Sri Lanka has embarked on a focused path towards ensuring macro-economic and financial system stability, having faced strong headwinds from the COVID-19 pandemic. The pandemic resulted in a substantial loss of foreign exchange revenues to the country, but unprecedented support provided by the Government and the Central Bank of Sri Lanka (CBSL), from fiscal, monetary and public health aspects, has helped a strong rebound of the economy as well as a considerable recovery in some foreign exchange earning sectors. The tourism sector is also expected to display a notable recovery in the period ahead, and concerted efforts are taken to improve worker remittance inflows through formal channels. Recent tensions in the forex market have also highlighted the need for Sri Lanka to increase its reliance on foreign exchange earnings over time to strengthen the economy, rather than increasing its foreign borrowings which exposes the economy to various types of shocks.
In this context, in February 2021, the CBSL issued Rules under the provisions of the Monetary Law Act to reinforce the prevailing repatriation requirement on proceeds of merchandise exports and ensure the conversion of a given share of such proceeds within a specific period of time. These Rules that had been based on similar rules of neighbouring countries, had been fine-tuned from time to time upon requests made by the business community, while those have also helped to ease foreign exchange liquidity issues faced by the domestic market to some extent, with a gradual improvement in repatriation and conversion of export proceeds. In addition, with mandatory sales of export proceeds converted under the aforesaid Rules by licensed banks, the CBSL has been able to purchase a reasonable quantum of forex from the market thus far during the year, which the CBSL 2 has utilised to part-finance the import of essential commodities to the country during the past few weeks.
Under the new Rules issued on 28October 2021, the minimum mandatory conversion rate of 25 percent has been relaxed, and instead, exporters have provided with the opportunity to utilise export proceeds for:
a) outward remittances in respect of current transactions;
b) withdrawal in foreign currency notes, as permitted;
c) debt servicing expenses and repayment of foreign currency loans;
d) purchases of goods and obtaining services including one-month commitments; and
e) payments in respect of making investments in Sri Lanka Development Bonds (SLDBs) in foreign currency up to ten per cent of the export proceeds, so received.
The residual after the utilisation of export proceeds as above will have to be converted into Sri Lanka Rupees. This method, followed by several other countries, ensures that exports with a large import content are not penalised, while enabling exports with a higher domestic value addition to convert a greater percentage of proceeds, after meeting foreign currency financial obligations of such enterprises.
In addition, considering the importance of the growing services export sector and the concessions provided to such sectors over time to expand their activities by the Government, the Rules have been extended to services exports as well. This coverage has been defined in the Rules as payments received in foreign exchange by a person resident in Sri Lanka for services (including professional, vocational, occupational, or business services) provided to a person resident outside Sri Lanka. Accordingly, remittances by Sri Lankan expatriates, which are not considered as services exports, will not be subjected to these Rules.
The implementation of the new Rules, which treat merchandise exports and services exports equally, is expected to provide greater foreign currency liquidity to the domestic market, ensuring the availability of foreign exchange for essential payments at a reasonable exchange rate by Sri Lankans, including the purchase of imported goods, overseas 3 education, foreign travel and health expenses, etc. In addition, the Rules will enable the identification of the true “value addition” of each export sector of the economy, through the different ratios of conversion as reported by banks.
Exporters enjoy various tax concessions and other advantages provided by the Government in recognition of the net foreign exchange inflow to the country through their operations, and in consideration of the benefits accruing to the country when such proceeds are converted into Sri Lanka Rupees. Realisation of these anticipated outcomes will therefore enable the Government to continue the provision of concessions to such sectors. Full repatriation of foreign exchange earnings and improved conversion will also help ensure the stability of the exchange rate and support the stability of the macro-economy and the financial system.
Creating innovative spaces and world class construction projects
The Access Group consists of some of the country’s pioneering and innovative companies that have contributed to Sri Lanka’s corporate landscape.
Access Projects is among them – they commenced their own unique journey into creating iconic buildings with their flagship Access Towers 25 years ago. At the time, it was a unique building with its own footprint.
Heading the Access Projects is Managing Director Dilshan Ferdinando who has been associated with creating architecturally exceptional innovative spaces that have gone on to be some of the finest buildings in Sri Lanka.
The company made their mark in the field of construction in the leisure industry – from the interior fit out of the Cinnamon Lakeside Hotel, to the lobby refurbishment and improvements of Chaya Blue in Trincomalee and Chaya Tranz in Hikkaduwa.
