German companies in Sri Lanka looking at reinvesting in the island
Head of the Delegation of German Industry and Commerce in Sri Lanka (AHK Sri Lanka), Andreas Hergenrother has reportedly stated that over 29 poercent of German companies based in Sri Lanka are planning to reinvest in the island in the post Covid-19 era.
He has said that the other companies and agents of top German brands in Sri Lanka have expressed willingness to stay in Sri Lanka and carry on their businesses mainly due to the professional manner in which the government of Sri Lanka had contained the spread of Covid-19 pandemic in the country.
This is also expected to give a major plus point to attract foreign direct investments (FDIs), relocation of global officers, ‘Make Sri Lanka your home concept’ and also for tourism for Sri Lanka, Sri Lanka’s state owned, Daily News has stated.
“We are also trying to position Sri Lanka as a ‘high potential investment hub’ for German companies mainly due to Lanka’s geographical location and the FTA’s bi lateral agreements country has with India and Pakistan and other countries. What we want to promote is ‘make in Sri Lanka and re-export concept’ not only to the region but beyond. We see new opening emerging in manufacture of personal protective equipment (PPE), chemicals and rubber based products,” Hergenrother has been quoted as saying.
He has however said the government of Sri Lanka would have to re-think of ownership laws for international investors since only 40 percent is given as against 100 percent ownership in countries like Singapore.
He has further noted that German tourists are the biggest growth market for Sri Lanka with typical stay of 16.3 days and averaging around 2.19 million room nights as against Chinese 1.39 room nights.
Sri Lanka’s bilateral trade with Germany has also seen a sharp increase with exports totaling Euro 755 million in 2019 as against Euro 317 million imports.
According to Hergenrother, although there has been an 80 percent drop in apparel exports, there has been an increase in export of personal protective equipment (PPEs).
He has also noted that there is a great demand for Sri Lanka exotic fruits and vegetables and spices and local companies must participate in Trade fairs that will open up soon.
Hergenrother has added that the delegation had conducted a survey among CEO’s of 160 German based companies in Sri Lanka and found that none of the companies based in Sri Lanka retrenched their staff or initiated pay cuts.
OSL take:
Sri Lanka’s geographical positioning in the Indian Ocean, the ease of doing business environment, the many trade agreements as well as trade concessions enjoyed by the country places Sri Lanka in a unique position as a business hub in the South Asian region. Also, the country’s development programme has opened up many business/investment opportunities in all key economic sectors in Sri Lanka. Like the German businesses in Sri Lanka, many other foreign investments have decided to reinvest and expand operations in the island. Therefore, foreign businesses/investors could confidently explore business/investment opportunities in Sri Lanka.
| Article Code : | VBS/AT/20200618/Z_3 |