Sunday, 21st September 2014
By Duruthu Edirimuni Chandrasekera
There is a Japanese proverb that says ‘if something has happened twice, it will happen a third time’. Maybe it should be changed to ‘if something has happened twice, it will happen a few more times’, judging by the amount of Japanese investments surging into Sri Lanka.
The Japanese seem to be interested in Sri Lankan business and may surpass the Chinese, industry analysts say. The efforts by Sri Lankans in trying to attract investments from Japan seem to be more focused now than ever before.
The latest attempt is by the Export Development Board (EDB) which is organising a delegation to Japan early next year. This was revealed at the advisory ICT/BPO Committee of EDB Interest Group of Japanese Market recently.
“This Interest Group is working towards attracting Japanese companies already in India,” Daya Hettiarachchi, Chairman OpenArc told the Business Times. “We want to study and follow how other countries are presented in Japan through chambers, etc and also have a bigger gateway to Sri Lanka in Japan,” he said. Software that is developed in Sri Lanka according to Japanese Standards is a new market for local IT and the demand is for more IT graduates with languages capabilities, Mr. Hettiarachchi said.
They also want Sri Lanka companies listed in the JETRO, or the Japan External Trade Organisation (a government-related organisation that works to promote mutual trade and investment between Japan and the rest of the world) website and update the profiles.
There are more than 80 Japanese companies present in Sri Lanka with an investment of $350 million approximately in porcelain manufacturing, ship building, power generation, cement manufacturing, electronic components and jewellery, EDB sources said.
Lakshman Yapa Abeywardena, Minister of Investment Promotion, was recently quoted as saying that the newly signed agreement with Japan’s Mizuho Bank would enable Sri Lanka to promote Japanese investments to the country.
Japanese grants
Japanese Prime Minister Shinzo Abe, who was in the country recently along with President Mahinda Rajapaksa expressed confidence in promoting Sri Lanka-Japan relations, which have matured and diversified based on the longstanding friendship, into “a new partnership between maritime countries”. Japan is ready to provide patrol boats to help Sri Lanka bolster its maritime guard, according to reports.
The Japanese Government recently granted a loan of Japanese Yen 13.7 billion (around Rs. 17.4 billion) to Sri Lanka towards the digitisation of the terrestrial television broadcasting project ‘Ru-Sankya’ to develop information communication infrastructure. This includes construction of antenna towers, transmitting station buildings, DBNO Administrative Building, Digital TV Centre and electrical equipment work. The two leaders welcomed the outcome of the study conducted by the Japan International Cooperation Agency (JICA) on transport infrastructure for metropolitan areas together with the initiation of suitable mass rapid transit system to mitigate the traffic congestion and eliminate transport blocks.
Hitachi Monorail System is considering setting up a Monorail in Colombo, according to the Hitachi Monorail System representative who accompanied Japanese Prime Minister Shinzo Abe on his Sri Lanka recently.
A Monorail system at a cost of around US$ 1.3 billion is planned and Japan’s JICA is prepared to fund the first phase of this project according to the Ministry of Transportation officials.
Takashi Igarashi, Chairman NWS Holdings, said most Japanese are interested in Sri Lanka’s growth. “Sri Lanka stands at a high rating compared to the other emerging markets and (easy) foreign exchange regulations (ease in repatriating funds) makes it attractive.” He raised an interesting point on both nations being islanders. “This is why we understand the Sri Lankan mindset,” he said.
A sushi bar called the ‘Samurai’ will be opened next to the Jetwing Hotel in Negombo soon and a 35 room hotel worth Rs. 400 million is to be opened by a Japanese investor consortium. More stakes in manufacturing and construction sectors is being looked at, a Japanese investor in Colombo scouting for related businesses said.
Japan’s State Minister of Economy, Trade and Industry Kazuyoshi Akaba who was in the country recently said that among the several million companies operating in Japan, more than 90 per cent are small and medium enterprises (SMEs) that are trying to find new locations for investment for which Sri Lanka could be an option. He said that the new infrastructure such as the Hambantota airport and port, which are strategically located, would also be an added advantage for investors.
Japanese investors purchased 19 per cent shares in OpenArc recently in a private placement for US$ 2.5 billion. “We are discussing with a few Sri Lankan companies in these sectors,” Masami Awano, a Japanese investor who has secured an investment with OpenArc Arc Software Company told the Business Times. He added that these discussions are on either to buy part stakes in existing companies or set up fresh companies.
The latest deal to hit the market was Japanese firm SG Holdings buying Expo Lanka PLC a few months ago. SG Holdings (Pvt) Ltd (or Sagawa), a leading logistics company in Japan bought a 30 per cent stake from principal shareholders of Expo – the Cassim family who collectively disposed this stake worth Rs. 6.27 billion.
From : http://www.sundaytimes.lk/140921/business-times/japans-investment-appetite-for-sri-lanka-escalates-118387.html