Another unique project was The Water’s Edge Golf Club, Club House and the banquet hall, undertaken personally by Dilshan himself to transform a marshy land into Colombo’s second Golf Course. This was a sustainable venture that was spread over 160 acres with an engineered set of water ways, lakes and canals. It involved removing perimeter urban waste and dredging 50 acres and using that material to create the golf playing fields. It still stands today with every tree retained and functional as a banquet facility.
” This was at the time when the war had ended and the hospitality industry was taking off. ” recalls Dilshan, ” We went on to do several banquet halls for city hotels as well as the renovations of the villas of Club Dolphin at Waikkal, yet another iconic hotel.”
The interiors of Waters Edge Golf & Country Club including the banquet hall was designed and built by Access Projects initially.
Yet another unique venture undertaken by Access Projects was the construction of Cape Weligama, a 50 key ultra-luxury resort for The Dilmah Group. “The project involved creating one of a kind, iconic villas with 13 swimming pools – the moon shaped pool was the largest infinity pool in Sri Lanka at the time, in 2014. The projects sought to use timber and locally sourced material for sustainability. It came with specific attention to detail, creating spaces that were all its own,” he adds.
When the iconic Galle Face Hotel sought restoration and renovation to meet the design elements of the Fifties, they chose Access Projects to handle the construction. Dilshan recalls carrying out extensive research with old photographs, paying attention to details and highlights that brought out the old world look and feel. A new ballroom was added to blend in with the existing architectural design of the old one, while all systems were renovated and updated.
Access Projects has also undertaken several iconic projects such as the Anantara Resort, a 250 key luxury hotel for the Hemas Group along with staff quarters and the banquet hall.
Access Projects was tasked with the construction of a modern 18 storeyed building for the Academy of Design – it came with specific design requirements – ‘ we made sure every one of those requirements were met – within budget and the time frame given.” he says.
Accredited with ISO 9001 – 2008 and ISO 14001 – 2004, and accredited to CIDA (Construction Industry Development Authority), Access Projects specializes in midscale specialist construction projects that call for attention to detail and meeting exacting architect and customer needs.
CEAT radials designated Original Equipment for locally–assembled Mahindra Bolero City Pik-ups
CEAT Kelani Holdings has reached another milestone in radial tyre manufacture in Sri Lanka with the Company’s appointment as an Original Equipment Manufacturer (OEM) for Bolero City Pik-up vehicles assembled in Sri Lanka by Mahindra & Mahindra (M&M) India in collaboration with Ideal Motors.
All Mahindra Bolero City Pik-ups rolling off the assembly line at the Mahindra Ideal Lanka Automotive Assembly Plant at Welipenna, Matugama are fitted with CEAT Milaze HD radial tyres in the size of 215/75 R15, manufactured at the CEAT Kelani plant in Kelaniya, under an OEM agreement between the two companies.
CEAT has already supplied 180 of these high performance radial tyres for 36 vehicles that will be assembled in November and December this year and has committed to supply up to 720 tyres per month from January 2022 onwards for a targeted maximum of 144 vehicles to be produced monthly by the Mahindra Ideal Lanka joint venture, the Company said.
Commenting on the agreement, CEAT Kelani Managing Director Ravi Dadlani said: “We are delighted to contribute to the local value addition component of the Mahindra and Ideal Motors venture, while doing what we do best – producing high quality tyres designed and engineered for local conditions and supporting the government’s efforts to conserve foreign exchange. Over the past two decades, CEAT has built the equity of the ‘Made in Sri Lanka’ proposition in the tyre industry, and we are proud and appreciative of the opportunity, as exclusive tyre supplier, to support the aspirations of Mahindra and Ideal Motors to progress to vehicles made in Sri Lanka.”
The Managing Director of Mahindra Ideal Lanka Pvt Ltd. Nalin Welgama noted that “This new initiative is a step in the right direction and supports the government policy framework for Sri Lanka’s migration from a market economy to a production-based economy.”
The CEAT Milaze tyres manufactured by CEAT Kelani for the Mahindra Bolero City Pik-up feature profiled shoulder lateral grooves that provide better heat dissipation and wide-angle circumferential grooves that resist cuts and chips. Angular transversal notches and sipes provide enhanced grip and uniform wear, while the angular notched 4-rib high land area design provides longer tyre life and durability.
No stranger to the OEM segment, CEAT Kelani Holdings has been the exclusive original equipment tyre supplier for Mahindra KUV100 compact SUVs assembled in Sri Lanka since 2019. All locally-assembled Mahindra KUV100 vehicles are fitted with CEAT FUELSMARRT 185/60 R 15 tyres.
