Rhino, the nation’s leading provider of roofing solutions, marked the key milestone of exporting its first 1,000 containers of roofing sheets to South Asian locations, in Colombo on December 14, 2021. Minister of Finance, Basil Rajapaksa was the Chief Guest at the event hosted by E.J. Gnanam, Managing Director of Rhino Roofing Products Limited with the participation of distinguished guests, and the Senior Management of the company.
Rhino Roofing Products Limited was named ‘Best Exporter’, in the Value-Added Minerals Sector at the recently held Presidential Export Awards 2020/21 hosted by the Sri Lanka Export Development Board (EDB), cementing its standing in the country as a key contributor to the economy.
“Continuous self-improvement and investments in world-class technologies that add value to consumers have made it possible for Rhino to reach this milestone and to contribute to the national economy during such a challenging period. As a 100% Sri Lankan company, for decades our focus has been on providing the best quality products to the market. Now we have strategically repositioned ourselves to compete against global players, by creating demand for quality roofing products which we supply”, Rhino Roofing Products Limited, Managing Director, E.J. Gnanam stated at the ceremony.
Chairman & Chief Executive at EDB, Suresh De Mel; Director of The Board of Investment, Pasan Wanigasekara; High Commissioner of Pakistan (Acting) for Sri Lanka, Tanvir Ahmad; Additional Director General of Department of Government Information, Milinda Rajapaksha; Director of Commerce and Head of Trade Promotion at the Department of Commerce, G L Gnanadeva and President of the Sri Lanka Pakistan Business Council, Somasundaram Deivanayagam, were among the dignitaries that graced the occasion with their presence.
Suresh De Mel of the EDB presented a token of appreciation to Jude Fernando, Director, Rhino Roofing Products Limited at the ceremony; in appreciation of the company’s achievements in the category of non-traditional exports under his leadership.
“I am grateful to the support extended to us by the Minister and all state officials, as Rhino continues on its journey to becoming a truly global company, committed to quality and to sustainable business practices. I am also proud of the Rhino team who, despite the COVID-19 pandemic, enabled the company to serve the Sri Lankan economy by boosting local manufacturing and reaching the export market. We look forward to exploring new growth pockets in the global market for Sri Lankan products and becoming a significant contributor to the export income of the country.” Gnanam added.
Rhino’s fortified production facility in Sri Lanka is well-equipped with world-class manufacturing plants. The company uses state-of-the-art technology and premium quality raw materials in world class-production processes. The company places a high priority on the environment, eliminating pollution by completely recycling waste and conserving natural resources by reducing energy consumption. As a socially responsible organization, Rhino has placed paramount importance on embedding sustainable practices and community welfare into its business approach. Through the establishment of four pillars of sustainability, ‘People, Product, Community and Planet’, Rhino has reshaped its business strategy to create a platform for sustainable development in its journey to neutralize its carbon footprint by 2030.
Conclusion of phase 1 of private placement of Ordinary Shares of JKH to ADB
Following is the text of a letter addressed by JKH Deputy Chairman/Group Finance Director Gihan Cooray to the CSE’s Chief Regulatory Officer Renuke Wijayawardhana.
Further to the announcements to the Colombo Stock Exchange on 22 November 2021 and 22 December 2021 regarding the Private Placement of up to a maximum cumulative amount of the Sri Lankan Rupee (“LKR”) equivalent of USD 80 million to Asian Development Bank (“ADB”), through the issuance of up to a maximum of 122,500,000 new ordinary shares of the Company in two phases (Phase 1 & Phase 2), we wish to inform that Phase 1 of the Private Placement of ordinary shares of the Company to ADB was concluded on 19 January 2022.
Accordingly, 65,042,006 ordinary shares (“Initial Placement Shares”) of the Company were allotted to ADB at a price of LKR 154.50 per share on 19 January 2022 for a consideration of the LKR equivalent of USD 50 million. The Initial Placement Shares results in a post-issue dilution of 4.70 per cent in Phase 1 of the transaction.
Additionally, in terms of Phase 2, the Company has issued 39,025,204 non-tradable/non-transferable options (“Options”), which will entitle ADB to subscribe for additional new ordinary shares of the Company (“Option Shares”), for an investment amount of up to a maximum of the LKR equivalent of USD 30 million.
