China, Lanka leather venture in the offing

The recent visit of a 50-strong Chinese trade and investment delegation to Sri Lanka opened a new avenue for economic co-operation between the two countries.

During his stay in Sri Lanka, Light Industry Association of China, Vice President Wang Schicheng, who headed the delegation said that Sri Lanka is an excellent location for investment.

Saraa Os Leather Private Limited Chairman and Managing Director Senaka Silva invited the Chinese entrepreneurs to visit the factory at Boralesgamuwa, to help them to evaluate the standards and potential Sri Lanka offers in the production of leather goods.

The BOI of Sri Lanka organized an one-on-one meeting whereby entrepreneurs from Sri Lanka and China were able to hold discussions on areas for future co-operation. The delegation comprised of a large group of manufacturers of leather goods.

"The delegation was very impressed by the quality of the products made at Saraa Os Leather, as well as the advanced technology used in the production, and expressed their interest in entering into a joint venture, to enhance capacity and bring in new technologies of manufacture and use Sri Lanka as a platform for value added exports to EU, USA and to regional markets," Silva said.

In addition to this joint venture, Chinese entrepreneurs have expressed interest in setting up new projects in Sri Lanka. One is an investment by Renqiu City Hayuan Chemical Fiber Co. Ltd to manufacture chemical fiber and membranes that have wide applications such as in draining and filtration. Dingzhou Jinlong Metal Production Co Ltd who manufactures welding electrodes used to fuse pieces of metal together is the second project. Exchange of information and negotiations are in progress. Both projects are indicators of the interest Chinese enterprises have shown in Sri Lanka as a destination for investment.

China's present economic presence in Sri Lanka amounts to 35 companies that operate under the special scheme of incentives the BOI offers investors. There are in addition 46 other Chinese enterprises that operate under the normal laws of the country. The total value of Chinese investment in Sri Lanka is US$ 132 million. There is confidence at the BOI that more investment from China will come to Sri Lanka in spite of the global economic downturn.

Light Industries Association of China comprises of many light industries and is the worlds largest manufacturer of leather goods and accessories.

In the leather goods area they have around one million varieties and 1,300 brands and an annual output of 500 million items.

Saraa began by manufacturing exclusive leather products made out of ostrich hides from which its name is derived. They continue to make products out of exotic leathers such a ostrich but have extended the range of their products include goods made of normal leathers, canvas, raffia, webbing, cotton and synthetic materials.