Govt encouraging more rural factories

THREE hundred factories are to be set up in all divisional secretariats under a programme launched by the Ministries of Industrial Development and Investment Promotion.

This is in keeping with the Government policy of establishing more factories in rural areas, Industrial Development Minister Kumara Welgama said.

Speaking as at seminar at the Ratnapura District Secretariat, he said certain factories face a labour shortage as people find it financially difficult to travel long distances to work and this, coupled with the high cost of lodging has prevented people from getting jobs at far-away factories.

"One major reason for this thrust to shift factories to rural areas is to overcome problems of this nature," the Minister said.

Welgama said it would be possible for the Ministry of Industrial Development to provide 3,000 new jobs at the Second Phase of the Nalanda Ellawela Industrial Park at Kuruwita in six months and infrastructure facilities are being created within 60 acres.

He said his ministry along with the Ministry of Investment Promotion has undertaken to facilitate in line with the 'Mahinda Chintana', the establishment of 300 factories spread over all Divisional secretariats.

The seminar was held to enlighten industrialists of various incentives and facilities offered in the Budget of 2006 and to discuss and offer quick solutions to problems.

Welgama said already 2,000 direct jobs have been created at factories within the park and a similar number of indirect employment has also been created within the area.

The Minister also drew attention to two corporations under his ministry. He said Kahatagaha Mines was not operative and if a power generator could be installed at Rs. 3.5 million any investor would be able to commence work.

Machinery are in good condition and 650 tons of mined graphite remain stored. With a world market price of US $ 1,400-1,500 per tone of graphite, it certainly is an industry with good prospects," Welgama said.

Speaking about the Phosphate Company, the Minister said at the moment it cleans up rock phosphate and sells them to other companies that manufacture fertiliser. He said the Government's policy was to help local manufacturers and industrialists.

"But several complaints have been lodged against BOI approved companies who had acted in a manner detrimental to the local industry and also whose actions have led to environmental degradation. As a result, the Government had decided to be more strict when entertaining such applications," the Minister said.

He also highlighted the SMILE loan scheme where loans could be obtained at 4.5 per cent interest. Banks charge a rate of eight to nine per cent for their loans thus keeping a profit margin of about five per cent.

The Minister pointed out that bankers should have a more humane attitude specially because the risk factor today was very low.