Therefore, the maximum number of ordinary shares that would potentially be issued under the entire transaction, assuming all Option Shares are subscribed for, will be 104,067,210, thereby capping the post-issue dilution on the conclusion of both phases to a maximum of 7.31 per cent.
The salient details of the Options are as morefully detailed in the Shareholder Circular dated 29 November 2021. Based on the subscription date of the Initial Placement Shares, the Option Exercise Period will be from 19 October 2022 to 18 January 2023.
Bangladesh – Sri Lanka Preferential Trade Agreement: Gains and policy challenges
By Asanka Wijesinghe and Chathurrdhika Yogarajah
0espite enhanced trade partnerships in South Asia, intra-regional trade is far from reaching its theoretical potential. Similar production patterns and competitive sectors can be the causes. However, bilateral discussions to further lower trade costs continue. The ongoing Bangladesh-Sri Lanka discussions on a preferential trade agreement (PTA) will benefit from knowing the potential gains from reducing bilateral trade costs. In addition, knowledge of products with higher potential for export gains will help optimise the economic benefits from a trade deal.
Bangladesh – Sri Lanka Trade:
The Current Status
In 2018, when discussions on a PTA began to firm up, Sri Lanka’s exports to Bangladesh were USD 133 million, while imports from Bangladesh were USD 37 million. Despite the low trade volume, Sri Lanka’s exports to Bangladesh have grown (Figure 1). In addition, Sri Lanka records a bilateral trade surplus with Bangladesh, which is encouraging given the country’s trade deficit concerns. However, weak growth of exports from Bangladesh to Sri Lanka can be seen from 2001 to 2016 (Figure 1).
The current trade deals between the two countries are still partially restrictive. Both countries keep a sensitive list of products that are not eligible for tariff cuts. Sri Lanka maintains a list of 925 products sanctioned by SAFTA (South Asian Free Trade Area) while Bangladesh keeps 993 products. Sri Lanka’s sensitive list covers USD 6.2 million or 23.8% of imports from Bangladesh. The sensitive list of Bangladesh covers USD 77.6 million or 62% of imports from Sri Lanka. Thus, the elimination of sensitive lists may benefit Sri Lanka more.
Figure 1: Trade Intensity between Bangladesh and Sri Lanka
Source: Authors’ Illustration using Trademap Data.
Theoretically, bilateral alliances deepen trade by removing weaknesses in existing multilateral trade arrangements. A trade deal between Bangladesh and Sri Lanka can simplify trade regulations further. In addition, Bangladesh needs alternative preferential access as graduation from Least Developed Country (LDC) status will take away preferential access to its key markets. For Sri Lanka, increasing bilateral participation in production value chains, especially in the textiles sector, might be an economic motivation. Financial support extended by Bangladesh to manage Sri Lanka’s foreign currency pressures might be a political motivation for a trade deal.
Eliminating sensitive lists can lead to trade creation, although it may not happen due to political and economic reasons. When it comes to tariff cuts, both countries will act defensively as certain products in the sensitive lists are vital for employment and revenue generation. Thus, the success of a trade deal depends on how many products with high export potential are under its purview. In this direction, a group of products with specific characteristics can be identified as an offensive list. For example, Sri Lanka’s offensive list includes products that Bangladesh imports from anywhere in the world, produced by Sri Lanka with a capacity for expansion. Sri Lanka has a comparative advantage in exporting that good, and Bangladesh already has a tariff on the product.
Export Gains from Tariff Elimination
If tariffs on the sensitive lists are eliminated, there will be modest export gains for Bangladesh and Sri Lanka in absolute terms. Sri Lanka will gain USD 24.7 to 49.7 million of exports to Bangladesh, while Bangladesh will gain USD 2.1 to 4.5 million of exports to Sri Lanka. Potential export gains are given in a range due to assumptions on elasticity values used in the partial equilibrium model. Elimination of sensitive lists will generate a higher tariff revenue loss to Bangladesh, ranging between USD 13.5 million to USD 19.1 million. By contrast, Sri Lanka’s revenue loss will be slight at USD 1.4 million to USD 1.9 million.