CEAT Kelani Holdings is considered one of the most successful India – Sri Lanka joint ventures. The joint venture’s cumulative investment in Sri Lanka to date totals Rs 8 billion, inclusive of Rs 3 billion invested since January 2018 for expansion of volumes, technology upgrades and new product development. The company’s manufacturing operations in Sri Lanka encompass pneumatic tyres in the radial (passenger cars, vans and SUVs), commercial (nylon and radial), motorcycle, three-wheeler and agricultural vehicle segments.
The CEAT brand accounts for market shares in Sri Lanka of 48 per cent in the Radial segment, 80 per cent in the Truck category, 84 per cent Light Truck tyre category, 51 per cent in the Three-Wheeler tyre segment, 36 per cent in the Motorcycle tyre segment and 72 per cent in the Agricultural vehicle tyre category. CEAT Kelani exports about 20 per cent of its production to 16 countries in South Asia, the Middle East, Africa and the Far East.
ComBank wins Best Corporate Citizen Sustainability Award 2021
The Commercial Bank of Ceylon PLC was declared Sri Lanka’s ‘Best Corporate Citizen’ in 2021 by the Ceylon Chamber of Commerce (CCC) on Tuesday night, achieving the pinnacle of recognition for sustainability and good corporate citizenship in the country’s corporate sector.
The coveted ‘Best Corporate Citizen Sustainability Award 2021’ was presented to Sri Lanka’s benchmark bank at an awards gala attended by the cream of corporate Sri Lanka, in recognition of the Bank’s status as the sustainable champion of the local corporate world.
Commercial Bank also won the award for the Finance sector at the awards for ‘Sector Based Sustainability Champions,’ the ‘Governance’ certificate in the category awards for ‘Consistent Commitment and Continuous Improvement’ and was second runner-up for the newly-introduced award for ‘Demonstrated Resilient Practices for COVID-19 Context,’ in addition to receiving an award for being among the Top 10 Best Corporate Citizens in Sri Lanka.
“Sustainability is the cornerstone of our corporate ethos and influences everything we do,” Commercial Bank Managing Director and Group CEO S. Renganathan commented. “This is demonstrated by the fact that we are Sri Lanka’s first fully carbon neutral bank. Commercial Bank is therefore elated to win the Best Corporate Citizen Sustainability Award for 2021. This will be a stimulus for an even deeper commitment to best practices in sustainability at every employee level.”
The Finance sector award recognises Commercial Bank’s position as the most progressive banking institution in the country and its commitment to preserving the environment through responsible lending protocols. The Bank’s multifaceted Green initiatives include lending to support Sustainable and Green operations, migrating customers to paperless banking, improving efficiency in the use of energy, water and other resources in its own operations and supporting community initiatives that help conserve habitats and the environment.
The Bank pioneered a mandatory social and environmental screening process for its project lending activities and was the first bank in Sri Lanka to venture into Green Financing. It also revolutionised digital banking by introducing features in its ‘Flash’ mobile application to measure and offset customer impact on the environment. The Bank has also achieved the momentous feat of becoming the largest lender to the SME sector and is a leader in digital innovation in the country’s banking sector.
Commercial Bank finances projects that focus on renewable energy, energy and resource efficiency, waste management, emission reductions, smart agriculture and green buildings. The Bank’s Green Financing is geared towards the fight against climate change, meeting the United Nations Sustainable Development Goals 7 and 12: Affordable and Clean Energy, and Responsible Consumption and Production.
Additionally, the Bank has numerous commitments including a mangrove restoration project in Koggala, a marine turtle conservation initiative to protect the biodiversity of the ocean, and support to the ‘Thuru Mithuru’ initiative of the Sri Lanka Army to promote self-sufficiency in essential food.
The Best Corporate Citizen Sustainability Awards programme has been in operation for 18 consecutive years and received 63 applications in 2021, the highest number of applications received in the history of the programme.
Established in 1839, the Ceylon Chamber of Commerce is the oldest and one of the leading business chambers in Sri Lanka. A confederation of Trade Associations, Bilateral Business Councils, and Regional and Sectoral Chambers of Commerce and Industry, it is considered the leading voice of the private sector in Sri Lanka.
The first Sri Lankan bank to be listed among the Top 1000 Banks of the World and the only Sri Lankan bank to be so listed for 11 years consecutively, Commercial Bank operates a network of 268 branches and 931 automated machines in Sri Lanka. The Bank’s overseas operations encompass Bangladesh, where the Bank operates 19 outlets; Myanmar, where it has a Microfinance company in Nay Pyi Taw; and the Maldives, where the Bank has a fully-fledged Tier I Bank with a majority stake.
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