Reviving the rural economy

Uplifting village economy with 300 industry project:

Ariya Rubasinghe

It was a long felt need that congestion of industries in the main cities should be trimmed and diversified so that new industries could be established in environmentally friendly areas minimizing the problems of lodging and transport. As a practical solution to this President Mahinda Rajapaksa decided to help villages enjoy the benefits of industrial development.

With this objective in mind, 300 industries project was launched. This project aims to set up industrial units under District Development Secretariat Divisions throughout the country. These projects come under the institutions of the Investment Board and the Industrial Development Ministry.

To facilitate the establishment of industries under this program, steps were taken to launch a speedy program to improve infrastructure, such as roads, electricity supply, water supply and other amenities, so the potential investors get the basic requirements to start their ventures.

300 Industries Project

Under this project, 111 industrial projects have been approved by the Industrial Development Ministry and the rest have been approved by the Investment Board.

Industries approved by the Ministry will include 13 industrial projects in Kandy, 28 projects in the North Western Province, 19 projects in the Southern Province, 12 projects in Sabaragamuwa, eight projects in the North Central Province and other projects in the Eastern and Uva provinces. Projects in the Uva province will manufacture animal feed from waste products of the Pelwatte sugar factory.

A large scale dairy project to produce processed milk, cheese and butter will also set up. These factories have opened up employment avenues for people in the area and strengthened their economy.

An industrial project established in Weliwitiya, Galle manufactures PVC pipes. This is the only factory manufacturing this project outside the Western Province. A factory established in Polonnaruwa manufactures tyres and tubes and this is the only factory in Sri Lanka that manufacture tubes.

Factories have been established in Gampola, Matale and Anuradhapura to manufacture biscuits and quality footwear.

BOI projects under this scheme will be established in Katunayake, Biyagama, Sitawaka, Pallekele, Koggala, Mirigama, Watupitiwala and Polgahawela Economic Development Zones with foreign investment.

Industrial zones

In addition to the 300 Industries Project, the Industrial Development Ministry has established over 20 industrial zones in various parts of the country.

Industries have been started in Puttalam, Trincomalee, Galigamuwa, Embilipitiya, Buttala and Maharagama Zones.

The Trincomalee Industrial Zone is located in a 50 acre land, eight km off Trincomalee Town. Plots of land suitable for various industries have been identified and investors have been invited to set up Industries.

A herbal cosmetic manufacturing factory has been started in this zone and this is a hundred percent local investment. The Buttala Zone has been designed exclusively for wood based industries, such as furniture, artifacts and other related products. The Puttalam Zone will mainly concentrate on fishing and food processing industries. Industrial Zones have also been set up in Minuwangoda, Homagama, Kalutara, Dankotuwa, Wennappuwa, Kurunegala, Dambulla, Polonnaruwa, Matale, Ulapane, Udukawa, Karandeniya, Beliatta, Ampara and Kuruwita.

The Ministry expects to increase the number of Industrial Zones to 30 by end of this year. It is targeted to increase the number of Regional Industrial Zones to 45 by 2016. Zones will also be established in the Eastern and Northern Provinces, in close proximity to express highways.

Construction of warehouses proximity to express highways is also encouraged so that such warehouses would facilitate the transport of manufactured goods to nearby markets and manufacturers obtain raw material from these warehouses at a cheaper cost.

Tax benefits

Industrialists who establish their industrial ventures in the Industrial Zones are provided tax free concessions from five to ten years based on the investment amount and the location.

Industries established in remote areas will get tax concessions upto 10 years. Also machinery and equipment imported for these industries will be tax free. Products manufactured for export market in these zones will also be tax free.

Administrative and banking facilities

The Industrial Development Ministry also provides the prospective investors administrative assistance to establish their industries and commence production activities.

It also assists the investors to secure bank facilities through Bank of Ceylon, People’s Bank and other banks.

The Ministry allocates plots of lands with facilities, on long term lease at a highly concessionary rental to investors.

Measures for industrial uplift

Some of the new measures envisaged to uplift industrial development include:

Co-ordinating the activities of the Urban Development Authority, Tourism Authority, Export Development Board, Environment Authority and the Mahaweli Authority to minimize delays relating to starting of investments.

Establishing an Export Import Bank to provide facilities to local entrepreneurs to capture international markets.

Setting up a centre for technology strategies to harness all streams of knowledge including information technology, nano technology and digital technology. Establishing an “Industry Revival Fund” to resurrect factories and rice mills closed due to the world economic recession, by writing off loans and granting new loans.

A Task Force consisting of intellectuals will be set up to facilitate the industrial sector growth.

Provincial Setting up 25 local food factories based on rice, fruits and vegetables to fulfill 75 percent of the local requirement.

New markets for apparel industry will be promoted to double the apparel exports by 2016. Two modern trade centres will be established in Colombo and Katunayake to market apparel products for high end tourists.

Nearly 25,000 acres unused land will be provided for sugar cane cultivation to commence two new sugar factories and thereby increase local production to meet 75 percent of the country’s requirement.

Several chemical factories will be setup in various areas including in Paranthan.

Loans under subsidized interest rates will be provided to small and medium scale entrepreneurs to Rs. 10 million.

Assistance will be given to develop the salt industry and related chemical industries. One hundred trade centres will be constructed on provincial basis to market goods manufactured by local industrialists. Steps will be taken to upgrade small scale entrepreneurs to medium scale and upgrade medium scale entrepreneurs to large scale level. Trade centres will be constructed on provincial basis to market locally manufactured goods.

Handicraft villages will be established and measures will be taken to adopt a method to exchange skills among handicraftsmen.

The writer is Director General, Media Centre for National Development