Whatever the arrangement, it is crucial to include the products with high export potential in the offensive lists (See Table 1 for the major products). Out of 39 products in Bangladesh’s offensive list, 21 are intermediate goods, while 18 are consumption goods. Similarly, 75 out of 115 products in Sri Lanka’s offensive list are intermediate goods. Tariff cuts on intermediate products may induce fragmented production between two countries, which would harness country-specific comparative advantages. Major intermediate goods in the offensive lists are dyed cotton fabrics, cartons, boxes, and cases, plain woven fabrics of cotton, denim, natural rubber, and smoked sheets of natural rubber (Table 1).
The ex-ante estimates predict modest gains for Sri Lanka and Bangladesh in absolute terms, even after completely removing the sensitive list. But complete removal is politically challenging for both countries. Moreover, Bangladesh as an LDC may expect special and differential (S&D) treatment. Thus, the outcome can be a limited PTA in line with weaknesses in existing trade agreements governing South Asian trade. The impact on trade of regional trade agreements in force is negative primarily due to stringent general regulatory measures, including rules of origin (ROO), sensitive lists, and prolonged phasing-in. Given that the estimated modest economic gains of a Bangladesh-Sri Lanka PTA do not justify a trade deal that requires substantial resources for negotiations,the PTA should have fewer regulatory measures and tariff concessions for the products on the offensive lists to maximise the economic benefits of a PTA between the two countries.
Link to the full Talking Economics blog: https://www.ips.lk/talkingeconomics/2022/01/20/bangladesh-sri-lanka-preferential-trade-agreement-gains-and-policy-challenges/
Asanka Wijesinghe is a Research Economist at IPS with research interests in macroeconomic policy, international trade, labour and health economics. He holds a BSc in Agricultural Technology and Management from the University of Peradeniya, an MS in Agribusiness and Applied Economics from North Dakota State University, and an MS and PhD in Agricultural, Environmental and Development Economics from The Ohio State University. (Talk with Asanka – email@example.com)
Chathurrdhika Yogarajah is a Research Assistant at IPS with research interests in macroeconomics and trade policy. She holds a BSc (Hons) in Agricultural Technology and Management, specialised in Applied Economics and Business Management from the University of Peradeniya with First Class Honours. She is currently reading for her Master’s in Agricultural Economics at the Postgraduate Institute of Agriculture, Peradeniya. (Talk with Chathurrdhika: firstname.lastname@example.org)
Expolanka boosts bourse by adding 21.7 points to ASPI
By Hiran H.Senewiratne
CSE trading started in negative territory yesterday due to heavy profit- takings but after 1 pm the market began to recover, triggered by index heavy counter Expolanka, which gained by adding 21.7 points to the All-Share Price Index. The stock market yesterday produced a creditable recovery to finish on a positive note after early losses amid a relatively low but healthy turnover level. The Expolanka share price appreciated by 2.5 per cent or Rs 9.50. Its shares started trading at Rs 386 and at the end of the day they shot up by Rs 9.50.
Amid those developments both indices moved upwards. The All -Share Price Index went up by 42.8 points and S and P SL20 rose by 7 points. Turnover stood at Rs 4.9 billion with a single crossing. The crossing was reported in Expolanka, which crossed 100,000 shares to the tune of Rs 39.5 million and its shares traded at Rs 395.
In the retail market, top seven companies that mainly contributed to the turnover were, Expolanka Rs 715 million (1.8 million shares traded), Browns Investments Rs 336 million (19.9 million shares traded), ACL Cables Rs 261 million (2.1 million shares traded), LOLC Finance Rs 231 million (8.1 million shares traded), JKH Rs 193 million (1.2 million shares traded), Expack Corrugated Cartons Rs 162 million (seven million shares traded) and Softlogic Capital Rs 161 million (11.3 million shares traded). During the day 154 million share volumes changed hands in 37000 transactions.
Yesterday, the US dollar was quoted at Rs 202.91, which was the controlled price of the Central Bank. The actual price would be more than Rs 250, market sources said.
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