the private sector.
- In response, Sri Lankan representatives said that there was need for private medical colleges but there was resistance from States. There was shortage of personnel with specialities. In Government hospitals, there were long queues for curing disease and surgeries.
- Meeting with Dr. Hussain Niyaaz, Deputy High Commissioner, Maldivian High Commission, Colombo
Dr. Hussain Niyaaz said that Maldives was open for trade and investment. Maldives consisted of 1192 islands, out of which 194 were inhabited. Population was 350759. The Government had an economic vision to establish Free Trade Zones and follow a liberal trade regime. The end objective was to deliver high standard of living for the people. Exports consisted only of fish products. Maldives had bilateral trade relations with India and China. Total number of tourists in 2013 was 1 million. The target was to achieve 5 million by 2018. One bottleneck was lack of international airport. The DCM invited U.S. investment to build up the Maldivian economy.
- Meeting with Hon. Faiszer Musthapha, Deputy Minister of Investment Promotion and Dr. Lakshman Jayaweera, Chairman, Board of Investment
The Board of Investment made a presentation on the investment opportunities in Sri Lanka and invited U.S. companies to consider the various incentives provided to foreign investors.
- Meeting with Dr. Lalith Chandradasa, Adviser to President
Members of the delegation representing healthcare and medical devices sector called on Dr. Lalith Chandradasa, Adviser to President, to discuss the state of the healthcare sector in Sri Lanka.Dr. Chandradasa made the following points:
- The Government had floated a paper on diagnostic imagery for public private partnership.
- Two systems operated in Sri Lanka. One was the Government system where patients did not have to pay at all. The second was the private hospitals where patients had to pay for all treatments. Rs.75 was deducted from every person’s salary for medical insurance. As far as medical tourism was concerned, this would have scope in the private sector.
- Colombo had enough private hospitals. They were not looking for new hospitals for the time being.
- Mr. Vishal Wanchoo wanted to know how U.S. companies could facilitate investment and financing of equipment in the public sector.
- Meeting with Mr. Basil Rajapakse, Minister of Economic Development
Members of the Amcham India delegation along with the Deputy Chief of U.S. Mission in Sri Lanka and other U.S. Embassy officials met with Mr. Basil Rajapakse, Minister of Economic Development.The DCM, in his opening remarks, said that this visit to Sri Lanka was a result of the meeting some U.S. companies had with Hon’ble President Mahinda Rajapaksa in U.S. some time back.Mr. Vishal Wanchoo said that the delegation members had diversity of interests covering healthcare, energy, infrastructure, IT and telecom, industrial automation, consultancy, etc. During the 2-day visit, members of the delegation got a good understanding of the state of the economy and appreciated the positive fundamentals of the Sri Lankan economy. He said that the members of the delegation had a clear interest in doing business with Sri Lanka. Many U.S. companies were already present in Sri Lanka. Their representatives were visiting to see how these interests could grow.Minister Rajapakse expressed happiness that Amcham India delegation looked at Sri Lanka in a positive manner. He had invited Secretary, Ministry of Industry and Commerce; Secretary, Economic Development; and Chairman of Board of Investment to join the meeting. He made the following points:
- Sri Lankan economy was open and transparent.
- The economy wanted to get foreign investment from the rest of the world, particularly from U.S.
- So far, most of the investors were from ASEAN countries including Singapore and India. He hoped U.S. companies would also invest.
- He assured members that once they come to Sri Lanka, they would make enough profits to please their shareholders.
- In the last four years, there has not been a single dispute of labour in the private sector because of a tripartite agreement with them.
- Government land in many countries is not sold but leased. Example, in Maldives.
- He was aware that foreigners were disturbed that they could not buy land in Sri Lanka. He said that Government did not allow foreigners to buy land for holiday homes or beach homes but land would not be a problem for genuine investors.
Mr. Abhishek Dinesh Jugran, Country Manager – Sri Lanka & Maldives, Coca-Cola Far East Limited, said that if the Government enhanced local consumption, particularly in interior markets, the demand for Coke products would also increase.
Mr. Sanjeev Gupta, Managing Director – Corporate Affairs, Accenture Services Pvt. Ltd., said that after Accenture set up an office in Sri Lanka, their first global client was visiting Sri Lanka soon. Through this, his company was promoting Sri Lanka. He said that he would be happy to work with the Economic Development Ministry to create a brand for Sri Lanka and position it well.
Mr. Rakesh Chitkara, Vice President, Corporate Affairs – GE South Asia, General Electric (GE India Industrial Pvt. Ltd. – India HQ), said that GE’s largest research centre was in Bangalore. He invited a delegation from Sri Lanka to see what they were developing. The R&D centre has enabled them to develop imagery at cheaper rates. Mr. Chitkara requested the Minister to send local experts to Bangalore to discuss what were the requirements of the Sri Lankan economy? The Minister agreed to do so.
Mr. Rakesh Kumar Sahni, Director, International Business, Government & Tender Business, Johnson & Johnson Limited, said they would like to work with surgeons to import new J&J products. So far, their experience of doing business with Sri Lankan doctors was that the surgeons were good. J&J could provide training to doctors.
The Minister said that there were three ways to handle this matter. (1) through direct investment, (2) supply of equipment and (3) buy-back arrangements.
- A dinner was hosted by Accenture and Brandix Lanka on 7th evening for members of Amcham India delegates, Amcham Sri Lanka and U.S. Embassy officials.
AmCham Sri Lanka – India / US Business Delegation to Sri Lanka
The American Chamber of Commerce in Sri Lanka (AmCham) facilitated a visit by a trade delegation led by GE India comprising business leaders representing top US companies with corporate offices in India. Mr. AjithNivaardCabraal, Governor of The Central Bank of Sri Lanka addressed the delegation on the “Investment and Trade Opportunities Arising from the Five Hub Strategy”, at a Luncheon Meeting held at the TajSamudra Hotel on March 6, 2014.