More Lankan companies venture overseas

Ramani Kangaraarachchi

A number of Sri Lankan companies have made outward investments in manufacturing and services sectors and with its current success, the future seems to hold an increasing trend in this direction Chairman Ceylon Chamber of Commerce Mahen Dayananda said.

Speaking at a seminar on “Windows on Nepal” on opportunities for tourism, trade and investment in Nepal held recently, he said companies are now looking at venturing into different sectors within the same countries and more countries within the region.

“Once well established in the region they hope to increase investments into the Middle-East and the West. Dayananda pointed out six reasons as to why Sri Lankan companies have ventured out from the country.

Firstly as a result of regional expansion which is a strategic way forward.

Most of the companies who have ventured out of Sri Lanka have stated that moving to operate in other countries has been part of their strategic business plan of expansion which helps to diversify risks and produce and sell to a wider and larger market.

Operating only in Sri Lanka results in companies not being exposed to cutting edge technology due to lack of technology available and markets are not large enough for the companies to make efficient use of some of the heavy machinery and advanced technology available for production.

By being able to make use of large scale machinery, companies are able to enjoy economies of scale, which otherwise could be enjoy only if they could export the excess production.

Dayananda said that companies are able to learn new technology faster by investing and being present in other countries.

Due to lack of certain raw materials and high cost of production in Sri Lanka, there is a need for a more constant and sufficient supply of the raw materials. Also by venturing into other countries companies are able to obtain raw material, energy, labour and packaging cheaper.

Companies believe that they are able to provide world class standards and they have the capacity, competency and the product, which make them potential leaders in the region in whichever product or service they provide.

With world-class products, the companies believe they should expand their horizons, which is made possible by outward expansion.